QUALIFYING delivery workers will have the choice to claim tax deductions on business expenses based on a fixed proportion of their annual gross income earned from delivery services, for income earned in 2023 onwards. This includes both food and goods delivery.

That’s based on information from the Inland Revenue Authority of Singapore (Iras) website on Monday (Jan 8).

The fixed expense deduction ratio (FEDR), which allows qualifying individuals to claim a deemed amount of business expenses based on a prescribed percentage of the gross income earned, is a simpler alternative to claiming tax deductions based on the actual amount of allowable business expenses incurred.

To qualify, delivery workers must be self-employed individuals, earning S$50,000 or less from the delivery services. They must also only use prescribed delivery modes, with the FEDR claimable depending on the mode used.

Workers who deliver on foot, by public transportation or on non-power-assisted bicycles can claim FEDR of 20 per cent on annual gross income from delivery services. Meanwhile, those who do so on motorised personal mobility devices, power-assisted bicycles or motorcycles can claim 35 per cent; and those by vans, 60 per cent.

Those whose total annual gross income is more than S$50,000, or who use delivery modes other than the ones prescribed above – such as cars, lorries or trucks – should claim tax deductions based on the actual allowable business expenses incurred in earning the income, Iras said.

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Delivery workers who use multiple delivery modes in the same year should apply the respective FEDRs to the corresponding income earned under each delivery mode, it added.