5 Best Ways to Reduce Income Tax in Singapore (2024)

While there’s still some time before tax season, now is the best time to start calculating how much income tax you’ll likely need to pay. To prepare, here are some ways you can reduce your income tax in Singapore.

Joyce Chua

by Joyce Chua on Feb 5, 2024

tax plan

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Tax season for Year of Assessment (YA) 2024 may not be until March, but it’s best to prepare for it sooner rather than later. The income you earned from 1 Jan to 31 Dec 2023 will be considered for YA 2024, where you’ll need to pay your taxes for it throughout 2024.

Here are the tax rates for Singapore residents in YA 2024 onwards.

Resident Income Tax Rates

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Chargeable IncomeIncome Tax Rate (%)Gross Tax Payable ($)
First $20,000
Next $10,000
0
2
0
200
First $30,000
Next $10,000

3.50
200
350
First $40,000
Next $40,000

7
550
2,800
First $80,000
Next $40,000

11.5
3,350
4,600
First $120,000
Next $40,000

15
7,950
6,000
First $160,000
Next $40,000

18
13,950
7,200
First $200,000
Next $40,000

19
21,150
7,600
First $240,000
Next $40,000

19.5
28,750
7,800
First $280,000
Next $40,000

20
36,550
8,000
First $320,000
Next $180,000

22
44,550
39,600
First $500,000
Next $500,000

23
84,150
115,000
First $1,000,000
In excess of $1,000,000

24
199,150

IRAS has adjusted the top marginal personal income tax rates in 2024. They introduced two new tiers. High income individuals will now find their annual income earned between S$500,000 and S$1 million taxed at 23% and any income earned in excess of S$1 million taxed at 24%. This is an increase from the previous personal income tax rates from YA 2017 to YA 2023 whereby all income earned in excess of S$320,000 was taxed at 22%.

Your salary will be taxed regardless of whether you are traditionally employed or working freelance. Your bonuses and — if you are a landlord — rental income are all subject to personal income tax. Compulsory CPF contributions, dividends from shares and capital gains, however, are exempt from taxation.

Here are a few ways to reduce your personal income tax.

1. Save Up For Retirement

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Source: Unsplash

The best way to reduce your taxes is to top up all you and your parents CPF accounts. You are able to get tax relief when you top up your Special Account and Medisave account, as well as your loved ones’ Special Account and Retirement Account. You can also put money in your Supplementary Retirement Scheme (SRS) account to reduce your taxable income.

CPF Retirement Sum Topping-Up Scheme (RSTU)Top up your Special Account and the amount will be deducted from your chargeable income, for up to S$8,000.

On top of that, top up your parents or grandparents’ CPF SA/RA for additional relief for up to S$8,000. This applies for up to the current Full Retirement Sum — you won’t get tax relief for anything beyond that.

MedisaveTop up your Medisave account up to the Basic Healthcare Sum of $71,500 (as of 2024).

As with the CPF SA, your funds will be locked up for a while, but you will be able to use it for medical expenses and health insurance premiums.

Supplementary Retirement Scheme (SRS)Place some cash, up to $15,300  for Singaporeans and Singapore permanent residents, in an SRS account, where it can only be withdrawn after you retire.

Be sure to invest the money in that account, otherwise inflation will cause it to depreciate.

Related: Everything You Need To Know About Supplementary Retirement Scheme (SRS)

In short, every S$1 that you put into your own or your loved ones’ accounts will mean S$1 deducted from your chargeable income. Unfortunately, this requires some prior planning. Any CPF or SRS top-ups had to be done by 31st of December 2023. Any voluntary contributions you make now to you or your parents CPF accounts as well as your SRS account will serve as income tax deductibles in 2025 not 2024.

Do note that in both instances, your funds will be locked up for a while. It is best to make sure that whatever money you contribute to both your CPF and SRS accounts is money you have earmarked for your retirement or medical expenses and not money you might need in the immediate future.

When filing your taxes, you don’t have to declare your voluntary retirement top-ups, as CPF and the local banks operating the SRS accounts will report your activities to IRAS. However, do check your tax documents to ensure that your contributions are reflected.

2. Move In With Your Parents

moving boxes into car
Source: Pexels

To solve the issue of an ageing population, the government has implemented Parent Relief to get the senior citizens’ own children to take care of them. So if you live with your parents, grandparents, in-laws or grandparents-in-law, you get to enjoy a tax break.

Type of Parent ReliefParent ReliefHandicapped Parent Relief
Taxpayer stays with dependantS$9,000 per dependantS$14,000 per dependant
Taxpayer does not stay with dependantS$5,500 per dependantS$10,000 per dependant
Source: IRAS

Parent Relief applies if the senior citizens don’t earn over S$4,000 annually. You can only claim for two dependents, and you and your spouse’s claims cannot overlap on the same person, i.e. no double-claiming.

There are also tax reliefs — albeit more modest ones — for sheltering / caring for your handicapped sibling and your low-income spouse.

Related: How to Help Your Parents If They Don’t Have a Retirement Plan

3. Upgrade Your Skills

studying laptop
Source: Unsplash

If you intend to upskill, not only will you gain more skills, you’ll also qualify for tax reliefs of up to S$5,500 thanks to the course fee relief.

The Course Fees Relief is for you if you took a course relevant to your current employment. You can claim the amount you spent on course and exam fees (up to $5,500) and have it deducted from your chargeable income.

Even if you choose a course that was totally different in order to make a mid-career switch? Don’t throw away those invoices just yet; you can still claim the tax relief in the future when you transition to your new job.

Related: Making a Career Switch? These Are the Most Lucrative Industries to Be In 2024 and Beyond

4. Make a Donation

holding loose coins
Source: Unsplash

While you probably already know that donating money to an IPC (Institution of a Public Character) can help to reduce your income tax, did you know that you can also donate shares, artworks and artefacts?

Donations to IPCs give you a 250% tax deduction, so if you donate S$1,000, you’ll have S$2,500 shaved off your chargeable income. Other tax deductible donations include SGX-listed shares, units in unit trusts, artefacts, sculptures or artworks to the National Heritage Board, buildings, as well as land.

You don’t have to declare your donations to the registered IPCs to claim the tax relief, as they will be automatically submitted to IRAS. If your donation is eligible for tax relief, the receipt from the IPC will say “Tax-Deductible”. Note that the IPCs will have to collect the details of all donors (NRIC, FIN or UEN) to facilitate the tax deduction.

 Related: 3 Reasons Donating Money Can Be Good For Your Wallet

5. Have Babies

baby
Source: Unsplash

Thanks to the government’s efforts to encourage more births in Singapore, not only will parents receive Baby Bonus, they can also enjoy a bunch of tax reliefs, including Working Mother’s Child Relief, Qualifying Child Relief + Parenthood Tax Rebate.

Tax reliefsFor whomAmount
Qualifying Child ReliefBoth parentsS$4,000 per child ($7,500 if handicapped)
Working Mother’s Child ReliefWorking mothers
  • Children born before 1 Jan 2024 – 15% for first child, 20% for second child, 25% for third or more
  • Children born on 1 Jan 2024 onwards – S$8,000 for first child, $10,000 for second child, S$12,000 for third child onwards
Grandparent Caregiver ReliefWorking mothersS$3,000
Foreign Maid Levy ReliefMothers2x of maid levy paid (max. 1 maid only)
To encourage married women to remain in the workforce after having children, the government gives working mothers the most tax deductions. For instance, having three kids will help to reduce your chargeable income by 60%. Meanwhile, the Parenthood Tax Rebate is a direct rebate for your income tax bill (not just a reduction from your taxable income) — it shaves S$5,000 off for the first child, S$10,000 for the second, and S$20,000 for the third and every subsequent child. Parents can also get another S$3,000 off by having their parents babysit.

And this is just the tip of the iceberg when it comes to tax relief schemes for parents, so visit the IRAS page for more details.

Most of these tax deductions are granted automatically, but just check your tax statement to be sure.

Now that you know the different types of income tax relief you can claim to reduce your taxable income, make sure you also find the best way to pay off your taxes. Check out our roundup of the best credit cards to pay off your income tax to get the most bang for your buck today!

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