Singapore Income Tax: Employment Expenses

Employment expenses are defined expenditures which occur as part of your employment and are deemed as viable for deduction (wholly or in part) from your income for tax purposes.

Employment expenses reduce the amount of tax that you pay by reducing your taxable income.

Employment Expenses Criteria

To qualify as an Employment Expense for taxation purposes, the expense MUST be incurred 'wholly and exclusively' within your employment activities that occur in Singapore.

Employment expenses are permitted when they have not been, or planned to be reimbursed by your, employer and:

1. Are not capital or private in nature
2. Occur ONLY as part of your official duties

How to claim Employment Expenses in your 2023 Tax Return

Employment Expenses are recovered by entering them into the Employment Expenses field in your tax return. You can use the Singapore Tax Calculator to review how your income tax return will look and how much income tax you will need to pay.

It is important that you keep good records when claiming Employment Expenses as you can be audited. If you intend to claim employment expenses we suggest that:

1. Get into the habit of keeping good records which include all receipts, invoices and associated documentation in regard to the expense. You should also keep a record of why you were travelling and the activity involved (so you can prove the activity was employment related).
2. File and date all your expense records. Associated expense document (a train, plane and food receipt for example) should be stapled together with a piece of paper on the top which has the date, total expenses involved and reason for expense. This makes auditing easy.
3. Store all expenses from the same year in a large envelope (or box if you have a lot!). Write the year on the envelope, the day you filed your tax return, total expenses and include a copy of your tax return. This makes auditing simple.
4. Keep all your records for 5 years - This is a legal requirement under Singapore Tax law.
5. If you have a large number of receipts and activities it is worthwhile keeping a spreadsheet which summarises the details. This again makes auditing simple.

By following the good record keeping techniques, you will be able to provide a robust tax return and provide an accurate summary if the IRAS (Inland Revenue Authority of Singapore) request your Employment Expenses records.

Next: Net Employment Income

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