Supplementary Retirement Scheme (SRS)
The Supplementary Retirement Scheme (SRS) is:
§ a voluntary scheme that offers attractive tax benefits.
§ SRS account can be started with from just S$100
§ Maximum contribution to SRS per year for Singaporeans is $11,475
§ Contributions to SRS are eligible for tax relief.
§ Only 50% of the withdrawals from SRS are taxable at retirement.
§ Withdrawal from SRS account can be made over a maximum of 10 years (starting from statutory retirement age) to obtain even more tax savings.
§ SRS account can be used for selected investments to obtain higher returns
§ Reduce Tax and Invest at the same time.
Example 1:
| | No SRS Contribution | With SRS Contribution |
| Earned Income Less All Relief(s) | $80,000 | $80,000 |
| CPF Contribution1 | $10,800 | $10,800 |
| SRS Contribution | - | $11,475 |
| Taxable Income | $69,200 | $57,725 |
| Total Tax Payable2 | $3,382 | $2,407 |
| Tax Savings | - | $975 |
| Tax Savings Over 20 Years | - | $19,500 |
| Potential returns from SRS investments over 20 years3 | - | $470,423 |
Example 2:
| | No SRS Contribution | With SRS Contribution |
| Earned Income Less All Relief(s) | $100,000 | $100,000 |
| CPF Contribution1 | $10,800 | $10,800 |
| SRS Contribution | - | $11,475 |
| Taxable Income | $89,200 | $77,725 |
| Total Tax Payable2 | $5,588 | $4,107 |
| Tax Savings | - | $1,481 |
| Tax Savings over 20 years | - | $29,620 |
| Potential returns from SRS investments over 20 years3 | | $470,723 |
1. Based on existing income ceiling of S$4,500 per month
2. Based on existing tax rates for individuals below 55 years for Year of Assessment 2007
3. Funds returns estimated on 7% p.a.
Examples above are for illustrations only.
Calculations for fund returns are done using a financial calculator. If you would like to know how much tax benefit you can enjoy, feel free to let me know, I will do the calculations for you.
Year of Assessment 2007
| Chargeable Income | Rate (%) | Gross Tax Payable ($) |
| First $20,000 | 0 | 0 |
| First $30,000 | - | 350 |
| First $40,000 | - | 900 |
| First $80,000 | - | 4,300 |
| First $160,000 | - | 15,500 |
| First $320,000 | - | 42,700 |
SRS Contribution cap = SRS contribution rate x Absolute Income base
Contribution rate:
- Singaporean/SPR -> 15%
- Foreigner -> 35%
Based on YA2007 and onwards
Maximum SRS contribution for Singaporean/SPR is $11,475
Maximum SRS contributions for Foreigners is $26,775
Pls note that all contributions have to be made before 31st Dec each year.
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