Do you know Mummies can have a lot tax savings if you have many kids?
With the income Tax season coming. Many Singaporeans will kaopeh this period as this is the period when ah gong going take back your chicken wing and drumstick.
If you have not file your income tax, these are the dates to remember
- 15 April 2021 - Paper Filing
- 18 April 2021 - E-Filing
Please hor, if you have not file, remember to do it by these dates. If not, your chicken backside also kena summon.
So back to the main topic, what are the types of Tax Rebate Relief for Singapore Parents?
Ah Gong always say, want to encourage more babies in Singapore. Hence, the tax relief or rebate for Singapore Parents must be substantial mah.
So before I go on.
Let me ask you if you know what is the difference between Tax Rebate and Tax Relief?
So let's say your assessable income is $110,000
Tax Relief
If you have tax relief of $10,000.
Your assessable income will be $100,000.
Tax Rebate
So for example, your assessable income after the tax relief is $100,000.
You have a kid, which entitle you to $5000 tax rebate.
At $100,000 income, your income tax will be $5,650.
Minus $5000 Tax rebate.
This year you pay $650 only.
Can understand hor?
Tax Savings for Parents
There are 2 kinds of tax savings for Parents (Daddies and Mummies)
Parenthood Tax Rebate
So tax rebate will minus the amount of income tax payable.
The amount of rebate is as follows:
Child Order | PTR Allowable |
---|---|
1st Child | $5,000 |
2nd Child | $10,000 |
3rd Child onwards | $20,000 per child |
So if you have 5 kids, how much parenthood Tax rebate do you have?
$5,000 + $10,000 + $20,000 + $20,000 + $20,000 = $75,000
Parents need to discuss on this rebate and how to split among yourself.
By right, the one that got to pay more tax should get more lah. But left, up to you to discuss lah.
Qualifying Child Relief (QCR)
This one you can split with your spouse one.
$2,000 daddy, $2,000 mummy.
You want to split $4,000 daddy, $0 for mummy also can.
This one need to manual edit in your income tax submission.
Tax Savings |
---|
$4,000 per child |
Mummy Only Tax Savings
Ah gong also have more incentives for mummies. To encourage them to go back to work, so that it won't be so xiong on the monthly household expenses.
So in order to encourage them, there is more tax savings for mummies only.
Working Mother's Child Relief (WMCR)
Child Order | Tax Relief |
---|---|
1st Child | 15% |
2nd Child | 20% |
3rd Child onwards | 25% each child |
Total CAP for WMCR is $50,000 per child.
But hor, total tax relief is capped at $80,000 per person.
This is tax relief / savings is auto calculated in your income tax form. So you no need headache too much.
Foreign Domestic Worker Levy Relief
Claim twice the amount of your helper levy. Usually a helper levy is $60 a month if you have kids or elderly at home.
So you can claim $1,440 if her levy is $720.
Levy | Tax Savings |
---|---|
$60 x 12 = $720 | $1440 |
Grandparent Caregiver Relief (GCR)
This is also to encourage mummies to go back to work and if you have grandma grandpa to help you take care of kids. You get $3,000.
Tax Savings |
---|
$3,000 |
Mummy earns a income of $150,000 and she has 4 kids.
Employment Income | $150,000 |
Less: Personal Relief | |
- Qualifying Child Relief | $16,000 ($4,000 x 4) |
- Working Mother Child Relief 1st Kid | $22,500 (15% x $150,000) |
- WMCR 2nd Kid | $30,000 (20% x $150,000) |
- WMCR 3rd Kid | $37,500 (25% x $150,000) |
- WMCR 4th Kid | $37,500 (25% x $150,000) |
- Foreign Domestic Worker Levy Relief | $1,440 ($60 x 12 x 2) |
- NSman Wife Relief | $750 |
- CPF Relief | $25,500 |
Total Personal Relief | $171,190 |
Personal Relief Capped | $80,000 |
Chargeable Income | $70,000 ($150,000 - $80,000) |
Gross Tax Payable | $2,650 |
Less: Parenthood Tax Rebate | $2,650 ($5,000 + $10,000 + $20,000 + $20,000) |
Net Tax Payable | $0 with Remaining $52,350 Tax Rebate |
As you can see, her personal reliefs comes up to $170,000. And total relief is capped at $80,000.
So you wasted $90,000 on your tax relief.
The wise way to do it is to transfer the QCR to your husband, so that he gets $16,000 of tax relief based on 4 kids.
Mummy earns a income of $150,000 and she has 4 kids.
Employment Income | $50,000 |
Less: Personal Relief | |
- Qualifying Child Relief | $16,000 ($4,000 x 4) |
- Working Mother Child Relief 1st Kid | $7,500 (15% x $150,000) |
- WMCR 2nd Kid | $10,000 (20% x $50,000) |
- WMCR 3rd Kid | $12,500 (25% x $50,000) |
- WMCR 4th Kid | $12,500 (25% x $50,000) |
- Foreign Domestic Worker Levy Relief | $1,440 ($60 x 12 x 2) |
- NSman Wife Relief | $750 |
- CPF Relief | $8,500 |
Total Personal Relief | $51,750 |
Personal Relief Capped | $80,000 |
Chargeable Income | $0 ($50,000 - $51,750) |
Gross Tax Payable | $0 |
Less: Parenthood Tax Rebate | $0 |
Net Tax Payable | $0 with Remaining $55,000 Tax Rebate |
The WMCR already relief $42,500 liao.
The QCR you transfer to your husband to lower his chargeable income also. So at least $16,000 is minus away.
PTR can also transfer him.
So as long your chargeable income less than $20,000. That year you no need pay tax.
Even if need to pay, you still have your PTR rebate to offset.
Please Remember!
So remember to go through your tax relief page and see which relief you want to claim.
Because sometimes you forget to claim, then you pay abit more tax.
If you have any questions, do let us know in the comments.
Will love to help!