Guide to Directors’ Remuneration in Singapore

Last updated on March 19, 2020

men having a meeting at a table

As the director of a company, you may wish to know more about how company directors can be remunerated. The Companies Act (CA) sheds some light on this matter. The Model Constitution will likely also be relevant if your company is using it as the company constitution without any modification.

What Constitutes Remuneration and Who Decides?

Remuneration can come in 2 forms, namely director’s fees and salary. The type of remuneration received will affect the need for disclosure of the remuneration, the making of CPF contributions and also whether such payment will be subject to tax.

Director’s Fees

Director’s fees are fees to be paid to a director in their capacity as company director, for the directorial services they perform for the company.

Generally, directors do not have any right to be remunerated for the directorial services they perform for the company. However if a company wishes to pay director’s fees to its directors, section 169 of the Companies Act states that this payment has to first be approved in a general meeting by a resolution unrelated to other matters. Any resolutions for the approval of director’s fees which breach this section will be void (i.e. have no legal effect).

Director’s fees will include:

  • Allowances for expenses as far as such allowances are charged to income tax in Singapore
  • Any benefits that the director has received in a form other than cash in respect of his directorial services (e.g. company cars)

If a company has adopted regulation 74 of the Model Constitution without modification, the director’s fees payable to the company’s directors will include all “travelling, hotel and other expenses properly incurred” as a result of attending meetings related to the company’s business (e.g. directors’ meetings and general meetings).


Apart from director’s fees, a director can also obtain a salary as per their contract of service with the company, in their capacity as company employee.

Since this payment is made in respect of the director’s capacity as company employee instead of their capacity as director, director’s salaries need not be approved in a general meeting as per section 169 of the Companies Act. However, the amount of salary must still be approved by the board of directors beforehand.

Disclosure of Director’s Remuneration in Company Reports

As salaries are considered company expenses, directors’ salaries (if any) should be disclosed as part of the company’s expenses in its annual report.

As for directors’ fees, while there is no law stating that directors’ fees must be disclosed, companies are nonetheless encouraged to disclose the amount of director’s fees paid to each director in their annual reports as well.

CPF Contributions by the Company

Companies have to make CPF contributions only in respect of the salaries paid to directors who are considered employees engaged under a contract of service. Companies need not make CPF contributions on directors’ fees.

Tax on Director’s Remuneration

Director’s salaries are taxable since such salaries are considered income derived from the director’s employment.

Directors’ fees are generally taxable as well, but this applies only if the director has rendered the requisite services for the accounting year concerned. Thus, if director’s fees were decided in advance for the next upcoming year, such fee will not be taxable for the current particular accounting year but only in the next upcoming year.

However, director’s fees will not be taxable in Singapore if the company does not have a presence in Singapore. This is even if the director had to attend board meetings or similar company-related meetings in Singapore. Rather, the fees will generally be taxable in the country where the company is resident instead.

Payment to Director Upon Leaving Office

Under section 168 of the Companies Act, companies are prohibited from making any payment of compensation to a director for their loss of office, unless the particulars of such proposed compensation (including the amount of such proposed compensation) have been disclosed and approved by the company members in general meeting.

However, approval by the company to compensate a director for their loss of office is not required if the following requirements in section 168(1A) of the Companies Act are both satisfied:

  1. The amount of compensation is less than the director’s fees for the year preceding the termination of the director’s employment; and
  2. Particulars of the proposed compensation (including the amount of the proposed compensation) had been disclosed upon or prior to the payment.

Unfair or Unjust Remuneration of Director Prior to Company’s Winding Up

If a company is being wound up and its liquidators or creditors suspect that a director has been unfairly or unjustly remunerated (whether in director’s fees or salary) during the 2 years before the start of winding up proceedings, the company’s liquidators or creditors can apply to the court under section 341 of the Companies Act to compel the director to repay the money to the company (with or without interest).

Unfair or unjust remuneration may arise if it can be established that the director had, during their directorship, committed breaches of their director’s duties or failed to account for any company monies or property.

The issue of director’s remuneration can be a potentially sensitive one. If you need legal advice, feel free to get in touch with one of our corporate and commercial lawyers.

  1. What are Annual General Meetings (AGMs) in Singapore?
  2. Anti-Money Laundering Regulations and Your Business: What You Need to Know
  3. Price-Fixing, Bid-Rigging and Other Anti-Competitive Practices to Avoid
  4. Dividend Payments Guide for Singapore Business Owners
  5. Company Audits in Singapore: Requirements and Exemptions
  6. Guide to Transferring Shares in a Singapore Private Company
  7. How to Hold Extraordinary General Meetings (EGMs) in Singapore
  8. How to Issue Shares in a Singapore Private Company
  9. How to Reduce the Share Capital of Your Singapore Company
  10. Legally Conducting Lucky Draws for Singapore Businesses
  11. Dormant Companies and Their Filing Obligations in Singapore
  12. How to Hold a Board Meeting in Singapore
  13. Can Directors be Liable for Company Debts in Singapore?
  14. Paid-Up Capital in Singapore: A Complete Guide (Is $1 Enough?)
  15. Restaurant Inspection and Food Safety Rules in Singapore
  16. Preparing a Register of Shareholders for a Singapore Company
  17. Essential Regulatory Compliance Guide for Singapore Companies
  18. Finding a Suitable Corporate Secretarial Firm in Singapore
  19. Oppression of Minority Shareholders
  20. Process Agents in Singapore
Company Management
  1. Shadow Directors: Who are They and What Duties Do They Owe to the Company?
  2. Guide to Directors' Remuneration in Singapore
  3. 3 Types of Insurance Every Singapore Business Needs
  4. How to Change the Name of Your Singapore Company
  5. How to Remove a Director from a Company in Singapore
  6. Appointing Company Directors in Singapore: Eligibility, Process etc.
  7. Company Loans to Directors/Shareholders (& Vice Versa) in Singapore
  8. Share Transmission: What Happens If a Shareholder Dies in Singapore?
  9. Business Will: How to Pass on Your Business to Your Successors in Singapore
  10. Shareholder Rights in Singapore Private Companies
  11. Removal and Resignation of Company Auditor in Singapore
  12. Shareholder Roles and Obligations in Singapore Companies
  13. Creating and Registering Charges in Singapore: Guide for Companies
  14. How to Commence a Derivative Action on Behalf of a Company in Singapore
  15. Managing Director vs CEO in Singapore: Roles and Obligations
  16. Appointing an Authorised Representative for Foreign Companies in Singapore
  17. Business Partnership Disputes in Singapore: How to Resolve
  18. Guide to Effective Business Continuity Planning in Singapore
  19. Buy-Sell Agreements: How to Write & Fund Them in Singapore
  20. Voluntary Suspension of Business in Singapore: How to Handle
  21. Business Asset Sale & Disposal in Singapore: How Do They Work?
  22. Appointing a Company Secretary: Roles and Responsibilities
  23. Directors' Duties in Singapore
Company Documents
  1. Company Constitutions in Singapore and How to Draft One
  2. Company Memorandum and Articles of Association
  3. Minutes of Company Meeting in Singapore: How to Record
  4. Guide to Filing Financial Statements for Singapore Business Owners
  5. Filing Annual Returns For Your Business
  6. Memorandum of Understanding (MOU): Does Your Business Need One?
  7. Company Resolutions: What are They?
  8. Board Resolutions in Singapore
  9. Your Guide to Share Certificates in Singapore: Usage and How to Prepare
  10. How to Set Up a Register of Controllers
  11. How to Set Up a Register of Nominee Directors
Tax and Accounting
  1. What is Withholding Tax and When to Pay It in Singapore
  2. Singapore Influencers: Here's How to Calculate Your Income Tax
  3. Corporate Tax in Singapore: How to Pay, Tax Rate, Exemptions
  4. When to Register for GST, How and Responsibilities after Registration
  5. Start-Up Tax Exemption Guide for New Singapore Companies
  6. Tax Investigation of Tax-Evading Business Owners in Singapore
  7. Small Business Accounting Services in Singapore
Data Protection
  1. Essential PDPA Compliance Guide for Singapore Businesses
  2. Cloud Storage of Personal Data: Your Business’ Data Protection Obligations
  3. How Can Companies Dispose of Documents Containing Personal Data?
  4. Here's a 7-Step Plan for Companies to Prevent Unauthorised Disclosure When Processing and Sending Personal Data
  5. Appointing a Data Protection Officer For Your Business: All You Need to Know
  6. Summary: Your Organisation's 9 Main PDPA Obligations
  7. Check the Do-Not-Call Registry Before Marketing to Singapore Phone Numbers
  8. GDPR Compliance in Singapore: Is it Required and How to Comply
  9. Drafting a Comprehensive Privacy Policy For Your Singapore Website
  10. Is It Legal for Businesses to Ask for Your NRIC in Singapore?
  11. PDPA Consent Requirements: How Can Your Business Comply?
  12. Legal Options If Employees Breach Confidentiality in Singapore
  13. Your Guide to a Media Release Form in Singapore
  1. Complying with Singapore Law When Sending Email Newsletters
  2. Outdoor Advertising: How to Legally Display Public Ads in Singapore
  3. A legal guide to drafting a social media policy for your company
  4. Dealing with Defamation of Your Business: Can You Sue?
  1. Starting a Franchise in Singapore: What Franchisors Should Look Out For
  2. Running a Franchise in Singapore: What To Look Out for as a Franchisee
Debt Restructuring
  1. Informal Debt Restructuring and Workout in Singapore
  2. Schemes of Arrangement: How They Work and How to Apply
  3. What is Judicial Management and How It Works in Singapore
Ending a Business
  1. Insolvency: Claw-Back of Assets From Unfair Preference and Undervalued Transactions
  2. Striking Off a Company
  3. What Should a Creditor Do When a Company Becomes Insolvent?
  4. Dissolution of partnerships in Singapore
  5. Validation of Payments Made by Companies Being Wound Up
  6. Can a Company that Struck Itself Off the Register Later Apply to Restore Itself?
  7. Closing Your Singapore Business: What You Need to Settle
  8. How to File a Proof of Debt against a Company in Liquidation
  9. Winding Up a Company