Employment expenses are expenses that are 'wholly and exclusively' incurred in the production of your employment income in Singapore. These expenses may be deducted from your employment income as long as they are allowable expenses.
The expense may be allowed when the following conditions are satisfied:
You need to enter your employment expenses claim under 'Employment Expenses' in your tax return
You have to keep complete and proper records of all expenses incurred for 5 years. For example, expenses incurred in 2018 for YA 2019 must be kept and retained until 31 Dec 2023. These records and accounts must be supported with invoices, receipts, vouchers, and other documents. Please submit the supporting documents only when we request for them. IRAS will not accept estimates and improper records. For details, please refer to Keep Proper Records & Accounts .
Use the Employment Expenses Schedule (50 KB) to record the details of the expense. Remember to keep all invoices, receipts, vouchers, etc.
39KB, XLS
Employment income and payback to company for breach of employment contract are two separate types of payment.
The employment income that you received was for services you rendered when you were still employed by the company and is therefore taxable. The amount you pay back to your company is its compensation when you breached your employment contract. This is considered as liquidated damages. Liquidated damages are not tax deductible as an expense and it cannot be offset against your employment income.