Understand the types 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. Allowable employment expenses may be deducted from your employment income.

    Allowable expenses

    Allowable employment expenses must satisfy all the following conditions:

    1. Incurred while carrying out your official duties;
    2. Not reimbursed by your employer; and
    3. Not capital or private in nature.

    Examples of allowable expenses

    • Entertainment expenses incurred in entertaining clients. Your share of the entertainment (e.g. meal) expenses must be excluded from the claim
    • 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

    Examples of wrongful claims

    • 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

    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 may 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:

    • 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.
    • WiFi expenses: The monthly subscription fee may 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.

    Learn more about working from home expenses:

    Example 1: How to calculate the working from home expenses

    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 may be claimed as deductible expenses against Ms A’s employment income for the Year of Assessment 2021 is $170:

    MonthAmount allowable ($)
    Apr40 (210 - 170)
    May50 (220 - 170)
    Jun80 (250 - 170)
    Total allowable expenses170

    Example 2: How to apportion the working from home expenses

    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 may claim as deduction against their employment income for the Year of Assessment 2021 is $85 ($170 / 2 persons) each.

    Example 3: How to calculate the working from home expenses with rebates

    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 may be claimed as deductible expenses against Ms A’s employment income for the Year of Assessment 2021 is $120:

    MonthAmount allowable ($)
    Apr40 (210 - 170)
    MayNil (110 - 170)
    Jun80 (250 - 170)
    Total allowable expenses120

    Claiming allowable employment expenses

    You should 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 2020 for Year of Assessment 2021 must be kept and retained until 31 Dec 2025.

    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.

     

    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.

    FAQs

    I have breached my employment contract and I was ordered to pay back the company the income that I earned. Why am I still being taxed on the income that I paid back to the company?

    Employment income and payback to the company for breach of employment contract are 2 separate types of payment.

    The employment income you received was for your services rendered to the company and is therefore taxable.

    The amount paid back to your company was compensation for breaching your employment contract. This payment is a personal expense that does not qualify for tax deduction.

    Can I claim for expenses on support fees paid to the Employability & Employment Centre (E2C) programme?

    You may claim the support fees as an employment expense if you were on the E2C programme prior to your employment and were employed by this employer through the programme.