Supplementary Retirement Scheme (SRS) – What it means to a foreigner?

As a voluntary scheme to encourage individuals to save for retirement, the SRS has often been overlooked but regained popularity in the recent years. The opening of a SRS account, deemed as an addition on top of the compulsory CPF contributions, has therefore gained traction from foreigners as they are not qualified for the former unless they have gained a PR status here in Singapore. To sweeten the deal further, contributions to SRS are eligible for tax relief and investment returns are tax-free before withdrawal (only 50% of the withdrawals from SRS are taxable at retirement which in accordance with the Retirement and Re-employment Act ( RRA ), stands at 62 years as at today).

Every dollar deposited into your SRS account reduces your taxable income by a dollar. For example, if your annual assessable income is $100,000 and you contribute $10,000 to your SRS account, only $90,000 of your income will be subject to tax that year

So, as it is coined Tax Relief, an individual will then need to be a Tax Resident of Singapore.

How will a Foreigner be Considered a Tax Resident?

You must be a foreigner who has stayed/worked in Singapore (excluding director of a company) for 183 days or more in the previous year i.e. year before the YA.

Also important to note that non-Tax Residents are generally taxed at 15% of gross income or 22% of net income as long they are working professionals.

How Much Tax Will a Tax Resident Be Expected To Pay?

To Qualify for SRS

  • Be able to derive a form of income;
  • Be at least 18 years of age;
  • Not an undischarged bankrupt;
  • Not suffering from a mental disorder; and
  • Capable of managing yourself and your affairs.

To Open an Account

There are only 3 SRS operators in Singapore (important note: It is an offence to open SRS accounts with more than one operator and there are penalties for doing so.):

  • DBS Group Holdings Ltd
  • Overseas-Chinese Banking Corporation (OCBC) Ltd
  • United Overseas Bank (UOB) Ltd

It is also required of a foreigner to complete a declaration form for the account-opening.

Contribution Rates for Foreigners



Although you will be able to withdraw your SRS funds at any juncture, you will be slapped with a 5% penalty if you perform an early withdrawal before the stipulated retirement age. To ensure these funds remain in place and to serve their primary purpose in your retirement, you will also be taxed on whatever amount is withdrawn prematurely.

In summary, one must decide if setting aside a significant amount of money each financial year is a viable option without affecting your life plans. Tax relief can be tempting at first glance but greater temptation to withdraw funds prematurely, in the event of need or want, cannot be ignored.

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