Understanding the latest Singapore income tax reliefs (2025)

The information in this article is current as of the latest update on XX September 2024. For the latest information, please check the IRAS website.

While Singapore has one of the lowest personal income tax rates in the world, income tax can still be a significant expense for middle and high-income earners.

Many of them are considering using Supplementary Retirement Scheme (SRS) contributions or CPF top-ups to increase their personal relief, and consequently lower their taxable income. A key concern is that their existing tax reliefs may already exceed the personal income tax relief cap of $80,000, and make any additional relief contribution efforts futile.

In this article, you will find out how much income tax relief you are entitled to through Inland Revenue Authority of Singapore (IRAS) submissions, so that you can make an informed decision around discretionary tax relief contributions to further reduce your income tax, such as SRS contributions and CPF top-ups.

How much of your income is taxable?

Singapore employs a progressive personal income tax system for resident taxpayers. This means that individuals with higher incomes are taxed at increasingly higher rates, with the top personal income tax rate currently set at 24%.

How much personal tax reliefs can you claim?

Retrieving your previous income tax statement

The quick and easy way to estimate your current tax relief is to use your previous tax filing as a proxy for this year's tax.

You can log in to myTax portal at IRAS with Singpass. Under Notices/Letters > Individual, you will be able to access your previous income tax statement, known as the Notice of Assessment (NOA).

After you have downloaded your previous income tax statement/ NOA, look at your Total Personal Reliefs last year. This will form the basis of your tax relief estimate.

Adjusting for changes in your tax relief

Your tax benefits and deductions may change from your previous tax filing. The most common reasons are as follows:

1. Increase in employee contributions of CPF, due to an increase in salary or bonus
2. Being a parent makes you eligible for Qualifying Child Relief and Working Mother Child Relief
3. Having more dependents, which would qualify you for relief such as the Parent/Grandparent relief or Handicapped Brother/Sister relief

Add or subtract any changes to these tax reliefs, and you will have a fairly reflective estimate of your current tax benefits.

Manually calculating your personal tax relief and deductions

To be more precise and accurate with your tax optimisation efforts, you should:

1. Manually identify the different relief schemes that you are entitled to;
2. Find out how much you are getting from the tax reliefs;
3. Sum up all the relief you are getting.

The following are the key types of personal tax reliefs that are part of our entitlement.

Compulsory CPF contributions are exempt from taxes 

We are exempted from paying taxes for any compulsory CPF contribution that we make as employees. 

Note that there is an Ordinary Wage (OW) ceiling cap for CPF contribution. The OW ceiling cap, currently set at $6,800 per month, limits the amount of an employee’s monthly wages that are subject to CPF contributions. 

This means that if your monthly salary exceeds $6,800, the compulsory CPF contributions will only be calculated based on the first $6,800 of your salary. For instance, if your monthly salary is $8,000, the employee portion of monthly CPF contributions will be 20% of $6,800 ($1,360). Consequently, the tax relief you receive for CPF contributions is also capped at this amount.

As announced in Budget 2023, the CPF monthly salary ceiling of $6,000 will be increased to $8,000 in four phases starting from 1 September 2023.  

CPF tax relief is also extended to contributions from your annual bonus and leave pay. The Additional Wage ceiling cap for CPF contribution is calculated based on the below formula:

If you are under 55 years old, the maximum tax relief that you can get from compulsory CPF contributions is or $20,400, or 20% of the CPF annual salary ceiling of $102,000. More examples of how Additional Wage Ceiling CPF contributions can be found on the CPF website.

Parents can reduce their taxable income with child tax relief 

Raising a child in Singapore is expensive. WIth the Qualifying Child Relief, parents can enjoy tax deductions if they have children below 16 years old, who does not have an annual income exceeding $8,000 (from YA 2025). Working mothers also get to enjoy further tax relief with the Working Mother’s Child Relief, with more details to follow below.

Qualifying Child Relief (QCR)/Child Relief (Disability)

Parents may claim QCR/HCR if they are looking after an unmarried child who satisfies all of the following conditions: 

To claim Qualifying Child Relief (QCR)/Child Relief (Disability) for the Year of Assessment 2024, you must satisfy all these conditions in 2023:

1. Your child is unmarried and was/is born to you and your spouse/ex-spouse, or is a step-child, or is legally adopted.
2. Your child was either below 16 years old; or above 16 years old and studying full – time at any university, college or other educational institution at any time in the year
3. Your child did not have an annual income^* exceeding $8,000.

The maximum QCR or Child Relief (Disability) relief you can claim is $4,000 and $7,500 per child respectively.

Working Mother's Child Relief (WMCR)

To qualify for WMCR, you must satisfy all of the following conditions: 

1. A working mother who is married, divorced or widowed
2. Have taxable earned income
3. Have satisfied all conditions under QCR/Child Relief (Disability)

With effect from YA 2025, the WMCR will no longer be a percentage of an eligible working mother’s annual earned income, but a fixed dollar tax relief for working mothers in respect of qualifying children who are Singapore citizens born or adopted on or after 1 January 2024.

You can claim for tax relief from both QCR/Child Relief (Disability) and WMCR, and the claims for QCR/HCR will come first, followed by WMCR. The combined tax relief from both schemes is capped at $50,000 per child.

Dependents tax reliefs

Having a spouse, parent, or grandparent who is under your care also allows you to be entitled to tax reliefs. You may even get Grandparent Caregiver Relief if your parent/grandparent is taking care of your child. The different schemes and the tax reliefs are tabulated below:

Note that there are various criteria that you should take note of before you assume that you are entitled to the relief.

For example, under the Parent Relief, your parent/grandparent cannot have made an annual income of more than $8,000. Similarly, to qualify for Spouse Relief, your spouse should not make an annual income of more than $8,000. In YA 2025, the annual income threshold has been increased from $4,000 to $8,000 for both the above reliefs. It is important to refer to the relevant IRAS page for the latest information. Read more about the Sibling Relief (Disability) here.

Other miscellaneous tax reliefs

You should also include the other key miscellaneous tax reliefs, or refer to IRAS for more information.

IRAS provides a nifty tool to help you identify the various tax reliefs you may qualify for. All you have to do is select your details such as citizenship, gender, marital status, and employment status.

Further reduce your taxable income with CPF and SRS top-ups

Beyond the tax reliefs that were listed previously, you can also do voluntary CPF and SRS top-ups. These tax reliefs encourage Singapore tax residents to save up for retirement. 

Generally, topping up these accounts will give you a dollar-for-dollar income tax reduction, but these funds are highly illiquid, with the first CPF withdrawal only at 55, and penalty-free SRS withdrawal at the statutory retirement age when you made your first contribution..

We have listed out the pros and cons of topping up your CPF and SRS accounts, and how you should decide between CPF and SRS. Start today with Endowus, manage and invest your CPF savings and maximise your retirement savings with your SRS account.

What is the maximum personal income tax relief cap you can claim?

Lastly, after you have identified the different tax reliefs that you are entitled to and summed up all the tax benefits you are getting, you will know the Total Personal Relief that you can get. 

With a maximum personal income tax relief of $80,000, if you have $75,000 worth of Total Personal Relief before SRS contributions or CPF top-ups, you are entitled to $5,000 tax relief from your CPF and SRS top-ups.

Beyond that, it's important to consider your tax bracket after accounting for all the tax reliefs you are entitled to. 

For instance, a young working woman who earned $100,000 last year might find it beneficial to make SRS contributions if she has no children. Without any child-related tax reliefs, she would be in the 11.5% tax bracket, making the tax savings from SRS contributions more attractive.

However, if she becomes a parent and qualifies for additional tax relief related to her child, her taxable income might drop enough to place her in the 7% tax bracket. In this lower tax bracket, the tax savings from SRS contributions are less significant. She would need to weigh these reduced tax savings against the opportunity cost of having less available cash due to the SRS contributions

Hence, understanding how tax reliefs impact your tax bracket can help you decide whether additional contributions to schemes like the SRS are worth the trade-off in available cash.