Unlike employees, platform workers may incur significant work expenses which are not reimbursed (e.g. fuel cost). Hence, the computation of CPF will be based on net earnings after taking into consideration such expenses. The net earnings will be based on gross earnings minus the Fixed Expense Deduction Amount (FEDA). The use of FEDA reflects expenses for the vast majority of platform workers.

 

The FEDA takes reference from the Fixed Expense Deduction Ratio developed by IRAS for the computation of net earnings for tax purposes. This is based on actual expense ratios, including industry feedback and surveys on the expenses of workers. Some of the common allowable business expenses incurred by delivery workers and PHC/ taxi drivers include:

 

• Rental costs
• Fuel/charging costs
• Repairs and maintenance costs
• Parking
• Service fees paid to operators
• Mobile phone subscription plan
• Road tax

The use of FEDA provides significant convenience for both you and your platform operators. You will not have to keep receipts to track and compute actual expenses for your platform work and submit them to your platform operators. Your platform operators will not have to incur additional operating costs to re-compute the CPF contribution based on actual expenses.