This page provides a comprehensive understanding of tax treatment on relocation benefits. It covers cash allowances, reimbursements, deductible and non-deductible relocation expenses, and home leave passages.

Components of relocation benefits

1. Cash allowances – provided to assist with the costs of relocating to another country.

2. Reimbursements – provided to cover the expenses related to the relocation.


Taxation of cash allowances

You need to pay tax on the full amount of cash allowances given to cover relocation expenses, whether or not you have incurred the expenses.

Claiming relocation expenses

You can deduct relocation expenses incurred as an employment expense against your employment income.

If the relocation expenses claimed is less than the cash allowance given, the excess amount of cash allowance is taxable.

If the relocation expenses claimed is more than the cash allowance given, the excess claim will be disregarded and cannot be used to deduct against other income.

Find out more about claiming relocation expenses in your income tax return and keeping proper records.

Types of relocation expenses

a. Deductible relocation expenses

  1. Cost of airfare for you, your family, and pets to travel to the country.
  2. Freight and storage charges for moving personal belongings.
  3. Cost of temporary accommodation before commencing employment (e.g. hotel or serviced apartment).
  4. Settling-in expenses (e.g. initial bedding, kitchen appliances, broadband subscription, and expatriate immersion program enrolment).

b. Non-deductible relocation expenses

  1. Personal expenses such as payments for meals, laundry, and transport.
  2. Recurrent expenses after the initial settling-in period (e.g. ongoing storage costs incurred for storing your personal effects during the period of employment in Singapore).

Taxation of relocation reimbursements

When your employer reimburses you for moving expenses, it is usually not taxed. This is because it is meant to cover costs and does not directly benefit you personally; it is more for the company's benefit.

Reimbursement for personal expenses

However, if your employer reimburses you for personal expenses related to work, that amount is taxable. This differs from relocation reimbursements.

Similarly, if your employer reimburses you for losses from selling personal belongings during the move, that amount is taxable. This is because it is related to your job, and you benefit personally by being compensated for the loss.

Taxation of home leave passages

Home leave passage refers to air passage provided by employer for the employees to visit their home countries.

Starting from YA 2018, home leave passages provided to expatriate employees, their spouses, and children are fully taxable.

One-time cash payment for returning home

If the company provides a single lump sum of cash for your trip back home, you need to pay tax on the entire amount (100%).

Leave passages on first appointment and termination of employment

Leave passages provided to a foreigner and his family when taking up his first appointment in Singapore, or upon leaving after employment termination, are not taxable.