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How To Pay Income Tax in Singapore? – A Step-by-Step Guide

how to pay income tax singapore
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Whether you’re an employee or a self-employed individual, paying taxes is part of your contribution to the nation’s growth. Thankfully, personal income tax in Singapore is one of the most competitive in the world. Singapore follows a progressive resident tax rate starting at 0% and maxes out at 22% for incomes above S$320,000.

But can you pay income tax yourself? Yes. Most taxpayers pay their taxes via GIRO, via one-time payment, or 12-month interest-free installments. You can also pay via electronic payment modes, such as internet, phone, or mobile banking.

Feeling overwhelmed? Filing taxes doesn’t have to be complicated. Here is a step-by-step guide to paying income tax in Singapore.

How To File and Pay an Income Tax

There are two ways to file a personal income tax:

  • Electronic filing (via online) or
  • Paper filing (by mail)

If you want to file your taxes online, here’s how to do it:

Step 1: Get a SingPass or SingPass Foreign User Account (SFA)

First of all, you’ll need to have a SingPass to access all Government e-Services. You may apply for SingPass online. You will receive it within 4 working days. Lastly, when you use SingPass, you will have to go through a 2-Step Verification.

If you’re not eligible for SingPass, you can apply for an SFA online.

Step 2: Prepare All the Necessary Documents and Requirements

Keep the following ready:

  • SingPass / IRAS Unique Account (IUA)
  • Form IR8A – if your employer is not participating in the Auto-Inclusion Scheme
  • Details of your dependents, such as your child or parent, for new relief claims
  • Details of other sources of income (if any), such as rental income
  • Business Registration Number / Partnership Tax Reference Number (for self-employed and partners only)

Note: There are different tax filing forms. IRAS will ask you to choose one of the three form options based on your tax residency status and employment level:

  • Form B1: For tax resident individuals
  • Form B: For self-employed individuals
  • Form M: For non-resident individuals

Step 3: Log In to myTax Portal

  • Log in to myTax Portal using your SingPass or IRAS Unique Account
  • Tap on the “Individuals”>”File Income Tax Return”
  • Simply follow the instructions

Note: Your session will expire if you leave the page idle for more than 20 minutes. If this happens, you’ll need to log in to the portal again.

Step 4: Provide or Verify Your Income, Deductions, and Relief Statement (IDRS)

You’ll need to provide details, including your income, deductions, and reliefs. If your employer participates in the Auto-Inclusion Scheme, these details will be pre-filled. All you have to do is verify the information.

IRAS will pre-fill the following information in your IDRS:

  • All income, deductions, and reliefs information provided by participating organizations directly to IRAS.
  • Rental income based on your declaration in the previous year’s Income Tax Return or e-stamped tenancy records
  • Reliefs given to you in the previous year

Double-check for any discrepancy. In case of errors, the participating organization will need to resubmit the information to IRAS. In the meantime, you can proceed to e-File your Income Tax Returns by 18 April every year.

Step 5: Update Existing Tax Reliefs

If you qualify for additional or new tax reliefs, you need to include your claims. For instance, if you have a newborn child, you must update your claims. Additionally, if you no longer qualify for previously claimed reliefs (e.g. course fees), you need to remove it.

Enter your deductions/reliefs in the boxes provided. You can also click on the links to:

  • Remove the pre-filled reliefs that you no longer qualify for
  • Change the amount of reliefs that are shared with other claimants
  • Make new claims for deductions/reliefs

Step 6: Declare Other Sources of Income (If Any)

For instance, if you have rental income from your property, you need to declare it.

  • Click “Yes, I need to edit my Tax Form” to declare additional sources of income or if you need to make any changes to the pre-filled information.
  • Click “No, I have nothing to declare other than the information shown in the IDRS above” if you don’t have other sources of income/deductions/reliefs to declare. This will submit your Income Tax Return.

Step 7: Receive Acknowledgement Receipt

After filling up the details, you will be redirected to an acknowledgment page. Don’t forget to save or print a copy.

You’ve successfully filed your Singapore income tax, what now?

IRAS will confirm and send you a tax bill between May and September. This document is called Notice of Assessment (NOA).

agent sorting clients income tax

Things You Need To Know About Personal Income Tax in Singapore

Who Needs To Pay Income Tax in Singapore?

All individuals earning, deriving, or receiving income in Singapore need to pay their yearly income taxes, according to the Inland Revenue Authority of Singapore (IRAS). For the year of assessment (YA) 2022, you must pay for all income earned in 2021.

If you are specifically exempted under the Income Tax Act or by an Administrative Concession, you do not need to pay tax.

That said, you are required to pay taxes for any particular Year of Assessment if:

Nationality:

  • Singapore Citizen (SC) or Singapore Permanent Resident (SPR) who resides in Singapore except for temporary absences; or
  • A foreigner who has stayed/worked in Singapore (excluding the director of a company) for 183 days or more in a year preceding the YA.

For Foreigners working in Singapore, the following conditions are applicable for the taxability of their income earned or received in Singapore:

# of days the Foreigner stayed or worked in Singapore

Taxable income

60 days or less

Exempt from tax

61 to 182 days

15% income tax or resident rates for individuals

(whichever gives the higher tax)

183 days or more

Taxed at resident rates for individuals

At least 183 days over two years

Taxed at resident rates for individuals

Three consecutive years

Income for all years will be taxed at resident rates

Circumstances:

  • Derive or receive income in Singapore from:
    • Full-time job
    • Business as a sole proprietor
    • Freelance job
    • Investments in Singapore
  • Work outside Singapore but your employment status is under Singapore
  • Earn a gross income of S$22,000 or more in a year

Taxable & Non-Taxable Income

Income in Singapore can be taxable or non-taxable. Generally, taxable income pertains to income accrued or derived from Singapore. Non-taxable income, on the other hand, doesn’t need to be taken into account when filing taxes. Do you know that income from cryptocurrency are also taxable? Find out more in Singapore Crypto Tax Regulations 2022.

Here are some examples of taxable income in Singapore:

Type of Income

Details

Income from Employment

Employment income

-Salary, bonus, director’s fee, commission, and others

-Income received from overseas

-Retirement benefits

-Gains from the exercise of stock options

-Pension

-Retrenchment benefits

Income From Trade, Business, Profession, Or Vocation

Self-employed, partnership or trade, business, profession, vocation income

Includes gig work and freelance income

Income received from overseas

Overseas income received in Singapore must be reported in your tax return

Income received in the form of Government Grands

Check if these payouts will be auto-included in your tax return

 

-Special Employment Credit

-Jobs Support Scheme

-Wage Credit Payout

-COVID-19-related payouts

Income received in the form of virtual currencies

-Businesses that accept digital tokens are subject to normal Income Tax rules

Income From Property Or Investments And Other Sources

Rent from property

Report rental income and claim rental expenses

Dividends

Taxable dividends must be reported in your tax return

Interest

Taxable interests must be reported in your tax return

Gains from the sale of property, shares, and financial instruments

Taxable gains must be reported in your tax return

Income From Other Sources

Annuity (recurring annual payments)

Taxable annuities must be reported in your tax return

Estate/Trust Income

Estate/trust income received in Singapore from an estate under administration or trust is taxable

Royalty

Royalties are taxable through tax concessions are available

Withdrawals from Supplementary Retirement Scheme (SRS)

Different tax rates apply depending on the year of your withdrawal

Source: IRAS

Non-Taxable Income in Singapore

  • Capital gains from stocks and property investments
  • CPF Life Payouts
  • National service housing, medical, and education award
  • Winnings from 4D, TOTO, horse betting, and soccer betting

How Much Income Tax Do You Need To Pay?

Personal income tax in Singapore is based on the individual’s income bracket on a progressive structure. Additionally, your personal income tax will depend on your tax residency status. Before we take a look at resident personal income tax rates, here are a few things you need to know:

  • Filing a personal tax return for tax residents is mandatory if your annual income is S$20,000 and more.
  • Tax residents do not need to pay tax if their annual income is less than S$20,000.

Resident Tax Rates

Chargeable Income

Rate (%)

Gross Tax Payable ($)

On the first 20,000

On the next 10,000

0%

2%

$0

$200

On the first 30,000

On the next 10,000

3.50%

$200

$350

On the first 40,000

On the next 40,000

7%

$550

$2,800

On the first 80,000

On the next 40,000

11.5%

$3,350

$4,600

On the first 120,000

On the next 40,000

15%

$7,950

$6,000

On the first 160,000

On the next 40,000

18%

$13,950

$7,200

On the first 200,000

On the next 40,000

19%

$21,150

$7,600

On the first 240,000

On the next 40,000

19.5%

$28,750

$7,800

On the first 280,000

On the next 40,000

20%

$36,550

$8,000

On the first 320,000

In excess of 320,000

22%

$44,550

Source: IRAS

Non-Resident Tax Rates

Type of Income

Non-resident individual tax rate / withholding tax rate from YA 2017

Director’s remuneration

22%

Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)

15% of gross income or 22% of net income

Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)

10% concessionary rate (No change)

Other income e.g. rental income derived from a Singapore property

22%

SRS withdrawal by a non-citizen SRS member

22%

Interest, royalty, etc.

Reduced final withholding tax rate (subject to conditions) as follows:

Interest: 15%

Royalty: 10%

OR

22% if the reduced final withholding tax rate is not applicable.

Pension

22%

Schedule of Filing

Income tax filing starts from 1 March to 18 April every year. You are required to file your annual personal tax returns to IRAS by e-filing during this period. Please comply to avoid paying fines and/or court prosecution.

The assessment is for the total income earned in the preceding year. For example, in 2022, you will be filing taxes for the income you received or derived in 2021.

If you prefer paper filing (by mail), you will need to submit your completed tax form to the IRAS headquarters by 15 April.

1. What Happens if You Missed the Deadline and Failed To Pay Your Tax on Time?

Most taxpayers pay their taxes on time. The payment due date is 1 month from the date of the Notice of Assessment (Tax Bill).

In the event you miss the deadline or failed to pay your tax, IRAS will take the following actions:

  • Impose late payment penalties
  • Appoint agents like your bank, employer, tenant, or lawyer (handling the sale of any of your property) to recover the overdue tax.
  • Issue a Travel Restriction Order (TRO) to prevent you from leaving Singapore
  • Take legal action

2. How To Appeal for a Waiver of Late Payment Penalty

You can appeal for a waiver of late payment penalty online via the Request Penalty Waiver/Extension of Time to File digital service. Simply log into your myTax Portal.

Appeals will be considered if:

  • You have paid the overdue tax in full by the due date as stated in the late payment penalty notice. The payment must be reflected in your tax account.
  • No waiver has been granted in the past 2 calendar years up to date.

3. How To Check Tax Balance and Make Payment

  1. Log in to mytax.iras.gov.sg.
  2. Click “View Account Summary”.

You can make payments via:

  • GIRO
  • Mobile banking (PayLah! or PayNow)
  • Internet banking
  • AXS e-stations or m-stations
  • SAM payment networks
paying income tax

Tips To Save Personal Income Tax

Singapore’s personal income tax rates are one of the friendliest in the world. It is based on a progressive structure which means the more you earn, the more you’ll be taxed. Thankfully, you can claim tax deductions and reliefs. However, the personal income tax relief you can claim is capped at S$80,000 in any given year of assessment.

So what are other ways to legally reduce Singapore income tax?

1. Save for Retirement

One of the easiest and best ways to reduce your taxes is to top up your retirement account. When you put S$1 into your retirement account, you’ll get S$1 deducted from your taxable income.

Want to save on taxable income for YA 2022? Unfortunately, it’s too late. CPF top-ups should have been done by 31 December 2021.

Take a look at the tax relief caps from 1 Jan 2022

Tax Reliefs

Maximum Amount

CPF Top Up (your SA)

$8,000, capped at current FRS

CPF Top Up (loved ones’ SA/RA)

$8,000, capped at current FRS

CPF Top Up (your Medisave)

$8,000, capped at current BHS

Put money in SRS account

$15,300 (Singaporean) or $35,700 (foreigner)

2. Upgrade Your Skills by Taking On a Course

Did you know that you can get tax relief on courses that you have attended in 2021? Here are a few conditions:

  • The course must be relevant to your current job
  • Prove that you paid for the course yourself

With the Course Fees Relief, you can claim the amount you spent on the course and exam fees. You can get up to S$5,000 in tax relief and have it deducted from your taxable income.

What if you took a course to switch careers? You can still claim tax relief.

How to claim:

  • Go to “Edit My Tax Form”
  • Then go to “Deductions, Reliefs, and Parenthood Tax Rebate”
  • Choose “Course Fees”
  • Enter the claim amount and update the form

3. Donate to Charities

Getting tax relief when donating to charities is an added bonus. When you make a donation to any charity that is registered as an IPC (Institute of a Public Character) in Singapore, you can enjoy a 250% tax reduction based on the amount you donated. The deductions are applied the following year.

For instance, if you donated S$10,000 you get 250% x S$10,000 = S$25,000 taken off your taxable income. If you donated this year, you can get tax relief for YA 2023.

Closing

Filing taxes shouldn’t be intimidating. As part of adult life, it can be challenging but it gets easier once you understand how the system works.

Key takeaways

  • All individuals earning, deriving, or receiving income in Singapore need to pay their yearly income taxes
  • You are required to pay taxes if you earn a gross income of S$22,000 or more in a year.
  • You can pay your personal income tax via electronic filing (online) or paper filing (by mail).
  • Legally reduce your income taxes by topping up your CPF, donating to charities, or taking a course related to your employment.

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