Director's Remuneration in Singapore 2026: Fees vs Salary, Tax, CPF & Legal Guide

How a Singapore company pays its directors matters for tax, CPF, and corporate law. The two main forms — director's fees and director's salary — are treated differently for tax timing, CPF liability, and shareholder approval. This 2026 guide covers the practical mechanics for both resident and non-resident directors, including the current 24% top marginal tax rate and the enhanced 400% Enterprise Innovation Scheme deduction.

The Two Forms of Director's Remuneration

Singapore companies typically compensate directors through two distinct payment types. Understanding the difference is essential — they are treated differently for tax, CPF contributions, and shareholder approval.

Director's Fees

Paid to a director for holding the office of director — attending board meetings, exercising fiduciary duties, and overseeing strategy
Approved by shareholders at the Annual General Meeting (or via written resolution)
Not tied to any specific employment role
Subject to income tax; not subject to CPF contributions

Director's Salary

Paid to a director who also serves as an employee of the company (e.g., CEO, Managing Director, or any executive role)
Compensates for day-to-day executive work, not for holding the director's office
Approved by the Board of Directors (typically documented in the employment contract)
Subject to income tax; subject to CPF contributions if the director is a Singapore citizen or PR

Companies can pay a director both — a salary for executive work and fees for board service. This is common for founder-directors of Singapore SMEs.

Other Forms of Director Remuneration

Beyond fees and salary, companies may also compensate directors through:

Bonuses — Performance-based payments, typically added to a base salary
Shares and share options — Equity compensation, common in startups (see share allocation guide)
Benefits-in-kind — Medical insurance, car allowances, housing, club memberships (see Singapore tax treatment of employee benefits)
Compensation for loss of office — Termination payments (special approval rules apply — see below)

Tax Treatment — Resident Directors

A Singapore tax resident director — Singapore citizen, PR, or foreigner who has spent 183+ days in Singapore in the calendar year — is taxed on director's fees and salary at Singapore's progressive personal income tax rates ranging from 0% to 24%.

Key rates for YA2026:

0% on the first S$20,000 of chargeable income
22% on chargeable income between S$320,001 and S$500,000
23% on chargeable income between S$500,001 and S$1,000,000
24% on chargeable income above S$1,000,000

The 23% and 24% top brackets took effect from YA2024 onwards (previously the top rate was 22%). For the full personal income tax table, see our personal income tax guide.

Timing of taxation for director's fees: Fees are taxable when the director's services have been rendered for the relevant accounting period, not when declared. Fees decided at an AGM held in advance for services yet to be rendered are taxable when the services are subsequently rendered.

Tax Treatment — Non-Resident Directors

Non-resident directors (typically foreign directors who spend fewer than 183 days in Singapore) are subject to a flat 24% withholding tax on director's fees, with no personal reliefs available. This rate applies from YA2024 onwards (raised from 22% previously).

How it works in practice:

The Singapore company withholds 24% from the fee payment
The company remits the withheld tax to IRAS
The director does not need to file a Singapore personal tax return for these fees

Double Tax Agreement (DTA) relief: If the director's country of residence has a DTA with Singapore, the withholding rate may be reduced — typically to 8–15%, depending on the specific treaty. To claim DTA relief, the director must provide a Certificate of Residence from their home country's tax authority.

Singapore has DTAs with over 90 countries — see our applying for Certificate of Residence guide for the reverse case (Singapore residents claiming foreign DTA relief).

Non-resident director's salary: Where a non-resident is paid as an employee (not as a board member), the flat rate is 15% withholding tax on salary, or resident rates if higher.

Services performed entirely outside Singapore: If a non-resident director provides services solely outside Singapore, the director's fees are generally not subject to Singapore tax. However, the source of the fees must be clearly documented. Income sourced in Singapore remains taxable.

CPF Treatment

CPF (Central Provident Fund) treatment is one of the most misunderstood aspects of director's remuneration.

Director's Fees — No CPF

Director's fees are payment for holding office, not for employment. They are not subject to CPF contributions, regardless of the director's residency status. See our CPF guide for the fundamentals.

Director's Salary — CPF Applies for Singapore Citizens and PRs

Where a director is also an employee and receives a salary, CPF contributions are required — but only if the director is a Singapore citizen or Permanent Resident.

Employee contribution: Up to 20% of monthly ordinary wages
Employer contribution: Up to 17% of monthly ordinary wages
Age-based rates apply for directors above 55

Foreign directors on Employment Passes, S Passes, or other work passes are not required to contribute to CPF on their salary — CPF is only for Singapore citizens and PRs.

Common Structuring Implication

Many owner-directors of Singapore SMEs — particularly those who are citizens or PRs — combine a modest salary (to maintain CPF contributions for retirement) with director's fees approved at the AGM (for tax-efficient distribution of profits). The optimal split depends on income level, tax reliefs claimed, and CPF ceiling limits.

Shareholder Approval Requirements

Under the Companies Act, director compensation requires proper corporate governance:

For Director's Fees

Approval required at a general meeting (typically the AGM)
Requires an ordinary resolution unless the company's constitution requires otherwise
Interested directors (those whose fees are being approved) generally cannot vote on their own fees
Documented via a directors' resolution in writing or minuted at the general meeting

For Director's Salary

Approved by the Board of Directors (not the general meeting)
Documented in the director's employment contract
No shareholder vote required for the salary itself, though the board's remuneration decisions may be reviewed by shareholders

For Compensation for Loss of Office (Termination)

Special rules apply. Under the Companies Act:

Compensation must generally be disclosed to and approved by shareholders
Exception: No general meeting approval is required if (1) the proposed amount is less than the director's fees for the year immediately preceding termination, AND (2) the terms are disclosed before payment
Payments made in breach of these rules are held on trust for the company

Corporate Tax Deductibility

Director's fees and salaries are tax-deductible business expenses for the company, reducing taxable profit and therefore the corporate income tax liability — provided:

Fees have been properly approved via shareholder resolution
Amounts are reasonable in relation to services rendered
Fees relate to the accounting period being claimed

Important: IRAS may disallow deductions where director's fees are considered excessive or unreasonable given the size and activity of the company. This is a common area of scrutiny for closely-held companies.

Contrast with dividends: Dividends paid to shareholder-directors are not tax-deductible for the company (they are paid from post-tax profits). This creates a strategic choice for owner-directors: fees reduce corporate tax but are taxed as personal income; dividends are paid from taxed profits but are exempt in the shareholder's hands under Singapore's one-tier tax system.

For a full breakdown of the corporate tax mechanics, see our corporate income tax filing guide.

Per Diem Allowances for Directors Visiting Singapore

For non-resident directors who travel to Singapore for board meetings or business purposes, IRAS publishes an acceptable per diem rate each year. Amounts up to this rate are not taxable as employment income:

2025 rate: S$160 per day
2026 rate: S$175 per day

Amounts paid in excess of the per diem rate are treated as taxable additional remuneration.

The per diem rate covers meals, laundry, transport within Singapore, and incidentals. Actual airfare, hotel accommodation, and business-related transport are separately reimbursable (and non-taxable) if properly supported by receipts.

Insolvency and Unjust Director Remuneration

If a company is wound up or enters formal insolvency proceedings, remuneration paid to directors within a defined period before the winding up may be subject to review.

Legislative note: Insolvency and winding-up provisions were consolidated into the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), which came into force on 30 July 2020. Older references to Section 341 of the Companies Act have been superseded — the equivalent provisions are now in the IRDA.

Under the IRDA, liquidators may apply to court to recover excessive or unfair remuneration paid to directors, particularly where:

The director breached their fiduciary duties
The remuneration was unreasonable given the company's financial state
Payments were made when the company was already insolvent

Courts can order repayment with or without interest. Directors of financially distressed companies should be especially cautious about the level and timing of remuneration.

For a broader look at the process, see our company liquidation guide.

Disclosure Requirements

Singapore-incorporated companies must disclose director and CEO remuneration in their annual financial statements. The disclosure includes:

Base salary
Bonuses and profit-sharing
Director's fees
Benefits-in-kind
Shares, share options, and other long-term incentives
Termination payments (where applicable)

For listed companies, additional disclosure is required in the annual report, including individual director-level detail for the top-earning executives.

For private companies, aggregate disclosure by band (e.g., S$250,000–S$500,000) is generally sufficient unless the constitution requires otherwise.

Practical Structuring: Common Approaches for Singapore Founders

For owner-founders who serve as directors of their own private limited company:

Structure A — Salary-heavy:

Take a monthly salary at or above CPF ceiling
Maximises CPF contributions for retirement
Salary is CPF-deductible for the company
Higher personal tax exposure at progressive rates

Structure B — Fees-heavy:

Nominal or zero salary; large director's fees approved at AGM
No CPF (foregoing employer-employee CPF matching)
Fees are corporate tax deductible
Personal tax at progressive rates

Structure C — Balanced (most common):

Modest monthly salary (e.g., S$3,000–S$8,000) to maintain CPF contributions
Director's fees at year-end to distribute residual profit
Board resolution documenting salary; shareholder resolution documenting fees
Optimal for most owner-directors who are Singapore citizens or PRs

The right structure depends on tax rate exposure, CPF ceiling, family circumstances, and the company's cash flow — consult a licensed tax agent when in doubt.

Frequently Asked Questions

Do I need CPF for my director's fees in Singapore?

No. Director's fees are payment for holding office and are not subject to CPF contributions, regardless of the director's residency status. CPF only applies to director's salary (for Singapore citizens and PRs serving as employees).

What's the tax rate on director's fees for a non-resident director?

Non-resident directors pay a flat 24% withholding tax on director's fees (raised from 22% for YA2024 onwards). Reduced rates may apply under a Double Tax Agreement.

Are director's fees deductible for corporate income tax?

Yes, provided the fees are approved via shareholder resolution, reasonable in relation to services rendered, and relate to the accounting period claimed. Excessive or unreasonable fees may be disallowed by IRAS.

When are director's fees taxable — when declared or when paid?

Director's fees are taxable when the director's services for the accounting period have been rendered. Fees approved in advance at an AGM for future services are taxable when those services are subsequently rendered.

Can I pay myself both a salary and director's fees?

Yes. Many owner-directors do this — a salary (approved by the Board) for executive work as an employee, and director's fees (approved by shareholders) for holding the office of director. Different tax and CPF rules apply to each.

Does a non-resident director need to pay Singapore tax if all work is done overseas?

Generally no. If a non-resident director provides services entirely outside Singapore, the fees are not subject to Singapore tax. The source of the fees must be clearly documented.

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