The Supplementary Retirement Scheme (SRS) was established on 1st April 2001, to complement our Central Provident Fund (CPF) savings. While our CPF savings are often used for housing, education and medical payments, SRS is a tax-incentivised, voluntary form of savings strictly meant for retirement.
SRS is open to all Singaporeans, Singapore Permanent Residents (SPRs) and foreigners, who are at least 18 years of age, and not undischarged bankrupts or of unsound mind.
You can choose to stop the SRS contribution or make withdrawal from the SRS Account anytime. However, the intention of SRS is for long term savings and penalty is in place to discourage premature withdrawal from your SRS account. If you withdraw from your SRS account before the prevailing statutory retirement age, 100% of the withdrawal amount is taxable and there will be a penalty of 5%. However, if you withdraw from your SRS account on or after the prevailing statutory retirement age, only 50% of the amount drawn will be subject to tax. You may also spread your withdrawals over a period of up to 10 years, to meet your financial needs. Spreading out your withdrawals will generally result in greater tax savings.
An SRS account must first be opened with an approved bank. Every dollar that is voluntarily contributed in cash will result in the same amount of tax relief.
Yearly Maximum SRS Contribution by Singapore Citizens / SPRs
| Year | Absolute Income Base* | Yearly Maximum SRS Contribution |
| 2018 | (17 months x $6,000) = $102,000 | 15% of Absolute Income Base (15% x $102,000) = $15,300 |
Yearly Maximum SRS Contribution by Foreigners
| Year | Absolute Income Base* | Yearly Maximum SRS Contribution |
| 2018 | (17 months x $6,000) = $102,000 | 35% of Absolute Income base (35% x $102,000) = $35,700 |
*The Absolute Income Base is calculated on 17 months of the CPF monthly salary ceiling.
The amount must be contributed before December 31st for the Year of Assessment, in order to qualify for relief.
TAX BENEFIT ILLUSTRATION
Here’s a tax illustration of a Singaporean male, single, age 32, earning $5,000 a month and received 3 months bonus. He completed reservist training in the Year of Assessment 2018 and qualifies for the NS Man tax relief. In Scenario 1, he does not contribute to SRS.
In Scenario 2, it shows that he contributed $10,000 to his SRS account before 31st December 2018.
The income tax payable reduced by 41.92% from the contribution into his SRS account.
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