A director-shareholder who is a Singapore tax resident can claim the same personal reliefs as any other resident, but how you are paid decides which reliefs actually work. CPF relief only follows compulsory CPF on salary, so director’s fees and dividends earn none. One-tier dividends are not taxable, so they give your reliefs nothing to reduce. All reliefs together are capped at S$80,000 for each Year of Assessment (YA), and anything above the cap is simply disregarded. Plan your salary, SRS and CPF top-ups with both points in mind.
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.
Which reliefs can a director-shareholder claim?
Reliefs are only available to tax residents. Being a director, a shareholder or both does not change the list. What changes is whether you have the kind of income each relief depends on. IRAS lists the reliefs for YA 2026 on its tax reliefs page. The ones owner-managers most often use are below.
| Relief | Amount for YA 2026 | What it depends on |
|---|---|---|
| Earned Income Relief | S$1,000 below age 55, S$6,000 at 55 to 59, S$8,000 at 60 and above, capped at your earned income | Taxable income from employment, pension or a trade or business. Director’s fees and salary both qualify |
| CPF Relief for employees | Your compulsory employee CPF contributions, within the CPF wage ceilings | Salary under a contract of service, for citizens and PRs |
| SRS Relief | Actual contributions, up to S$15,300 (citizens and PRs) or S$35,700 (foreigners) | Contributions made by 31 December of the income year |
| CPF Cash Top-up Relief | Up to S$8,000 for yourself and up to S$8,000 for family members | Cash top-ups to CPF under the Retirement Sum Topping-Up Scheme by 31 December |
| Parent Relief | S$9,000 per parent if you live together, S$5,500 if not | Parent’s 2025 income not more than S$8,000; at least S$2,000 support if living apart |
| Life Insurance Relief | Lower of S$5,000 less your CPF contributions, or 7% of the insured value (or premiums if lower) | Only if your total CPF contributions for the year were under S$5,000 |
| Family reliefs (spouse, child, working mother’s child), NSman reliefs | Fixed amounts set by IRAS | Your personal circumstances, not your pay structure |
Two reliefs that some owners still expect have gone. Foreign Domestic Worker Levy Relief lapsed from YA 2025 and Course Fees Relief lapsed from YA 2026, according to IRAS.
How does the S$80,000 relief cap work?
Since YA 2018, IRAS has applied a personal income tax relief cap of S$80,000 to the total of all reliefs you claim in a YA. It covers every relief, including CPF relief, SRS relief and CPF cash top-up relief. IRAS says the balance above the cap is disregarded and cannot be transferred, for example to a spouse.
The cap does not stop you contributing. It stops the tax benefit. If your reliefs already add up to S$80,000, a further SRS contribution or cash top-up gives no tax saving that year, and IRAS states that SRS and voluntary CPF contributions are not refunded. Any later benefit comes only from the money being in the SRS or CPF account.
The cap is a ceiling on reliefs, not on income. It matters most to owners who pay themselves a substantial salary, contribute to SRS, top up CPF for themselves and their parents, and also claim child reliefs. For many owners with modest salaries, the real limit is not the cap but the size of their taxable income.
Why salary, director’s fees and dividends give different reliefs
The comparison of pay routes is covered in our guide to director fees vs salary vs dividends. For reliefs specifically, the differences are these.
- Salary. Where you are a Singapore citizen or PR employed under a contract of service, CPF is payable on the salary. Your compulsory employee share is what IRAS gives as CPF relief. IRAS caps it by the ordinary wage ceiling (S$7,400 a month in 2025 and S$8,000 a month from 1 January 2026) and the additional wage ceiling, and voluntary contributions above the compulsory amount do not count.
- Director’s fees. The CPF Board says CPF is not payable on fees voted to directors at general meetings. The fees are still taxable employment income, so they support Earned Income Relief, but they give no CPF relief. Because there is no CPF, Life Insurance Relief may become available.
- Dividends. IRAS confirms that dividends paid by a Singapore resident company under the one-tier system are not taxable in the shareholder’s hands. They are not earned income and attract no CPF. Taking most of your income as dividends therefore reduces both your taxable income and the reliefs that can be used against it.
Reliefs reduce income that would otherwise be taxed. They do not create a refund, and IRAS says relief above the cap cannot be transferred. If your taxable income is small, reliefs beyond what is needed to bring it into the 0% band are of no use that year.
Example: the same owner on two pay structures
Example: Daniel, 45, a Singapore citizen, owns all the shares of his trading company and is its only director. He lives with both parents, whose incomes are below S$8,000 each. He is looking at his 2025 pay, which is assessed in YA 2026. These figures are a simplified illustration, not a tax computation.
Structure A: salary of S$7,400 a month (S$88,800 for 2025). His employee CPF at 20% is S$1,480 a month, or S$17,760 for the year.
| Relief | Structure A (salary) | Structure B (small salary plus dividends) |
|---|---|---|
| Earned Income Relief | S$1,000 | S$1,000 |
| CPF Relief | S$17,760 | S$4,800 |
| SRS Relief (S$15,300 contributed) | S$15,300 | Not needed |
| CPF cash top-ups for self and parents | S$16,000 | Not needed |
| Parent Relief (two parents living with him) | S$18,000 | S$18,000 available, mostly unused |
| Total reliefs claimed | S$68,060 | Limited by income |
| Headroom under the S$80,000 cap | S$11,940 | Not relevant |
Under Structure A, Daniel’s reliefs reduce his S$88,800 of assessable income to S$20,740 of chargeable income, most of which falls in the 0% band. If he also had children and claimed child-related reliefs, he could reach the cap, and further SRS contributions would not reduce his tax.
Structure B: salary of S$2,000 a month (S$24,000) with the rest paid as dividends. His employee CPF is S$4,800. Earned Income Relief and CPF relief alone bring his S$24,000 down to S$18,200, inside the 0% band for the first S$20,000 of chargeable income. Parent Relief, an SRS contribution or a cash top-up would save no tax that year. The dividends are not taxed, but the company has paid corporate tax on the profits behind them, and Daniel’s CPF savings are much lower. Because his CPF was under S$5,000, he could also claim Life Insurance Relief, but only up to S$200.
Neither structure is right for everyone. The point is that the reliefs a family relies on only work if there is enough taxable income for them to reduce.
Steps to plan reliefs before 31 December
- Confirm your residence status. Reliefs are for tax residents. A foreign founder on an Employment Pass needs to meet the residence test for the year before any relief is available.
- Fix the year’s salary and director’s fees. Record salary in an employment contract and board resolution, and have director’s fees approved by shareholders. Our guide to paying yourself efficiently covers the documents.
- Estimate your assessable income. Add salary, director’s fees and any other taxable income. Leave out one-tier dividends.
- List the reliefs you already qualify for. Earned Income Relief, CPF relief, parent and family reliefs, and NSman relief are claimed or granted on facts you cannot change late in the year.
- Compare the total with your income and the S$80,000 cap. If you are close to either limit, a further SRS contribution or cash top-up may not save tax.
- Make SRS contributions and CPF cash top-ups by 31 December. IRAS gives the relief in the following YA, and your SRS operator or CPF Board may set an earlier cut-off.
- Check the pre-filled return. When filing opens, check that CPF relief, SRS relief and cash top-up relief appear correctly before you submit.
Documents to keep
- Employment contract and board resolution fixing your salary
- Shareholder approval of director’s fees
- Form IR8A issued by the company for the year
- CPF contribution records for your salary
- SRS and CPF cash top-up statements
- Evidence supporting parent relief where you live apart, such as records of support payments
- Dividend resolutions and vouchers, kept with the company’s dividend records
Frequently asked questions
Do I get CPF relief on director’s fees?
No. The CPF Board says CPF is not payable on director’s fees voted at general meetings, so there is no compulsory contribution for IRAS to relieve. CPF relief comes only from compulsory CPF on salary under a contract of service.
Can I carry unused reliefs to next year?
IRAS says the balance of reliefs above the S$80,000 cap is disregarded and cannot be transferred. Reliefs are worked out year by year, so plan each year separately.
Can my company make my SRS contribution for me?
IRAS says SRS relief is based on actual contributions made by you or your employer. If the company contributes, treat it as part of your remuneration in payroll and check its tax and IR8A treatment before the contribution is made. Either way, the relief counts towards the S$80,000 cap.
I am a foreign director on an Employment Pass. Do these reliefs apply?
Only if you are a tax resident for the YA. CPF relief does not apply because foreigners on work passes do not contribute to CPF, but Earned Income Relief and SRS relief at the foreigner limit can. Non-residents get no personal reliefs. See our personal income tax guide for 2026.
Is it worth topping up my parents’ CPF if I mainly take dividends?
The top-up still benefits your parents’ retirement savings, but the tax relief only helps if you have enough taxable income to absorb it, and it counts towards the S$80,000 cap. Work out your income first.
Need help planning your pay and personal reliefs?
If you want to review how your company pays you before the year ends, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133. We can run your payroll and CPF, prepare the board and shareholder resolutions for salary, director’s fees and dividends, issue Form IR8A, and model your personal tax position alongside the company’s corporate tax. This article is general information, not tax advice.
Kevin Yeo, Raffles Corporate Services