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How to earn air miles from your income tax payment in Singapore (Feb 2024)

Credit Card Hacks: While IRAS doesn't offer credit cards as a direct payment method, they can still be used to settle tax payments and earn rewards. Here's how.

Graphical representations of income tax payment popping out from a laptop and calculator.
Cardholders can earn air miles when making income tax payments. (PHOTO: Getty) (NongAsimo via Getty Images)

SINGAPORE — Every year, many Singaporeans pay the mandatory income tax bill. Although the government recently announced a personal income tax rebate of 50 per cent for the Assessment Year 2024 as part of the Singapore Budget 2024, capped at S$200, there is no escaping this financial obligation.

While some may dread personal income tax payments, there may be a silver lining – the opportunity to earn air miles from tax payments.

In general, air miles are earned by spending with a rewards-based credit card. However, the Inland Revenue Authority of Singapore (IRAS) does not allow credit cards as an option to settle income tax payments. However, taxpayers can still use credit cards to settle their income tax payments and earn air miles. Read on to explore how this can be done.

Earning air miles from income tax in Singapore

Banks and third-party card payment providers offer tax payment facilities as an alternative method to pay income tax using credit cards. This allows cardholders to earn air miles or credit card rewards in exchange for an administrative fee.

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There are five banks in Singapore that offer income tax payment facilities: DBS, UOB, Standard Chartered, Citi and OCBC. Being a credit cardholder of one of these banks will enable the cardholder to make income tax payments using the credit card via the tax payment facilities. As for third-party providers, such as CardUp and ipaymy, taxpayers will first have to sign up for a free account before making income tax payments with credit cards.

Depending on which bank or third-party provider a taxpayer chooses, there are two methods of making income tax payments with a credit card.

The first method is an indirect settlement, where the bank credits the outstanding tax amount into the taxpayer's bank account, after which the taxpayer is responsible for settling the payment with IRAS. The credit card will be charged along with an admin fee before the money is credited into the taxpayer's bank account.

In the second method, the outstanding tax amount is settled directly on the taxpayer's behalf between the bank (or third-party provider) and IRAS. The taxpayer's credit card is charged along with an admin fee without the need for the taxpayer to take the additional step of settling the payment with IRAS thereafter. Third-party providers such as CardUp and ipaymy use this method of income tax settlement for their users. Additionally, banks such as Citi and Standard Chartered also offer direct tax settlement services with IRAS.

Are there any additional fees involved?

An administrative fee is charged for the use of a credit card to pay for an income tax bill. The fee rates for tax payment facilities differ for each bank and third-party provider. By opting to pay for income tax through a credit card in order to earn rewards or air miles, the cardholder is effectively buying air miles, and the admin fee is the cost.

Here is a quick glance at the different fee rates charged by tax payment facility providers (rates are up to date as of February 2024):

Payment Facility Provider

Fee

DBS

3.0%

Standard Chartered

1.6%

Standard Chartered EasyBill

1.9%

OCBC

1.9%

Citi

2.2%

UOB

1.7% - 2.2%

CardUp

1.5% - 2.6%

ipaymy

2.25%

What is the best air miles credit card to use for income tax in Singapore?

Ultimately, the best credit card to use for income tax payments is the one that gives cardholders the most air miles at the cheapest cost. This comes down to the cost per mile, which can be calculated with the simple formula of admin fee divided by the miles earned from a credit card.

The following table illustrates the different rates offered by credit card providers (rates are up to date as of February 2024):

Credit card

Method of payment

Fee

Miles per dollar (mpd)

Cost per mile

Citi PremierMiles Card

Citi PayAll

2.2%

1.2

1.83 cents

DBS Altitude Card

DBS

3.0%

1.5

2.00 cents

UOB PRVI Miles Card

UOB

2.0%

1.0

2.00 cents

OCBC Voyage Card

OCBC

1.9%

1.0

1.90 cents

Standard Chartered Visa Infinite Credit Card

Standard Chartered

1.6%

1.0

1.60 cents

It is worth noting that some banks apply different earn rates for tax payment facilities, usually resulting in a lower earn rate compared to what cardholders would earn on regular spending. This is where using a third-party provider such as ipaymy or CardUp can help maximise the earn rate when making tax payments, as it will allow cardholders to utilise the regular earn rates by considering the expense as local spend.

Cardholders will also earn miles on the admin fee charged by third-party providers, whereas banks do not give rewards for the payable admin fee on their tax payment facilities. Using this formula to calculate the cost per mile will reduce the cost per mile.

Taking the examples above, here's how using a third-party provider can lower the cost per mile:

Credit card

Method of payment

Fee

Miles per dollar

Cost per mile

UOB PRVI Miles Card

CardUp

2.6%

1.4

1.83 cents

OCBC Voyage Card

ipaymy

2.25%

1.3

1.71 cents

Standard Chartered Visa Infinite Credit Card

ipaymy

2.25%

1.4

1.58 cents

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