Claim the 25% FEDR: CEA & IRAS Referral Fee Rules for Singapore RESs
CEA does not fix commission rates or referral fees, but it does forbid an agent from collecting commission from more than one party in the same transaction. Every referral or co-broking split must be documented and disclosed in the prescribed Estate Agency Agreement or in written co-broking terms, and payment must flow through your agency, not into your personal account. IRAS then treats that referral income as gross commission income, which your agency may pre-fill on your behalf come tax season.
TL;DR:
Agents must document and disclose referral or co-broking splits in writing, ensuring payment flows through the agency’s account and not to personal accounts.
All agreements, transfer records, and correspondence related to referral fees must be kept for potential IRAS or CEA inquiries.
The prescribed estate agency agreement must state the exact fee amount and applicable GST, with the agent explaining the terms clearly to the client before signing.
Referral fees are included in gross commission income reported to IRAS, with a 25% deduction available for eligible agents earning up to $50,000.
Documented cases show agents face suspensions and fines when hiding referral payments, misrepresenting commissions, or bypassing proper procedures.
Table of Contents
Quick compliance checklist before you accept or offer a referral
What does CEA actually require about commissions and referral fees?
Co-broking and referral best practice: avoiding dual representation
What does IRAS require and how do referral fees appear on your tax return?
How Career With ERA supports new agents with compliance training
Quick compliance checklist before you accept or offer a referral
Before you agree to a split with another agent, or before you hand a client to a colleague, run through a short list. It takes minutes and it protects your registration.
Confirm who you actually represent and never accept commission from both the buyer and the seller in one deal.
Put the split or referral fee in writing, either in the prescribed Estate Agency Agreement or as an added clause on the pink sheet.
Direct all commission instructions to your agency’s account, not to your personal bank account, and check whether GST applies to the transaction.
Keep the signed agreement, bank transfer records and any related correspondence in case IRAS or CEA asks for them later.
None of this is complicated, but skipping it is how honest arrangements turn into disciplinary cases.
What does CEA actually require about commissions and referral fees?
CEA leaves the commission rate itself to negotiation between agent and client, with detailed comparisons of developer pricing vs agent fees for Singapore buyers offering useful market insights. What it insists on is that the agreed figure, and any GST if applicable, appear in writing in the prescribed Estate Agency Agreement, and that the agent explain the agreement clearly before the client signs.
The agreement itself does more than record the fee. It sets out your duties to the client, declares any conflicts of interest, and, for exclusive residential listings, cannot run longer than three months at a stretch. CEA’s own guidance on Estate Agency Agreements lists eight prescribed forms covering different scenarios, and using the correct one is not optional paperwork, it is the mechanism that protects both sides if a dispute arises later.
The same CEA guidance for consumers is explicit that commission should be paid to the agency after completion, never to the individual salesperson directly. An agent who misrepresents the commission arrangement, hides a referral fee, or fails to disclose a conflict of interest risks action under the Code of Ethics and Professional Client Care (CEPCC). That is not a technicality. It is the difference between a clean file and a CEA enquiry that follows you for years.
Co-broking and referral best practice: avoiding dual representation
Co-broking is where most referral fee questions actually arise, because two agents are working the same deal from different sides. The SEAA Best Practice Guide for co-broking commission, effective from 1 July 2024, encourages agents to collect commission only from the client they represent and to negotiate any sharing arrangement in good faith rather than assuming a default split.
The practical rule is simple: whatever you and the other agent agree, put it in writing before the deal proceeds, and make the figures explicit rather than implied. A verbal “I’ll sort you out later” is exactly the kind of arrangement that falls apart when a deal closes and someone remembers the numbers differently.
CEA’s disciplinary record shows what happens when agents skip this step. Documented cases involve hidden referral promises that surfaced only after a dispute, agents misrepresenting the commission actually received, and agents bypassing an appointed salesperson entirely to close a sale directly. Each of these started as a shortcut and ended as a suspension.
What does IRAS require and how do referral fees appear on your tax return?
Referral fees and co-broking shares are not a separate category to IRAS. They form part of your gross commission income, alongside your standard commission, and your agency is required to report them.
Commission-paying organisations must register with IRAS and, when notified, submit identification and income details for every commission agent they pay. That pre-filling submission window runs from 2 January to 1 March, with registration deadlines notified earlier, and the figures your agency submits will appear pre-filled in your income tax return.
Item | What it covers | Key figure |
Pre-filling submission window | Agency submits gross commission income to IRAS | 2 January to 1 March |
FEDR eligibility | Qualifying commission agents, gross commission income at or below the threshold | 25% deduction, up to $50,000 gross commission income |
Above FEDR threshold | Gross commission income exceeds the cap | Claim actual expenses instead |
The Fixed Expense Deduction Ratio lets qualifying agents deduct 25% of gross commission income without itemising receipts, provided total gross commission income for the year does not exceed $50,000. If your income runs above that, you switch to claiming actual expenses instead. Either way, check with your agency that your income has been submitted correctly, and if something looks off, you can flag it for amendment before you file.
Recordkeeping and how to respond to a CEA or IRAS enquiry
Keep every signed agreement, every bank transfer record, every co-broking terms sheet, and every related e-mail or message for as long as IRAS or CEA might reasonably ask for them. This is not about distrust of your colleagues, it is about being able to answer a question quickly when one comes.
Giving false or misleading information to CEA during an enquiry is treated more seriously than most agents expect. One documented case involved a fine for giving false information to a public servant, and other cases have ended in suspension for bypassing an appointed agent to close a deal. The honest arrangement disclosed early is almost always less costly than the tidy story told under pressure.
If you are ever notified of an enquiry, collate your documents immediately, tell your agency’s compliance lead the same day, and seek legal advice if the matter involves money already paid out.
Practical steps, templates and scripts for referral fees
A referral fee should follow the same five steps every time, whether you are the one referring the client or the one receiving them.
Confirm which party you represent before any conversation about splitting a fee.
Agree the split or referral amount verbally first, then commit it to writing the same day.
State the exact percentage or dollar figure in the clause, never a vague “we’ll work it out”.
Add that clause to the Estate Agency Agreement or the pink sheet before the transaction proceeds.
Keep proof of payment once the agency has processed it.
Two short scripts help here. To a client: “There’s a co-broking arrangement on this deal, and it’s fully disclosed in your agreement, it doesn’t change what you pay.” To another RES: “Let’s put the split in writing now, at [percentage], so there’s no ambiguity when this closes.” Team leaders should audit every incoming referral arrangement at onboarding, checking that the paperwork exists before the deal, not after.
Pro Tip: Always insist that commission be paid agency to agency, never agent to agent, so you are never personally holding money that belongs to someone else’s client file.
Why transparency protects your licence and your earnings
I’ve seen agents lose more from a hidden referral fee than they ever gained from it, in fines, in suspension, and in the trust of their own team. [DONNY TO CONFIRM] Disclosure isn’t a formality, it’s what lets you build a career you can still be doing in ten years.
— Donny Lee
How Career With ERA supports new agents with compliance training
Getting the paperwork right from day one is far easier with structured onboarding behind you. Career With ERA’s RES Course Registration gets new agents licensed correctly, and our RES Startup Toolkit Training includes the compliance checklists and agreement templates covered above, backed by mentorship from agents who have handled these situations before. If you are weighing up a property agent career, speak with Donny about joining ERA.
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This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
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FAQ
What counts as a referral fee in Singapore real estate?
A referral fee is a share of commission paid to another salesperson or agency for passing on a client, and it must be documented in writing under the same Estate Agency Agreement rules that govern regular commission. It is not a separate legal category from commission for CEA or IRAS purposes.
Is there a cap on referral fees for property agents?
CEA does not set a maximum referral fee or commission rate, leaving the amount to negotiation between the parties involved. The figure simply must be recorded in the prescribed agreement before the transaction proceeds.
Can I receive commission from both the buyer and the seller?
No. CEA’s guidance is clear that an agent must not collect commission from more than one party in the same transaction, even where a referral arrangement is involved.
Do I pay tax on referral fees separately from commission?
No, referral fees form part of your gross commission income and are reported together. Qualifying agents with gross commission income up to $50,000 may use the 25% Fixed Expense Deduction Ratio, and those above that threshold claim actual expenses instead.
What happens if I hide a referral fee from my client or my agency?
CEA disciplinary records show agents fined and suspended for misrepresenting commission or hiding referral payments, sometimes years after the original transaction. New agents can learn the correct process for CEA registration and paperwork before they ever face this situation.
Where do referral fee payments have to go?
Payment should go to the property agency rather than directly to the individual agent, with the agency then distributing the agreed split. This keeps the commission handling process auditable for both CEA and IRAS.
Recommended
This article provides general information for people exploring a real estate career in Singapore and is not legal, tax or financial advice. Rules, fees and requirements may change; always check the latest guidance from CEA, IRAS and other official sources. For personal career advice, speak with Donny Lee at ERA Singapore.
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