Deductions on Employment Expenses
Examples of allowable employment expenses that may be deducted against your employment income to reduce the amount of tax payable, and how to claim allowable employment expenses.
Employment Expenses
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.
Allowable Expenses
The expense may be allowed when the following conditions are satisfied:
- The expense was incurred while carrying out your official duties;
- The expense was not reimbursed by your employer; and
- The expense was not capital or private in nature.
- Entertainment expenses incurred in entertaining clients. Please note that you need to exclude your share of the entertainment (e.g. meal) expenses.
- Mosque building fund, zakat fitrah or any other religious dues authorised by law.
- Subscriptions paid to professional bodies or society for professional updates, knowledge and networking.
- Travelling expenses incurred on public transport, such as buses, trains, taxis.
Working from Home Expenses
If you are required by your employer to work from home and the resulting home office expenses such as electricity charges and telecommunication charges are not reimbursed by your employer, you can claim these expenses that are incurred for work purposes as a deduction against your employment income for the year. As it may be difficult to calculate the exact amount of the running expenses that you have incurred as a result of working from home, IRAS is prepared to accept the following proxies:
- For electricity and telecommunication charges, you may compare the bills before and after working from home. For example, if the electricity charges before and after working from home is $50 and $60 respectively, the difference of $10 can be claimed as deduction, being expenses incurred for work purposes.
- For WiFi expenses, the monthly subscription fee can be claimed as a deduction only if the WiFi was set up to enable you to work from home. No deduction can be claimed if the WiFi was set up prior to working from home. One-time charges, such as installation or connection fees, also cannot be claimed as they are capital in nature.
- If there are more than one person working from home in the same household, IRAS is prepared to accept an equal apportionment basis for computing the amount of shared expenses applicable to each person.
Ms A was required to work from home from 1 Apr 2020 till 30 Jun 2020 and was the only person in the household working from home. The electricity charges for Mar 2020 to Jun 2020 based on actual usage, are as follows:
- Mar : $170 (base month)
- Apr : $210
- May: $220
- Jun : $250
The electricity charges that can be claimed as deductible expenses against Ms A’s employment income for the Year of Assessment 2021 is $170 which is arrived at as follows:
| Month | Amount Allowable ($) |
|---|
Apr | 40 (210 - 170) |
May | 50 (220 - 170) |
Jun | 80 (250 - 170) |
Total allowable | 170 |
Besides Ms A, Mr B, who is Ms A’s husband, also worked from home from 1 Apr 2020 to 30 Jun 2020. The amount of electricity charges incurred were the same as that in Example 1.
In this example, the amount of electricity charges Ms A and Mr B can claim as deduction against their employment income for the Year of Assessment 2021 is $85 ($170 / 2 persons) each.
Ms A was required to work from home from 1 Apr 2020 till 30 Jun 2020 and was the only person in the household working from home. A U-Save rebate was granted by the government to offset the utility bill for the month of May 2020. The electricity charges for Mar 2020 to Jun 2020 are as follows:
- Mar : $170 (base month)
- Apr : $210
- May: $110 (after deducting proportionate U-Save rebate*)
- Jun : $250
*U-Save rebate has to be apportioned across electricity, water and gas charges.
The electricity charges that can be claimed as deductible expenses against Ms A’s employment income for the Year of Assessment 2021 is $120, which is arrived at as follows:
| Month | Amount Allowable ($) |
|---|
Apr | 40 (210 - 170) |
May | Nil (110 - 170) |
Jun | 80 (250 - 170) |
Total allowable | 120 |
See:
Claiming Allowable Employment Expenses
You need to enter your employment expenses claim under the “Employment”
section in your Income Tax Return.
Keep Proper Records
You have to keep complete and proper records of all expenses incurred for 5 years. For example, expenses incurred in 2019 for YA 2020 must be kept and retained until 31 Dec 2024.
These records and accounts must be supported with invoices, receipts, vouchers and other relevant documents. You are only required to submit the supporting
documents upon IRAS’ request.
Please note that estimates and improper records are
not acceptable for tax declaration. For details, please refer to Keeping Proper Records .
Use the Employment Expenses Schedule
Download the Employment Expenses Schedule (XLS, 50 KB) to track and record the details of your employment expenses
claims. Remember to keep all invoices, receipts, vouchers, etc.
- Expenses incurred for social purposes and maintaining goodwill (e.g. entertainment expenses incurred on meals with colleagues)
- Expenses incurred for meeting potential clients
- Payment in lieu of notice paid to employers for failing to serve sufficient notice period before leaving a job
- Transport expenses incurred on your own private motor vehicle
- Travelling expenses incurred to and from home and office