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A Guide to Mileage Reimbursements in Singapore

When you hire new employees in Singapore it will be necessary to understand how different types of benefits are handled.  Reimbursing employees for work-related mileage or transport expenses are fairly common, but Singapore has a very specific way of regulating this benefit.  It’s important to know the rules as they will affect the taxability of reimbursements for employees.

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Are mileage or commuting expense reimbursements taxable in Singapore?

There are two types of potential reimbursements in Singapore: mileage with a private vehicle or expenses using public transport.

Commuting Expenses

In general taxability of reimbursements to employees will depend on the reason for the expense.  For employees that are on official work business only, any transport expense reimbursement is non-taxable.  Shuttle bus services to and from work are also non-taxable, primarily due to the fact it is difficult to calculate the value to the employee.

On the other hand, reimbursing taxi fares to and from work is taxable to the employee, unless they are working overtime.  Fares to the airport are not taxable, nor are expenses to travel to a business venue (not the place of employment).  With the increase in home-based employees, it has been decided that the home is the ‘office’ and travel to other business venues is not taxable.

Private Cars

Using a personal vehicle is another matter when it comes to taxability of reimbursements, due to the fact there is mixed-use.  Any reimbursed private use mileage is taxable, but certain types of business use are non-taxable to the employee.  Examples of non-taxable reimbursement are, 1) mileage between office/home to external business venues, 2) between home and airport (overseas trips only) and 3) between home and office when working overtime.

Overtime

As mentioned most mileage or transport expense when working overtime is non-taxable, as long as it occurs outside of official work hours and days.  The policy must also be available to all staff.

Client Case: Mileage reimbursement rates in Singapore

One of our clients with employees in Singapore wants to know what the allowed mileage rate was for reimbursements.  We let them know that there is no prescribed rate for mileage reimbursement, and each company can make its own policy as long as it is reasonable.

Do you need more information about Singapore?

If you are new to hiring in Singapore, you might have other questions such as:

Are reimbursements run through payroll if they are non-taxable?

How are expenses handled related to an employer-provided vehicle?

Are pre-trip allowances still non-taxable for allowed expenses?

Answering these types of detailed questions is how we support our clients and ensure their compliance with foreign regulations.  We make international employment simple.

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The information in this article is subject to changes in local legislation.

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