GST, Xero and Compliance for MOM-Licensed Agencies.
We help employment and recruitment agencies get the GST treatment of every fee line right, run their books in Xero, and stay on top of IRAS, ACRA and MOM obligations, with accounting and virtual CFO support built for the industry.
A single invoice from an employment agency can mix the agency’s own placement fee with work permit fees paid to MOM, insurance premiums, medical examinations, airfares and passport renewals. Some of those lines are the agency’s own supplies, which a GST-registered agency charges GST on at 9% where they are standard-rated. Others may be disbursements, where the agency pays a third party purely as agent for the employer. Which applies depends on the contract and on whether the agency acts as principal or agent for each cost.
Getting that split right on every invoice decides how much GST you charge, how much input tax you can claim, and whether your reports show the true margin on placement work. We set up the accounts, the GST treatment and the reporting with the realities of the employment agency trade in mind.
That is where an accounting specialist for employment agencies matters.
GST treatment that changes line by line: placement fees, reimbursements and disbursements on the same invoice
Amounts collected on an employer’s behalf that can inflate revenue and hide the real margin
Multiple branches and spreadsheets that make GST F5 returns slow to prepare by hand
Compliance across IRAS, ACRA and MOM, alongside the agency’s own work pass applications
Registered Filing Agent FA20020117
Certified Accountants by ISCA
Trusted Collaborations With MOM
Trusted Collaborations with IRAS
CWM is a CPA Practice
Accredited Tax Advisor ATA0067
Developed from more than 50 years of supporting Singapore businesses, and a work pass practice that keeps us close to this industry.
We review every fee line you bill against the GST Act and IRAS guidance, document the position, and can take it to IRAS for confirmation. See our Singapore tax services.
Reimbursement vs disbursement reviewInput tax and Regulation 26 reviewGST position paper for IRASWe configure Xero with a GST-mapped chart of accounts and clearing accounts for genuine disbursements, so GST is applied consistently and, after review, GST F5 returns can be filed straight from Xero.
GST-mapped chart of accountsDisbursement clearing accountsInvoicing, expenses and bank feedsWe maintain your books in Xero across branches and prepare and file your GST F5 returns, so reporting shows the true margin on placement work. See our accounting services.
Monthly bookkeeping in XeroGST F5 preparation and filingBranch and placement margin reportingWe act as the directors’ point of contact for IRAS, ACRA and MOM matters and give you finance support without a full-time hire. See our virtual CFO services.
IRAS, ACRA and MOM point of contactManagement reporting and cash flowWork pass support through our Work Pass teamFor GST, a disbursement is the recovery of a payment you made as agent on your client’s behalf; it is not a supply, so no GST is charged. A reimbursement is the recovery of a cost you incurred as principal. Its treatment depends on whether the recovery is consideration for a supply: where the cost is incurred in providing a standard-rated placement service, it generally follows that service and attracts GST at 9%.
The question is whether you acted as principal or as agent when the cost was incurred. IRAS’s guidance on recovering expenses looks at indicators such as:
The placement fee is the agency’s own supply and is standard-rated. In the engagement below, items such as these were treated as genuine disbursements, routed through balance sheet clearing accounts, and the treatment was confirmed with IRAS:
How an item is shown on the invoice does not decide the treatment on its own. It depends on how each item is contracted and who is liable for it, so it needs to be checked against your own arrangements.
Under the GST InvoiceNow Requirement, GST-registered businesses must send their invoice data to IRAS through the InvoiceNow network. IRAS is bringing businesses in by phase, and has been notifying businesses registered before 2026 of their implementation date.
If your agency already runs Xero, we can review your setup and invoicing process and help you move to an InvoiceNow-ready workflow ahead of your date.
| From | Who it applies to |
|---|---|
| 1 Nov 2025 | Companies that register for GST voluntarily within 6 months of incorporation |
| 1 Apr 2026 | All businesses applying for voluntary GST registration |
| 1 Apr 2028 | New compulsory GST registrants, and existing GST-registered businesses with total annual supplies of S$200,000 or less |
| 1 Apr 2029 | Existing GST-registered businesses with total annual supplies of S$1 million or less |
| 1 Apr 2030 | Existing GST-registered businesses with total annual supplies of S$4 million or less |
| 1 Apr 2031 | Existing GST-registered businesses with total annual supplies above S$4 million |
Source: IRAS. Check your own implementation date with IRAS.
A real engagement with a Singapore employment agency: the GST position we agreed with IRAS, the Xero system we built around it, and the support we provide today.
Best Home Employment Agency Pte. Ltd.
Singapore • Since 1996
Case Study | Employment Agency (MDW Placement)
Best Home Employment Agency Pte. Ltd. • Singapore • Since 1996
Best Home Employment Agency Pte. Ltd. has been placing migrant domestic workers with Singapore families since 1996. An SME 500 winner with close to 30 years of service, the agency runs several branches and also directly employs helpers for part-time and housekeeping assignments.
Its finance function had not kept pace. There was no accounting system: revenue and expenses were tracked manually across spreadsheets, branch by branch, and the figures behind each GST return were assembled by hand.
Employment agency billing is unlike most industries. A single invoice to one employer can carry a placement fee alongside a work permit application paid to MOM, an insurance premium, a medical examination, an airfare, a settling-in programme and a passport renewal.
Some are the agency’s own supply, standard-rated at 9%. Others are paid to a third party purely as agent for the employer, and fall outside GST altogether. Whether an item is a reimbursement or a disbursement decides whether GST is charged and whether input tax may be claimed — and the judgement applies line by line, on every invoice.
Applied inconsistently, the error does not stay small.
We reviewed every revenue line and expense category against the GST Act, the IRAS e-Tax Guide on reimbursement and disbursement, and the Regulation 26 input tax blocks, classifying each as standard-rated, zero-rated, exempt or out of scope.
We designed a GST-mapped chart of accounts in which the treatment is enforced by the account itself. Genuine disbursements — work permit fees, MDW insurance premiums and indemnity waivers, embassy documentation, homeleave and passport renewals — route through dedicated balance sheet clearing accounts and never touch revenue. Where the agency acts as principal, paired income and cost accounts record the recovery gross.
We documented the position, supported by illustrative invoices, and took it to IRAS. The treatment was confirmed.
Invoicing, the expense module, bank feeds and contacts were built around that chart of accounts, so GST F5 returns are prepared and filed directly from Xero.
We maintain the books in Xero and act as the directors’ point of contact for IRAS, ACRA and MOM matters.
Full Xero implementation: GST-mapped chart of accounts, paired reimbursement and disbursement accounts, invoicing and expense modules
A documented GST position covering every fee line the agency bills, agreed with IRAS
GST F5 prepared and filed directly from Xero, with ongoing bookkeeping and virtual CFO support
The agency now invoices knowing each line carries the right GST treatment, and its reporting shows the true margin on placement work rather than a figure inflated by amounts collected on an employer’s behalf.
Ching and Wong Management has been providing excellent support to our company with professionalism, efficiency, and meticulous attention to detail. Mr Ching and his team are reliable, responsive, and always willing to go the extra mile to ensure our accounting needs are well taken care of.
Great service and professional.
Verified Google reviews — CWM holds a 4.9 rating across 40 reviews.
Best Home’s position is a common one. Agencies are built around service to families and workers, and the billing conventions of the trade tend to grow up through practice rather than being tested against the legislation. Because the same fee lines repeat on every invoice, a treatment that is slightly wrong rarely stays small.
CWM has supported Singapore businesses for over 50 years. We are a CPA practice, an Accredited Tax Advisor (ATA0067) and a registered filing agent (FA20020117), with working relationships with IRAS and MOM and a work pass practice that keeps us close to this industry. For employment agencies, we can review the GST treatment of your fee structure, implement Xero around it, and look after the books from there.
A disbursement is the recovery of a payment you made as agent on your client’s behalf. It is not a supply, so no GST is charged. A reimbursement is the recovery of a cost you incurred as principal. Where it is consideration for your own supply, it generally follows that supply’s GST treatment, so a GST-registered agency will usually charge 9% on it alongside a standard-rated fee. Not every recovery is a supply, though; recovering compensation for a loss, for example, is not.
Generally not, where the fee is the employer’s liability and the agency simply pays it to MOM on the employer’s behalf and recovers the exact amount. That recovery is a disbursement, which is not a supply, so no GST is charged. If the agency incurs a cost as principal instead, the recovery is a reimbursement and generally follows the GST treatment of the agency’s own fee. How the item appears on the invoice does not decide this on its own.
A GST-registered agency can generally claim the GST on business purchases used to make its taxable supplies, such as the placement fee, provided IRAS’s conditions are met, including holding a valid tax invoice addressed to the agency. Regulations 26 and 27 of the GST (General) Regulations block some claims, including club subscription fees, motor car expenses, family benefits, and staff medical expenses and medical or accident insurance. There are exceptions, for example where staff medical costs or insurance are obligatory under the Work Injury Compensation Act or a collective agreement, or where a vehicle falls outside the regulations’ definition of a motor car, so each expense category should be checked before input tax is claimed.
There are two tests. Under the retrospective test, an agency whose taxable turnover is more than S$1 million for a calendar year must apply to register by 30 January of the following year. Under the prospective test, an agency that can reasonably expect taxable turnover of more than S$1 million in the next 12 months must apply within 30 days of that forecast. Taxable turnover counts standard-rated and zero-rated supplies, not exempt or out-of-scope ones, and disbursements are not supplies made by the agency, so they do not count towards it. IRAS sets out some exceptions and the date registration takes effect.
We implement Xero for employment agencies, with a GST-mapped chart of accounts and dedicated clearing accounts for genuine disbursements. This keeps GST treatment consistent across branches and reduces manual work, and after transactions are reviewed and reconciled, GST F5 returns can be filed directly to IRAS from Xero. Xero can also be part of an InvoiceNow-ready setup.
Yes. We support MOM-licensed employment agencies, including foreign domestic worker (MDW) placement agencies and recruitment agencies, with GST advisory, Xero implementation, bookkeeping, virtual CFO support and work pass services.
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