Singapore offers a variety of tax relief options designed to ease the financial burden on individuals. From personal tax rebates to incentives for upgrading your skills, understanding these relief options can significantly impact your financial strategy.
In this blog, we’ll explore the different tax relief schemes, how they work, and tips on maximising these benefits to reduce your tax liability.
Table of Contents
- How Much Income Tax Do You Pay in Singapore
- Calculating Your Income Tax in Singapore
- How Does Income Tax Relief Work
- How to Reduce Income Tax in Singapore
- Planning Your Budget For the Year
How Much Income Tax Do You Pay in Singapore?
Singapore employs a progressive income tax system, meaning that the more you earn, the higher your tax rate. As of 2024, the tax rates for Singapore residents range from 0% to 24%.
Here’s a breakdown of how much tax you would pay based on your chargeable income:
| Chargeable Income | Income Tax Rate (%) | Gross Tax Payable ($) |
| First $20,000 | 0 | 0 |
| Next $10,000 | 2 | 200 |
| First $30,000 | – | 200 |
| Next $10,000 | 3.50 | 350 |
| First $40,000 | – | 550 |
| Next $40,000 | 7 | 2,800 |
| First $80,000 | – | 3,350 |
| Next $40,000 | 11.5 | 4,600 |
| First $120,000 | – | 7,950 |
| Next $40,000 | 15 | 6,000 |
| First $160,000 | – | 13,950 |
| Next $40,000 | 18 | 7,200 |
| First $200,000 | – | 21,150 |
| Next $40,000 | 19 | 7,600 |
| First $240,000 | – | 28,750 |
| Next $40,000 | 19.5 | 7,800 |
| First $280,000 | – | 36,550 |
| Next $40,000 | 20 | 8,000 |
| First $320,000 | – | 44,550 |
| Next $180,000 | 22 | 39,600 |
| First $500,000 | – | 84,150 |
| Next $500,000 | 23 | 115,000 |
| First $1,000,000 | – | 199,150 |
| In excess of $1,000,000 | 24 | – |
Calculating Your Income Tax in Singapore
Let’s walk through an example. Imagine you are Benson, a Singaporean earning S$120,000 in 2024. Here’s how to calculate your personal income tax based on Singapore’s progressive tax rates:
First S$20,000: Taxed at 0%
Tax: 0% of S$20,000 = S$0
Next S$10,000 (S$20,001 to S$30,000): Taxed at 2%
Tax: 2% of S$10,000 = S$200
Next S$10,000 (S$30,001 to S$40,000): Taxed at 3.5%
Tax: 3.5% of S$10,000 = S$350
Next S$40,000 (S$40,001 to S$80,000): Taxed at 7%
Tax: 7% of S$40,000 = S$2,800
Next S$40,000 (S$80,001 to S$120,000): Taxed at 11.5%
Tax: 11.5% of S$40,000 = S$4,600
Total tax owed: S$200 + S$350 + S$2,800 + S$4,600 = S$7,950
In a nutshell, the more you earn, the higher the tax on your income.
How Does Income Tax Relief Work
If you feel the pinch of paying S$7,950 in taxes a year, you may be glad to know that you can reduce your taxable income through various tax reliefs available.However, note that the personal income tax relief cap in Singapore is S$80,000 annually. This means that you can claim up to S$80,000 in reliefs.
How to Reduce Income Tax in Singapore
1. Top Up Your Supplementary Retirement Scheme (SRS) Account
Contributing to your SRS account is an excellent way to reduce your taxable income. Any voluntary contributions to your SRS account are deductible from your chargeable income, bringing about dollar-to-dollar tax savings.
Example:
If your taxable income is S$100,000, your payable tax before SRS contribution is S$5,650.
But for instance, if you decide to contribute S$15,300 to SRS, your payable tax falls to $3,891*.
All in all, contributing to your SRS account kills two birds with one stone—you get to enjoy a tax break today while building your retirement fund!
Syfe—The Better Place for Your SRS Funds
Did you know that the idle funds in your SRS account only earns an interest rate of 0.05%? Rather than leave your money sitting around, why not try to optimise the benefits of your SRS funds by investing it?
Through Syfe’s Core Equity100, Income+ or Cash+ Flexi (SGD) SRS portfolios, you can go beyond simply tax savings and accelerate your retirement goals with our bank-beating returns.
Here are some key benefits of our SRS portfolios:
- Average annual returns of 10.81% over the past 8 years.
- 100% equity with diversified exposure to over 5,000 stocks and automatic dividend reinvesting.
- Built-in partnership with world-class fund managers like Amundi and Dimensional.
- Low fund level fees of 0.15% p.a.
- Yield-to-maturity of 6.7% to 7.2% per annum.
- Generates steady monthly dividends that are automatically reinvested to maximise returns.
- Full flexibility – no lock-in, no withdrawal penalties, no minimum balance.
- Institutional fund access at a fraction of the cost and up to 60% of savings on fund-level fees.
- Hedged against the Singapore dollar to minimise the impact of currency fluctuations.
- Significantly lower fees compared to retail bond funds.
- Multiply your returns by over 70x, smashing interest rates of 0.05% in traditional SRS bank accounts.
- Low-risk portfolio that generates consistent and steady returns, no minimum investment required.
- Returns in line with Singapore money market rates at 3.2% p.a.
SRS can seem overwhelming with its various rules and investment options. With our curated portfolios picked to ensure a more secure retirement future, we simplify the complexities of SRS investments, providing clear guidance and user-friendly tools, making it easier for clients to maximise the benefits of the SRS.
Check out Core Equity100, Income+ and Cash+ Flexi (SGD) today.
2. Top Up Your CPF Account
You can also reduce your tax by making voluntary contributions to your CPF accounts. Singaporeans or Permanent Residents (PRs) who make voluntary cash contributions to your CPF Special Accounts (SAs), Retirement Accounts (if you are 55 or above), or Medisave Accounts may qualify for the Central Provident Fund (CPF) Cash Top-up Relief.
Here are the tax reliefs you may qualify for:
| Cash Top-ups Made To | Allowable Relief |
| CPF cash top-up to self: Special Account (for recipients below age 55) Retirement Account (for recipients age 55 and above) | Up to S$8,000 |
| CPF cash top-up to loved ones* | Up to S$8,000 |
| Medisave cash top-up to self or loved ones* | Up to S$8,000 |
*Loved ones refer to your parents, parents-in-law, grandparents, grandparents-in-law, spouse or siblings. To qualify for tax relief for cash top-ups made to spouse/siblings, the recipient must (i) not have an annual income exceeding $8,000 in the year preceding the year of cash top-up (e.g. salary, tax exempt income such as bank interest, dividends and pension), or (ii) be handicapped.
3. Upgrade Your Skills
Singapore’s Course Fees Relief is designed to encourage lifelong learning. If you take job-related courses or certifications, the fees are deductible for tax purposes (up to S$5,500 per year). However, courses must be relevant to your current or future career, so general interest courses like photography won’t qualify.
For the self-education expenses to be tax deductible, they must fall under the following categories:
- Fees for aptitude tests
- Examination fees
- Registration/enrolment fees
- Tuition fees
4. Donate to Charities
Charitable donations are tax-deductible in Singapore. Cash donations made to approved Institutions of a Public Character (IPCs) or the Singapore Government qualify for a 2.5 times tax deduction.
5. Take Care of Your Ageing Parents
Singapore offers Parent Relief and Parent Relief (Disability) for individuals who are supporting their elderly or disabled parents. You can claim up to S$9,000 in relief per dependent parent, or S$14,000 for disabled parents.
To qualify for the scheme, the dependent
- must be 55 years old or above,
- is living in your household or
- has disability or mental impairment (if you’re making a claim under the Parent Relief (Disability) scheme.
Planning Your Budget For the Year
The earlier you start planning for tax filing season, the more you can save. By making tax-saving contributions now, you’ll be in a stronger position come tax season. By maximising the available tax reliefs, you can lower your taxable income, reduce your overall tax liability, and improve your financial outlook for the year. Take advantage of these tax-saving strategies, and be sure to consult a tax professional or financial advisor to make sure you’re on track.
Read More:
Singapore Budget 2025: Top 5 Takeaways for Your Personal Finances
Syfe Portfolio Performance Review for 2024: A Showcase of Growth and Resilience
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