Commission Agents: Eligibility for the 25% Expense Deduction

Key steps and distinctions

The agent must actually have incurred deductible expenses in earning the qualifying commission; receiving a small commission without any deductible expenditure does not qualify. A partnership providing financial advisory services cannot use this individual-agent concession. Where eligible commission is pre-filled from paying organisations, the deduction is calculated automatically. Otherwise, select the appropriate commission-agent, insurance-agent, property-agent or broker business category during e-Filing; paper filers calculate the deduction themselves. An agent may instead claim actual allowable expenses, particularly when these exceed 25%, and can choose the preferred basis separately each year. The FAQ allows an objection within 30 days of the Notice of Assessment to change the basis already claimed. Simple records remain necessary when using the ratio. When claiming actual expenses, the FAQ describes simplified record-keeping eligibility and notes the revenue threshold increase to S$200,000 from YA 2021; agents outside that regime must keep daily records and supporting documents for five years from the relevant YA. The ratio simplifies expense computation rather than eliminating income verification.