How Singapore Working Mothers Pay Less Tax Thanks to Child Relief
Did you know there’s a personal tax relief programme in Singapore that is specifically designed for benefits of working mothers? That’s right. If you’re a mother who is employed and already paying tax, you’ll want to know more about the Working Mother’s Child Relief (WMCR) and how it can benefit you.
For those mothers who don't have an accounting services company in Singapore handling their taxes, we explain the thing in general terms.
Who qualifies for the benefits of WMCR?
According to the Inland Revenue Authority of Singapore (IRAS), you need to fulfil the following criteria to qualify to receive the benefits of WMCR
Be a working mother who is:
- Married
- Single
- Widowed
Earn a taxable income through:
- A pension
- Employment (vocation / profession)
- Trade / business
Have a child who:
- Is a citizen of Singapore
- Was born to you and your spouse/ex-spouse, is a step-child, or legally adopted
- Meets all other conditions in terms of the Handicapped Child Relief (HCR) or Qualifying Child Relief (QCR) Iras outlined.
You can also visit the official lRAS site if you’re after a bit more detail about qualifying for WMCR.
How much tax relief can be claimed through WMCR?
The amount of tax relief you can claim is determined by your child order. That means that you can claim a percentage of your annual earned income for every child you have. For example, if you have 3 kids, WMCR could reduce your chargeable income by 60%. Isn’t that a great incentive to stay in the workforce?
Take a look below to understand how the child order percentages apply, but remember that these tax percentages have a maximum cap of 100% of your taxable income.
Note that there will be a personal income tax relief cap of S$80,000, which will apply from the Year of Assessment (YA) 2018.
| First child | 15% of your earned income |
| Second child | 20% of your earned income |
| Third child | 25% of your earned income |
| All children thereafter | 25% of your earned income |
Can I claim other reliefs on the same child?
Married couples or families may be eligible for other tax relief benefits or child-related rebates. It’s important to know that Handicaped Child Relief or Qualifying Child Relief will be allowed first, ahead of Working Mother’s Child Relief. When it comes to all three tax reliefs, there is a cumulative cap of S$50,000 per child. So if you’re a working mother, be aware that regardless of which parent claims Qualifying Child Relief or Handicaped Child Relief, the Working Mother’s Child Relief amount claimable is limited to the balance remaining. Here are some examples of how this works:
Sharing Handicapped Child Relief (HCR)
The cap for this relief is S$7,500 and parents can agree to split that amount — so mum and dad can choose to claim S$3,000 and S$4,500 respectively. The amount of Working Mother’s Child Relief that mum can claim will have the amount of S$3,000 deducted.
Sharing Qualifying Child Relief (QCR)
As stated by IRAS, child relief here is S$4,000, which can also be shared between parents. So if they split it S$2,000 and S$2,000, then Working Mother’s Child Relief will have S$2,000 deducted.
If you’re planning on claiming child-related tax relief for the first time, don’t forget to update your details when you’re filing your taxes on the myTax Portal. If you’ve done it previously, you don’t need to worry as this part of your tax form will be auto-filled.
Looking for a bit more detail? Visit the IRAS website for more info about different tax reliefs for parents in Singapore.
