Income Tax Relief: 5 Ideas to Lower Your Payable Tax in Singapore

By
Syfe Singapore
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Singapore offers a variety of tax relief options designed to individuals like you and I ease our financial burden .

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. 

Table of Contents

How Much Income Tax Do You Pay in Singapore?

Singapore uses a progressive tax system for personal income tax, meaning, the more you earn, the higher your tax rate. For tax residents, the tax rates range from 0% to 24% (as of 2024). 

Here’s quick rundown of how much tax a Singaporean pays:

Chargeable IncomeIncome Tax Rate (%)Gross Tax Payable ($)
First $20,00000
Next $10,0002200
First $30,000–200
Next $10,0003.50350
First $40,000–550
Next $40,00072,800
First $80,000–3,350
Next $40,00011.54,600
First $120,000–7,950
Next $40,000156,000
First $160,000–13,950
Next $40,000187,200
First $200,000–21,150
Next $40,000197,600
First $240,000–28,750
Next $40,00019.57,800
First $280,000–36,550
Next $40,000208,000
First $320,000–44,550
Next $180,0002239,600
First $500,000–84,150
Next $500,00023115,000
First $1,000,000–199,150
In excess of $1,000,00024–
Source: IRAS

Calculating Your Income Tax in Singapore

To illustrate how to calculate your personal income tax, imagine you’re Benson—a Singaporean who’s earned SGD 120,000 in 2024.

Let’s see how much tax you’d owe based on Singapore’s progressive tax rates:

First SGD 20,000: Taxed at 0%
Tax: 0% of SGD 20,000 = SGD 0
Next SGD 10,000 (SGD 20,001 to SGD 30,000): Taxed at 2%
Tax: 2% of SGD 10,000 = SGD 200
Next SGD 10,000 (SGD 30,001 to SGD 40,000): Taxed at 3.5%
Tax: 3.5% of SGD 10,000 = SGD 350
Next SGD 40,000 (SGD 40,001 to SGD 80,000): Taxed at 7%
Tax: 7% of SGD 40,000 = SGD 2,800
Next SGD 40,000 (SGD 80,001 to SGD 120,000): Taxed at 11.5%
Tax: 11.5% of SGD 40,000 = SGD 4,600
Total amount of tax owed: SGD 200 + SGD 300 + SGD 2,800 + SGD 4,600 = SGD 7,950

In a nutshell, the more you earn, the higher your tax rate on the portion of income that falls into each bracket.

How Does Income Tax Relief Work

If you’re Benson, you might feel the pinch of paying a whopping SGD 7,950 in taxes. But fret not, Singapore’s tax system has various tax reliefs that are deducted from your chargeable income, reducing your income tax.

Below are some ways to reduce your income tax in Singapore and how these methods work.

What is the Maximum Income Tax Relief in Singapore

It’s important to note that there’s a personal income tax relief cap of $80,000 each year, so you’ll need to plan how you want to reduce your income tax carefully to avoid having your efforts go down the drain.

How to Reduce Income Tax in Singapore

1. Top Up Your Supplementary Retirement Scheme (SRS) Account

Contributing to your Supplementary Retirement Scheme (SRS) account is a great way to reduce your income tax. 

SRS is a voluntary scheme designed to grow your savings for retirement over time. Any contributions made to your SRS account can help you unlock equal deduction on your chargeable income.

Here’s how it works:

Assuming you have a taxable income of $100,000, your payable tax before SRS contribution is $5,650.

But for instance, if you decide to contribute $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 you work towards retirement!

Syfe—The Better Place for Your SRS

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:

  • Provide index funds compared to competitors

Syfe’s Core Equity100 SRS portfolio is Singapore’s first equity portfolio that’s been built using the best-in-class SRS-eligible index funds in the market, and has demonstrated high historical returns over the past 8 years.

  • Built in partnership with the best

We provide access to world class managers—Blackrock, Amundi, Dimensional, and PIMCO.

  • Simplified and curated

SRS can appear overwhelming due to its various rules and investment options.

At Syfe, we simplify the complexities of SRS investments, providing clear guidance and user-friendly tools, making it easier for clients to navigate and maximise the benefits of the SRS with curated portfolios picked to ensure a more secure retirement future.

2. Top Up Your CPF Account

One of the easiest ways to reduce your income tax is to do cash top-ups to your CPF account.

Singaporeans or Permanent Residents (PRs) who make voluntary cash contributions to their 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 toAllowable relief
CPF cash top-up to selfSpecial Account (for recipients below age 55Retirement Account (for recipients age 55 and above)Up to SGD$8,000
CPF cash top-up to loved ones*Up to SGD$8,000
Medisave cash top-up to self or loved ones*Up to SGD$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 $8,0001 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

The Course Fees Relief scheme is designed to encourage continuous learning. 

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.

One thing to keep in mind, to qualify for the relief, the course must be relevant to your current job or a job you’re planning to take up. So courses recreation, leisure, hobby or general knowledge (e.g. photography or language) are not eligible for relief. 

Also note that there’s also a maximum claimable of $5,500, so it’s best to plan your courses wisely.

When you donate to charities in Singapore, it not only benefits the cause you care about, it’s also a way to reduce your income tax.

Any cash donations made to an approved Institution of a Public Character (IPC) or the Singapore Government will warrant tax deductions of 2.5 times the donation amount.

Do note of the following when making a donation:

  • The charity you donate to must be an approved Institution of a Public Character (IPC) for causes that benefit the local community
  • Not all registered charities are approved IPCs and donations made to these charities are not tax deductible

5. Take Care of Your Ageing Parents

The Singapore Government introduced 2 tax relief schemes (Parent Relief/Parent Relief (Disability)) to promote filial piety and recognise individuals who are supporting their parents, grandparents, parents-in-law or grandparents-in-law in Singapore.

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

Tax filing season might be a couple of months away, but you know what they say about the early bird. So start calculating and planning today and ensure smooth savings on your tax bill!

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