Per Diem Allowance in Singapore: Tax, CPF and GST on Business Travel Claims

Short answer: In Singapore, reimbursing an employee’s actual business travel costs is not taxable and does not attract CPF. A daily per diem allowance for an overseas trip is taxable only on the amount above IRAS’s published acceptable rate for that country. But CPF Board treats a lump-sum per diem allowance as wages, so CPF is still payable on it.

A travel policy touches four sets of rules: the employee’s income tax, CPF, the company’s tax deduction and GST. This guide explains how IRAS treats a per diem allowance for Singapore tax purposes, how that differs from reimbursements and fixed allowances, and what changes when staff drive their own cars, with a worked example and a policy checklist for SME owners and finance staff.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

How does Singapore tax a per diem allowance?

A per diem is a daily allowance for an overseas business trip, meant to cover meals, local transport and small costs such as laundry. All employment benefits are taxable unless exempt or covered by an IRAS concession, and IRAS treats a per diem as taxable unless it is subsistence in nature. To make this workable, IRAS publishes an acceptable daily rate for each country or region every year. Any amount up to that rate is not taxable. Any amount above it is taxable and must be reported.

The rates are published each December for the following calendar year and are not changed mid-year. They apply to Singapore-based employees on short business trips. Some 2026 figures:

The comparison is made trip by trip: a shortfall on one trip cannot offset an excess on another. IRAS accepts the number of trip days set by the employer’s HR policy, if it applies to all staff and does not exceed the length of the trip.

Overseas accommodation, airport transfers, travel between cities for business and business entertainment fall outside the per diem and are not taxable. If one lump sum also covers the hotel, the taxable amount is the lump sum less the acceptable rate and less these items. Warm clothing and luggage allowances are taxable; reimbursing those items at cost is not.

Are reimbursements of business travel expenses taxable?

No. Meals, laundry, telephone calls, accommodation, airport transfers and business entertainment reimbursed at actual cost are not taxable. A policy can combine both methods: the reimbursed part is not taxable, and only the per diem above the acceptable rate is. Travel insurance for the business period, and travel between home and the airport for a business trip, are also not taxable. Airport car park charges reimbursed to an employee who leaves their own car at the airport are taxable.

How are mileage claims and transport allowances treated?

Mileage reimbursement for business trips in an employee’s own car is not taxable for the employee, but the company cannot deduct it. A fixed transport allowance works the other way round: the employee is taxed on it, and the company can deduct it.

For the employee, IRAS treats mileage reimbursed for trips to clients, to external business venues, to the airport for an overseas business trip, and between home and office when working overtime as not taxable. Private mileage is taxable. There is no prescribed mileage rate, but the rate should be reasonable. Reimbursed ERP and car park charges for work trips are not taxable; a fixed ERP allowance is.

On the company’s side, section 15(1)(k) of the Income Tax Act 1947 disallows expenses, “whether directly or in the form of reimbursements”, on cars that carry up to 7 passengers (excluding the driver) and weigh no more than 3,000 kg unladen, subject to limited exceptions. IRAS’s business expenses guidance applies this to S-plated cars and to Q-plated and RU-plated business cars registered on or after 1 April 1998. So reimbursed mileage, petrol, parking and ERP for an employee’s private car are not deductible, even for business trips. A fixed transport allowance is deductible, and taxi and ride-hail fares for business remain deductible under the general rule in section 14(1) for expenses “wholly and exclusively incurred” in producing income. Our guide to deductible and non-deductible expenses under sections 14 and 15 covers this in more detail.

Do travel allowances and reimbursements attract CPF?

Allowances generally attract CPF; reimbursements of official expenses generally do not. This is where the per diem rules for tax and CPF part ways. CPF Board’s guidance says a per diem paid as a lump-sum allowance attracts CPF because it increases the employee’s wages. This applies even within IRAS’s acceptable rate. A per diem paid as a reimbursement of official expenses does not attract CPF, provided the employer can prove the expenses were official and the amount does not exceed what was spent. The same split applies elsewhere:

• Transport subsidies paid to employees attract CPF. Reimbursements for travel in the line of official duty do not.
• Cash given for an employee’s personal car costs (petrol, parking, ERP, road tax, insurance, repairs) attracts CPF.
• Winter wear and luggage allowances attract CPF. Reimbursements of those items for official overseas trips do not.
• Reimbursed client entertainment does not attract CPF.

For more on what counts as wages, see our Singapore payroll and CPF guide for employers.

Where do taxable travel payments go in Form IR8A?

Taxable travel allowances go in Form IR8A under item d) 1, Allowances. IRAS’s explanatory notes list “per diem in excess of IRAS acceptable rates” as a taxable allowance; a per diem within the rate is not reported.

Appendix 8A is for benefits-in-kind, such as a company car also used privately. Appendix 8B covers employee share plan gains, so it is rarely relevant to travel. For 2026 income, the forms must reach employees, or IRAS under the Auto-Inclusion Scheme (AIS), by 1 March 2027. See our guides to the IR8A and the Auto-Inclusion Scheme and to Appendix 8A benefits.

Can the company claim GST on travel expenses?

Only on GST actually charged in Singapore, and only where the input tax conditions are met. GST at 9% applies to supplies in Singapore and imports of goods, so an overseas hotel, meal or taxi carries no Singapore GST to claim.

For local business travel, GST on a ride-hail or limousine trip (a point-to-point chauffeured private hire service) can be claimed from 1 April 2022 if there is a valid tax invoice. GST on the running costs of motor cars used by the company or its employees is disallowed under regulation 27 of the GST (General) Regulations. Regulation 26 also blocks GST on benefits for employees’ family members, club subscription fees, and most staff medical expenses and medical insurance.

Where a receipt is in the employee’s name, IRAS allows the claim only if the employee acted as the company’s agent, shown by evidence of reimbursement and booking the bill as a business expense. Read more in what you can and cannot claim as input tax.

What is the tax, CPF and GST treatment of each travel item?

How does this work on a real trip? A five-day Tokyo example

The figures below are hypothetical. Mei, a sales manager at a Singapore Pte Ltd, flies to Tokyo for five days in March 2026. Under the company’s policy she receives a flat per diem of S$180 a day, so S$900 in total. Her hotel bill of S$1,400 is reimbursed against the receipt. She drives her own car to Changi, parks it there, and claims 40 km of mileage at the company’s rate plus S$60 for airport parking.

1. Per diem: the 2026 rate for Japan is S$155. The excess is S$25 a day, or S$125 for the trip. The S$125 goes into IR8A item d) 1. The other S$775 is not taxable.
2. CPF: because the per diem is a flat allowance, the full S$900 is treated as wages for CPF.
3. Hotel: S$1,400 reimbursed at cost is not taxable, attracts no CPF and is deductible for the company. It carries no Singapore GST.
4. Mileage to the airport: not taxable for Mei, but not deductible for the company because it relates to a private car.
5. Airport parking: S$60 is taxable for Mei and not deductible for the company.

Capping the per diem at S$155 a day would remove the taxable excess, but CPF would still apply to the flat S$775. Reimbursing meals at cost instead would take them outside both tax and CPF, and a ride-hail to Changi would be deductible for the company.

What should your travel claims policy include?

1. Decide, for each cost type, whether you pay a per diem, reimburse receipts, or combine the two.
2. Benchmark per diems to IRAS acceptable rates, review them each December, and define how trip days are counted.
3. Treat flat per diems and allowances as wages in payroll for CPF.
4. Require receipts and a business purpose for every reimbursement, and never reimburse more than was spent.
5. For mileage, set a reasonable rate, keep a trip log, and record mileage as a non-deductible expense in the tax computation.
6. Exclude family members’ costs and personal holiday days, as overseas holiday benefits are taxable.
7. Tag each taxable excess in payroll so it reaches Form IR8A by 1 March.
8. Record staff-paid bills as business expenses and keep reimbursement evidence before claiming GST.

Our free tools can help with related payroll and tax estimates. If your business sponsors foreign staff who travel, Little Big Employment Agency handles the work pass side.

Frequently asked questions

Is a per diem within the IRAS rate free of CPF?

No, if it is paid as a lump-sum allowance. CPF Board treats it as wages. Only per diem reimbursements of actual official expenses are outside CPF.

What if we pay per diem in foreign currency?

IRAS allows you to use your in-house exchange rate. If you do not have one, use rates from local banks, local newspapers or reputable news agencies, and use the same source every time.

Does a foreign employee visiting Singapore get the same treatment?

IRAS applies the same approach to per diems paid to employees travelling into Singapore on business. Separately, a short-term visitor who works in Singapore for 60 days or less in a year is generally exempt from tax on that employment income here.

Last reviewed: 19 October 2026. The Editorial Team, Raffles Corporate Services.