Key changes announced for individuals
Change in method of calculating WMCR
WMCR can be a significant relief for qualifying female taxpayers, especially so for higher income earners given the calculation used to be based on a percentage of their earned income. The change will benefit the lower-middle income earners in line with the government’s efforts to support and encourage them to remain in the workforce.
WMCR would impact more of the local workforce, as a condition to claim this is that the child needs to be a Singapore Citizen. Therefore, this may impact outbound assignees more as it could significantly impact the level of hypothetical taxes due whilst on an overseas assignment.
Overall, higher income earners will feel a rather substantial reduction in the reliefs claimable, and this appears to be in linewith the government’s efforts to create a more progressive tax system.
Updated conditions to GCR claim
FDWLR is a relief that expatriates can enjoy on the levies paid and the lapse of this will see one less relief applicable forexpatriates. However, given the quantum of relief, this may not be a significant impact to the expat population.
CPF is only applicable to Singapore Citizens and Singapore Permanent Residents. However, changes may impact the cost of expat packages where employers will provide the equivalent of CPF in a cash allowance or otherwise to ensure that employees on work passes are no worse off than locals (i.e., losing out on employer CPF). This is because CPF contributions are made into the individual’s own CPF account rather than to a state-run social security system.
Employers should revisit their payroll calculations and alsobe aware of the adjustments to the Annual Wage cap as a result of the first change implemented in September 2023.
This will increase the overall cost of hiring for employers and reduce the take-home-pay for employees, especially those earning greater than S$6,000. The staggered increments should allow all to manage the changes.
For outbound assignees, it will have an impact where hypo or actual CPF contributions continue in Singapore. This is a consideration for both the employee and the employer (where actual CPF contributions are made.)
CPF Central Provident Fund
FDWLR Foreign Domestic Worker Levy Tax Relief
GCR Grandparent Caregiver Relief
PCTS Platform Workers CPF Transition Support
WMCR Working Mother Child Relief
YA Year of assessment
To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.