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Self-Help Groups (SHG) contributions guide for employers in Singapore

As an employer in Singapore, it is important to be aware of the various obligations and responsibilities that come with managing your employees' wages. One such obligation is the collection of contributions to Self-Help Groups (SHG) on behalf of your employees. 

In this article, we will provide a comprehensive guide to help you navigate the process of deducting SHG contributions from your employees' wages, including an overview of the different SHGs, the contribution rates, and the steps to take to ensure compliance with the relevant regulations!

What are Self-Help Groups in Singapore?

Self-Help Groups (SHGs) in Singapore are community-based organisations that aim to provide assistance and support to individuals and families of different ethnic communities. 

Some of the well-known Self-Help Groups in Singapore include:

The main objective of SHGs is to provide various programmes and services to help individuals and families who may be facing challenges or difficulties, such as financial difficulties, academic underachievement, social or emotional issues, and health concerns. 

Some of the programmes and services provided by SHGs include tuition and mentorship programmes, financial assistance, counselling and guidance services, and community outreach initiatives.

SHGs also play a role in promoting social cohesion and building community resilience by organising cultural and community events, fostering inter-ethnic understanding, and encouraging volunteerism and community involvement.

How are the SHG funds used?

Here are the four SHG funds in Singapore:

These SHG funds are financial assistance programmes that various SHGs have set up to support their respective communities through various initiatives, such as:

  • Education assistance: Offers bursaries, tuition subsidies, and study loans to help students from low-income families pursue their education.
  • Skills upgrading: Provides training and development programmes to help individuals acquire new skills and improve their employability.
  • Employment assistance: Offers job placement services and career counselling to help individuals find suitable employment.
  • Social support: Provides social support programmes to help families and individuals who are facing financial difficulties or other challenges.
  • Youth development: Runs youth development programmes to promote leadership and character development among young people in the community.

As an employer, what are my obligations regarding SHG contributions?

As an employer, your responsibility is to deduct from your employees' wages the amount they contribute to Self-Help Groups (SHGs). It is important to be aware of the specific SHGs and the corresponding amount to be deducted. 

What are the SHG contribution rates for the respective funds?

The contribution rates for each Self-Help Group are based on the total monthly wages of the employees.

Total monthly wages refer to all remuneration in money due or granted to an employee in respect of his employment, including overtime pay, allowances (e.g., food, shift, or transport allowances), commission, and bonus.

Chinese Development Assistance Council (CDAC) Fund

Total monthly wages Monthly contribution
≤ S$2,000 S$0.50
> S$2,000 to S$3,500 S$1.00
> S$3,500 to S$5,000 S$1.50
> S$5,000 to S$7,500 S$2.00
> S$7,500 S$3.00

Mosque Building Mendaki Fund (MBMF)

Total monthly wages Monthly contribution
≤ S$1,000 S$3.00
> S$1,000 to S$2,000 S$4.50
> S$2,000 to S$3,000 S$6.50
> S$3,000 to S$4,000 S$15.00
> S$4,000 to S$6,000 S$19.50
> S$6,000 to S$8,000 S$22.00
> S$8,000 to S$10,000 S$24.00
> S$10,000 S$26.00

Singapore Indian Development Association (SINDA) Fund

Total monthly wages Monthly contribution
≤ S$1,000 S$1.00
> S$1,000 to S$1,500 S$3.00
> S$1,500 to S$2,500 S$5.00
> S$2,500 to S$4,500 S$7.00
> S$4,500 to S$7,500 S$9.00
> S$7,500 to S$10,000 S$12.00
> S$10,000 to S$15,000 S$18.00
> S$15,000 S$30

Eurasian Community Fund (ECF)

Total monthly wages Monthly contribution
≤ S$1,000 S$2.00
> S$1,000 to S$1,500 S$4.00
> S$1,500 to S$2,500 S$6.00
> S$2,500 to S$4,000 S$9.00
> S$4,000 to S$7,000 S$12.00
> S$7,000 to S$10,000 S$16.00
> S$10,000 S$20.00

Do always check the CPF’s website for the most updated SHG contribution rates.

What is the basis for determining the SHG that the employee will contribute to?

The basis for determining an employee's contribution to Self-Help Groups in Singapore differs depending on the specific SHG. 

For instance:

  • Contributions to the Mosque Building Mendaki Fund (MBMF) are based on the employee's religion.
  • Contributions to other SHGs are based on the employee's race, as indicated on their NRIC. In cases where an employee has a double-barrelled race, the first component of their race can be used to determine which SHG fund they should contribute to.

How are SHG contributions collected?

SHG contributions are collected by the CPF Board on behalf of the SHGs. As an employer, it is your duty to deduct these contributions from your employees' wages when you make the CPF contributions.

Can an employee opt out of the SHG contributions?

Yes, it is possible for employers to opt out of the SHG contributions. An employee who wishes to opt out of SHG contributions can do so by following these steps:

  • Submit an opt-out form to the respective SHGs.
  • Ask the employer for the endorsement.
  • Deductions will stop once the form is submitted.
    • For MBMF, deductions will stop only after the Opt-out Certificate is issued.

For more information, please contact the respective SHGs.

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