Adulting Taxes

Tax Reliefs in Singapore: 6 Ways to Reduce Your Personal Income Tax

byIrene A
  • Feb 13, 2024
  • 13 mins
tax relief

If you live and work in Singapore, there’s a good chance you’ll need to file and pay personal income tax here. The filing process is simple and straightforward — head to myTax Portal and declare your income, deductions, and tax reliefs. If you’re an employee whose company is participating in the Auto-Inclusion Scheme, you simply need to check the salary information provided by your employer and click submit.

How much personal income tax you pay depends on your chargeable income, which is based on your total employment income, such as annual salary and bonuses. If you’re a landlord, you will also get taxed on your rental income. Income, such as interest from approved banks or capital gains, isn’t taxed in Singapore. To make sure you’re calculating your chargeable income correctly, refer to IRAS’s list of what is taxable and what is not.

Singapore uses progressive rates to tax its tax residents, which simply means that you get taxed more the higher your income is. You can refer to this table to get an idea of how much income tax you need to pay in 2024.

Chargeable Income Income Tax Rate (%) Gross Tax Payable ($)
First $20,000
Next $10,000
First $30,000
Next $10,000
First $40,000
Next $40,000
First $80,000
Next $40,000
First $120,000
Next $40,000
First $160,000
Next $40,000
First $200,000
Next $40,000
First $240,000
Next $40,000
First $280,000
Next $40,000
First $320,000
Next $180,000
First $500,000
Next $500,000
First $1,000,000
In excess of $1,000,000

This information is correct at the time of publishing. For more updated information, visit the IRAS website.

Tax reliefs are given by the government to recognise your contributions to Singapore’s most important social objectives, such as starting a family and saving for your own retirement. They are deducted from your chargeable assessable income, which means you can end up paying less income tax. Do note that a personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed for each year of assessment.

There are a few months left until the next tax season, which gives you plenty of time to learn how to make the most of your tax reliefs in Singapore and reduce your personal income tax.

tax relief for parents

There are many challenges that come with starting a family, but the government offers substantial support through tax relief for parents. These reliefs are designed to alleviate the financial burden of childcare and encourage the nurturing of the next generation.

Tax Reliefs for Parents who are Singapore tax residents
Tax Relief For Whom^ Amount
Qualifying Child Relief (QCR) Mothers and fathers (to be shared based on agreed apportionment) Maximum $4,000 per child
Parenthood Tax Rebate§ Mothers and fathers (to be shared based on agreed apportionment) $5,000 for the first child
$10,000 for the second child
$20,000 for third and each subsequent child

This is a one-time claim that must be made the year following your child’s birth
Handicapped Child Relief (HCR) Mothers and fathers (to be shared based on agreed apportionment) $7,500 per child
Working Mother’s Child Relief (WMCR)# Working mothers As a percentage of mother’s earned income:
  • 15% for the first child
  • 20% for the second child
  • 25% for the third and each subsequent child
Grandparent caregiver relief Working mothers $3,000 on only one caregiver
Foreign Domestic Worker Levy Relief Working mothers 2X the amount of levy paid for 1 foreign domestic worker

^ Each relief/rebate has its own qualifying conditions, which must be satisfied for the relief/rebate to be applied.
§ This is a rebate not a relief.
# Note that the total cap for QCR plus WMCR is $50,000 per child.

Imagine you are a parent with two children under the age of 16. For the Year of Assessment 2024, you can claim Child Relief for each child. The relief amount is substantial, offering $4,000 per child. This means, for your two children, you can claim a total of $8,000 in tax relief.

Let's break this down with an example:

Your Annual Income: $60,000
Standard Child Relief for Two Children: $8,000 ($4,000 per child)
Taxable Income after Child Relief: $52,000 ($60,000 - $8,000)

By applying this relief, your chargeable income is significantly reduced, which in turn lowers your tax liability. This reduction not only provides immediate financial relief but also promotes long-term financial planning for your children's future.

The government recognises the high cost of elderly care and encourages Singaporeans to look after their aged parents. That is why Parent Relief lets you claim tax relief if you have supported your parents, as well as your grandparents or parents- and grandparents-in-law in the previous year.

Consider Ms. Lee, a 38-year-old marketing manager living in Singapore. Her annual income is $95,000, and she has been supporting her 65-year-old mother, who does not have any income. Her mother lives with her, which qualifies Ms. Lee for the higher tier of Parent Relief.

Here’s how Parent Relief can be applied in Ms. Lee's situation:

Annual Income: $95,000
Parent Relief Claimable for Supporting Elderly Parent: $9,000
Taxable Income after Claiming Parent Relief: $86,000 ($95,000 - $9,000)

By claiming Parent Relief, Ms. Lee can reduce her taxable income to $86,000. This not only lowers her tax liability for the year but also acknowledges her contribution to her mother's care.

How to Qualify

To qualify, your parent needs to be at least 55 years of age and have an annual income of not more than $4,000 (or be physically or mentally disabled, in which case age and income criteria do not apply), and if your parent was living in a separate household, you must have incurred at least $2,000 in supporting him or her that year.

Parent Relief
  Handicapped Parent Relief Parent Relief
(Dependant ≥ 55 Years Old)
Parent lives with you $14,000 per dependant $9,000 per dependant
Parent does not live with you $10,000 per dependant $5,500 per dependant

Note that you can only claim for 2 dependent parents maximum, and that your spouse cannot make a tax relief claim for supporting the dependent parents. Parent Relief may also be shared.

tax relief

The tax relief for educational course fees is designed to encourage individuals to engage in continuous learning, be it for professional advancement or acquiring new skills relevant to their current employment. If you’ve been upskilling or reskilling, there’s a good chance you can claim tax relief for them.

Let’s say you decide to pursue a part-time certification course in digital marketing to enhance your skills in the burgeoning field of online advertising. This course, directly relevant to your current job in marketing, costs $3,000.

Here's how you can leverage the tax relief for course fees:

Your Annual Income: $70,000
Course Fees Paid: $3,000
Maximum Claimable Relief for Course Fees: $5,500 (annual cap)

Since the cost of your course is within the allowable limit, you can claim the full amount of $3,000. This means your taxable income for the year can be reduced to $67,000 ($70,000 - $3,000), effectively lowering your tax burden.

How to Qualify

To qualify for this relief, the course must either lead to an approved academic, professional, or vocational qualification or be relevant to your current employment. You can also claim for any exam, test or registration fees incurred.

You may not, however, make claims for holiday jobs or internships, even if they did contribute to your graduation from a course of study. You also can’t enjoy tax relief for courses related to a hobby, leisure or general skills like basic website building.

Check the IRAS website to find out if your course qualifies for relief.

If you’re passionate about animal welfare, environmental conservation, or serving the community, tax relief is another great reason to donate to your favourite cause. Donations to organisations classified as Institutions of a Public Character (IPC) or to the Singapore government for causes that benefit the local community qualify for a tax deduction of 250%.

Let’s say you donate $1,000 to the Cat Welfare Society, and your income for the year is $36,000. These will be the calculations:

Your Annual Income: $36,000
Your Donation: $1,000
Tax Deduction: $2,500
Accessible Income: $33,500

Besides cash, individual donors can also get tax relief for these donations:

Tax Reliefs for Donations
Item Donated To Whom Value of Donation
Cash Approved IPCs or the Singapore government 250% of the donated amount (until 31 December 2026)
Public shares listed on the Singapore Exchange (SGX) or units in unit trusts traded in Singapore Approved IPCs The IPC will determine the value of the donated shares or units. It will be based on the price of the same type of shares or units in the open market, at the last transaction of the shares or units on the date they were donated.
Artefacts National Heritage Board (NHB) or museums with Approved Museum Status The museum or NHB will assess the worth of the donated artefact
Sculptures or works of art National Heritage Board (NHB) The NHB will assess value of the donated sculpture or work of art
Land or buildings Approved IPCs The donors or the approved IPC should meet with a property valuer to get a market value appraisal of the donated property. The amount of the donation will be based on the property’s market value endorsed by the IRAS.

The cost of property valuation is not tax deductible.

How to Claim

Tax deductions for qualifying donations will be automatically reflected in your tax assessment based on the information from IPC and will require no action on your part.

You do not need to declare the donation amount in your income tax return. Tax deductions for qualifying donations will be automatically reflected in your tax assessments based on the information from the IPC (such as the donor's name, date and amount of donation on the tax deduction receipt). Note that IRAS will no longer accept claims for tax deductions based on donation receipts.

filing for tax relief

There are many benefits to getting a life insurance policy. Besides your and your family’s future, you may also be eligible to lower your CPF contributions through the Life Insurance Relief.

If you qualify for life insurance relief, you can claim the lower of the following tax relief amounts:

  • $5,000 minus your CPF contribution; or
  • Up to 7% of the insured value of your own or your significant other’s life, or the amount of insurance premiums paid.

Imagine you are a 30-year-old professional earning $40,000 per year. You've taken out a life insurance policy with an annual premium of $2,000. Your CPF contribution for the year amounts to $4,800. Here’s how you can benefit from the Life Insurance Relief:

Annual Income: $40,000
Annual Life Insurance Premium: $2,000
CPF Contribution for the Year: $4,800
Maximum Relief Claimable: $5,000 minus your CPF contribution (i.e., $5,000 - $4,800 = $200)

In this scenario, you can claim a tax relief of $200 (the lower of your annual premium of $2,000 or the $200 calculated above). This relief will reduce your taxable income to $39,800, leading to a slight decrease in your overall tax liability.

Visit the IRAS life insurance relief page for more details on how the relief is calculated.

To qualify for this type of tax relief, you may want to consider a life insurance policy, such as Income Insurance’s Star Term Protect or Star Secure Pro. These policies are designed to protect you and your family in the event of death, terminal illness or total and permanent disability.

If you're not sure which life insurance plan is best for your needs, connect with our advisors for personalised advice.

How to Qualify

To qualify for this relief, your employee CPF contribution or compulsory Medisave/voluntary CPF contribution as a self-employed individual must be less than $5,000.

Additionally, the premiums paid should be for your own life insurance policy. Premiums made for policies under your spouse’s or parents’ name will not qualify. Premiums for ElderShield, CareShield Life or Integrated Shield Plans also do not qualify for life insurance relief.

Tax reliefs are another great reason to start saving for retirement if you haven’t done so yet. Topping up your CPF and Supplementary Retirement Scheme (SRS) accounts is one of the simplest things you can do to lower your chargeable income. Here are the tax reliefs that you might qualify for:

Tax Reliefs for CPF and SRS Cash Top-Ups
Tax Relief Relief Amount
CPF Cash Top-Up Relief (own SA or RA) Up to $8,000
CPF Cash Top-Up Relief (family member’s SA or RA) Up to $8,000
SRS Tax Relief Up to $15,300 for Singapore Citizens and PRs.
Up to $35,700 for Foreigners.

CPF Cash Top-Up Relief

You’re eligible for a CPF cash top-up relief if you’re a Singaporean or Permanent Resident (PR) who has made voluntary CPF cash top-ups to your own Special Account or Retirement Account in the preceding year under the CPF Retirement Sum Topping-Up Scheme.

Under the same scheme, you can also claim an additional up to $7,000 in tax relief for topping up the CPF accounts of your parents, in-laws, grandparents or grandparents-in-law. If your spouse or sibling fell on hard times last year, you can get tax relief by topping up their accounts, provided their annual income was $4,000 or less in the previous year.

Note that the maximum tax relief you can claim under this category is $14,000—namely, $7,000 for topping up your own account and up to $7,000 for topping up a family member’s. CPF cash top-up relief is automatically granted to those who are eligible, based on the records sent to IRAS by the CPF Board.

SRS Tax Relief

Did you know that every dollar you contribute to your SRS account reduces your taxable income by a dollar? Of course, there’s a limit to how much you can contribute to your SRS (and, therefore, the tax relief you can get). For Singaporeans and PRs, this amount is $15,300.

Consider Mr. Tan, a 45-year-old professional in Singapore with an annual income of $80,000. He is conscious of his future financial needs and decides to actively contribute to his SRS account. In 2024, he contributes $12,000 to his SRS account.

Here's how Mr. Tan can benefit from the tax relief:

Annual Income: $80,000
SRS Contribution for the Year: $12,000
Taxable Income after SRS Contribution: $68,000 ($80,000 - $12,000)

By contributing to his SRS, Mr. Tan effectively reduces his taxable income from $80,000 to $68,000, thus lowering his overall tax liability. This strategic move not only results in immediate tax savings but also secures funds for his retirement years.

Do note that you’re not allowed SRS tax relief if your SRS account is suspended as of 31 Dec of the year of contribution or the amount of such contribution is withdrawn from the account in the same year of contribution.

Besides the SRS tax relief, you can also consider investing your SRS savings into an insurance savings plan or retirement plan to keep up with inflation. A retirement plan you might consider is Income’s Gro Retire Flex Pro. With this plan you can look forward to these benefits:

  • Receive monthly cash payouts1 consisting of a monthly cash benefit2 during your payout period and a non-guaranteed cash bonus on top of each monthly cash benefit.
  • Flexibility to choose when you want to start receiving your monthly cash payouts1.

How to Claim

You’re not required to make a claim for both CPF Cash Top-Up Relief and SRS Tax Relief in your Income Tax Return as it will be granted automatically to those who are eligible.

Paying taxes makes Singapore a comfortable place to live in, but it’s not the only way to contribute to the country. By doing things like topping up your CPF, joining the SRS scheme, donating to an approved IPC, or getting a life insurance plan, you can earn a significant amount of tax savings. Just remember to do these things before the end of the year to qualify for the tax reliefs.

Tags: Adulting Taxes

Related Articles

Aligning Finances with Life Goals-image
AdultingFinancial Planning

Investing with Purpose: Aligning Your Finances to Life Goals

Align your life goals based on your portfolio. Learn about purposeful investing & how Investment-Linked Plans (ILPs) can help achieve financial security.
byVictor Yeo
  • Jul 10, 2024
  • 1 mins
AdultingFinancial Planning
Life Insurance in Your 20s-image
AdultingFinancial PlanningLife Insurance
Finance Matters

Let’s Talk About Life Insurance in Your 20s

You may think that it is too early to get life insurance when in your 20s. Let’s debunk some of those myths, shall we?
byEwen Boey
  • Jun 20, 2024
  • 1 mins
AdultingFinancial Planning
Income Tax Singapore-image
Finance Matters

How To Pay Income Tax in Singapore: What You Need to Know

Filing your income tax in Singapore doesn’t have to be so difficult. Read our comprehensive guide to help you navigate the annual tax season challenges.
byShu Rin Hoe
  • Jan 26, 2024
  • 10 mins