March 23

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How to Claim Tax Relief for Mummies and Pay Minimal Income Tax

By Money Saving Daddy

income tax

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?

credits: iras

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 Kids Tax Rebate

$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 

Example: Income $150,000

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)
Remaining $52,350

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.

Example: Income $50,000

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!

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Money Saving Daddy

About the author

Hello Everyone! This is Don, sharing my journey here to find the most value buy. Not the cheapest, but making the best value of your dollar. :)

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