Personal income tax residents in Singapore pay tax at some of the lowest individual income tax rates in the world. This means that for those of you who enjoy a high employment income, investment income or chargeable income, there are few places on the planet better to be.
That said, while Singaporean tax residents pay attractive progressive resident tax rates, the income tax outlook in the city-state is a little complicated, and it’s important to properly understand not only income tax rates, but the various personal reliefs and tax residency rules that apply.
In this article, Loan Advisor runs through everything you need to know about Singapore income tax rates, tax filing procedures, tax exemptions, and a whole lot more.
What is the Personal Income Tax Rate in Singapore?
Personal income tax rates in Singapore are dependent on an individual’s tax residency status. As a general rule of thumb, Singapore operates progressive resident tax rates ranging from 0% to 22%, but your gross tax payable will vary according to whether you qualify as:
- A Singapore tax resident
- Non resident individuals
At the time of writing, Singapore citizens, Singapore Permanent Resident status-holders and any foreigners who have been working or living in Singapore for 183 days or more qualify as tax residents. Let’s take a look at the latest individual income tax rates and gross tax payable for people who fall into these two groups:
Personal Income Tax Rates
If you are classed as a tax resident in Singapore, you’ll pay income tax rates of between 0% and 22%. Ultimately, whether you fall at the upper or lower end of the scale will depend on your chargeable income. Your taxable income will be taxed as follows:
- First $20,000 – 0% tax rates apply
- Next $10,000 up to $30,000 – 2% tax rates apply
- Next $10,000 up to $40,000 – 3.5% tax rates apply
- Next $40,000 up to $80,000 – 7% tax rates apply
- Next $40,000 up to $120,000 – 11.5% tax rates apply
- Next $40,000 up to $160,000 – 15% tax rates apply
- Next $40,000 up to $200,000 – 18% tax rates apply
- Next $40,000 up to $240,000 – 19% tax rates apply
- Next $40,000 up to $280,000 – 19.5% tax rates apply
- Next $40,000 up to $320,000 – 20% tax rates apply
- Taxable income above $320,000 – 22% tax rate applies
As you can see, low earners in Singapore will pay no tax at all, while gross tax payable will increase incrementally for every $10,000 or $40,000 thereafter, with those in each tax bracket paying slightly higher tax than the last. It’s worth noting that from April 2024, the highest tax rates will be increased for high-earning tax residents. A 23% rate for those earning between $500,000 and $1 million will be introduced, alongside a 24% rate for Singaporeans bringing in $1 million or more.
Tax for Non Residents
Conversely, non resident individuals – currently classed as anyone who has been working or living in Singapore for 183 days or less – will pay income tax rates that vary between 15% and 22%. The latest rates for non residents are as follows:
- Foreigners who have been in SG for 60 days or less – 0%
- Foreigners who have been in SG for 61 to 182 days – Either a flat rate of 15% or a progressive tax rate capped at 22% applies (whichever is higher)
When it comes to non resident individuals, it’s also important to note that certain taxable income types will be taxed at a 15% to 22% rate regardless of the non resident individual’s length of stay. Such income types, known as “non exempt income”, include:
- Director’s fees – which are taxed at 22%
- Income earned as a trainer, coach, or consultant – which is taxed at 15%
- Income earned as a public entertainer – which is also taxed at 15%
Tax on Foreign Income, Overseas Income and Foreign Employment Income
Unlike many other countries, Singapore does not levy any taxes on foreign-sourced income, including when you receive employment income from overseas employment into a Singapore bank account.
That said, there are a few circumstances under which foreign income or overseas income received is still subject to personal taxes in Singapore. These unique circumstances include:
Working In Singapore for a Foreign Employer
Singapore will tax employment income earned from a foreign employer if the work you carry out is conducted here in Singapore.
Any Overseas Employment Income Related to Singapore Employment
If you travel or work outside of Singapore as part of a Singapore-based role, the employment income you receive will constitute taxable income.
Income Derived from a Partnership in Singapore
Unless an exemption applies, the above is also classed as chargeable income for tax purposes.
Professional, Technical and Consultancy Employment Income
If earned overseas or in a temporary location that doesn’t qualify as a “fixed place of operation”, any income earned via professional, tech, or consultancy services is taxable, too.
Employment Income Derived from Government-Related Work
Singapore will tax employment income earned outside of Singapore if earned while working for the Singaporean government.
What Kind of Income is Subject to Singapore Income Tax
Generally speaking, there are several types of income subject to income tax in Singapore. This includes virtually all kinds of employment income, such as:
- Wages or salary
- Cash remuneration
- Leave pay
- Director’s pay and bonuses
- Gratuities and perquisites
- Income derived from employee share plans and allowances
- Employer-provided houses and automobiles
How is Taxable Income Calculated for Income Tax Purposes?
Anything classed as chargeable income, or “taxable income” is liable for income tax in Singapore – but how exactly is chargeable income calculated?
Well, “taxable income” is effectively made up of your net income after expenses, reliefs and donations have been removed from the total, which is why it’s important to understand the various reliefs and exemptions that may be available to you. Learn more on how to calculate your gross salary.
The Inland Revenue Authority of Singapore or IRAS calculates taxable income as follows:
- Total Income Minus Expenses = “Statutory Income”
- Statutory Income Minus Donations = “Assessable Income”
- Assessable Income Minus Personal Reliefs = “Taxable Income”
Your total income is made up of any profits earned from business, trade, work etc. Any other employment-related benefits will also be included. Expenses are usually then broken down into two categories – employment-related and rental-related. But what about exempted income?
Income Exempted from Singapore Income Tax
If you receive employment income or business income in Singapore, you can pretty much bet that income subject to tax. That said, there are a select few income sources that are eligible for exemptions under the Income Tax Act and other tax legislation, such as:
Any dividends issued by Singapore-based companies are exempted from your tax bill. Some dividend business income received from Hong Kong or Malaysia-based corporations may also apply.
Estate duty or “inheritance tax” was officially scrapped in Singapore in 2008. This means that common estate assets such as immovable property, Singapore bank account, publicly listed shares and more do not incur estate duty or tax.
Income Derived from Capital Gains
Here in Singapore, the sales of fixed assets, stocks, bonds, or anything else that can feasibly be deemed “capital gains” are not subject to capital gains tax (as might be the case in other nations).
We’ve said it before, and we’ll say it again – Singapore offers a very favourable tax system for higher earners who might otherwise need to pay significantly higher tax elsewhere. On top of the lower-than-average personal tax rates on offer, the Inland Revenue Authority of Singapore also offers a comprehensive set of tax deductions that Singaporeans (and foreigners living here) can claim. These include:
Singapore Employment Income Expenses
Every nation’s Revenue Authority allows taxpayers to offset expenses to a certain extent, but the Inland Revenue Authority of Singapore takes things a step further. In short, you are free to deduct any employment income expenses so long as said expenses:
- Have not already been reimbursed by your employer
- Were incurred while fulfilling the requirements of your role
- Were not used for personal use
- Did not constitute a capital expenditure
Such expenses could include the likes of taxi services, medical reimbursements, meal expenses, transport expenses and even housing expenses, if they can be feasibly related to your Singapore employment.
Personal Reliefs Related to Self-Improvement
In addition to the above, Singapore tax residents can also claim tax rebates for a number of self-improvement related items. Such items include:
- CPF and SRS Personal Reliefs – You can claim earned income relief when setting some of your earnings aside for retirement with either CPF or the Supplementary Retirement Scheme (SRS).
- Study / Course Fee Relief – When studying to boost your skills and employability, you can potentially claim personal reliefs in the form of reimbursed tuition fees.
Donations and Charitable Giving
Singaporeans can reduce their personal tax liability and ultimately pay lower personal tax rates though charitable giving, too. This is because you can claim donations made to charitable organisations as deductions or personal reliefs.
Cash donations, shares donations, artifact donations and land and building donations all apply.
Angel Investment Income
Any investment income derived from investments made in new start-ups or innovative companies are also deductible, however:
- The angel must hold their investment for two years or more.
- The angel must invest a minimum of $100,000 within 12 months.
Rental Income Expenditure
You might also be able to claim for rental income expenses if such expenses were incurred solely for the purpose of obtaining rental income – but only if said expenses occurred while your rental property was occupied by a tenant.
How to Pay Tax – Filing Your Singapore Income Tax and Understanding Payment Procedures
Now you understand a little bit more about tax rates, exemptions, and deductions, let’s review the process for actually filing your taxes in Singapore. Put simply, tax residents and non residents who are eligible for income tax will have an individual tax liability each tax year and will need to hit one of two tax filing deadlines.
If you prefer to pay tax online, Singapore’s E-filing deadline falls on April 18 each calendar year. But if you’d rather submit a paper tax form, you’ll need to do so a little earlier – by April 15, to be exact.
Every new tax year, you’ll need to file a return based on the income you accumulated from January 1 to December 31 the previous tax year. So, if you’re filing in 2022, your return should be relevant to your January to December 2021 income.
Which Tax Forms Do You Need to Complete?
IRAS requires different types of taxpayers to complete different types of tax forms when filing their taxes. Your unique tax situation will depend on your occupation and tax residency status, so before you get started, you should double check with IRAS here which rules apply to you.
Under most circumstances, you’ll need to file one of the below forms:
- Form B1 – for Employed Individuals
- Form B – for Self-Employed Individuals
- Form M – for Non-Resident Individuals
Don’t forget that if you earned less than $22,000 in the previous tax year, you will still be required to submit a tax return – you just won’t be charged a tax bill.
What Happens After I Have Filed My Return?
Once your tax return has been submitted to IRAS, you’ll need to wait for your Notice of Assessment or “NOA” – which will usually be issued to you between May and September. When this document comes through, you have two choices. You can either:
- Pay the taxes due within 30 days
- Submit an Objection of Assessment to IRAS within 30 days
The latter option is designed for those who wish to contest the bill amount they have been quoted. Just don’t forget that if you do choose to file an Objection of Assessment, you’ll still be obligated to pay your bill in full within the 30-day period, or else you may be issued with a tax penalty.
Frequently Asked Questions (FAQs) About Income Tax and Taxes in Singapore
1. How Much is Personal Income Tax in Singapore?
Income tax rates in Singapore are dependent on your tax residency status and your income. The amount you’ll ultimately pay is influenced by numerous factors, such as whether you are a tax resident or not, how much you earn per year and what kind of tax relief you will be claiming.
2. What is the Singapore Income Tax Rate for Personal Income Tax?
In Singapore, personal tax rates range from 0% to 22% for those with tax residency status. For non residents, you’ll pay a flat rate of between 15% and 22%. Your individual tax liability and the rate you will ultimately pay is dictated by your income, expenses, and personal circumstances.
3. What Are Common Income Tax and Personal Tax Filing Mistakes?
The most common mistakes Singaporeans tend to make when filing their tax returns include incorrect income declarations, incorrect document submissions, incorrect deduction claims and incorrect CPF contribution claims. Be sure to always double-check your return prior to filing.
4. What are Singapore’s Personal Tax Returns and Personal Income Tax Filing Deadlines?
You’ll need to submit your tax return to IRAS by 15 April if you are filing by paper, or by 18 April if you are filing your return online. It’s important to submit on time if you wish to avoid incurring a penalty.
5. What Categories Besides Income are Subject to Income Tax?
On top of traditional salaries and company bonuses, it’s important to remember that the likes of perquisites, housing and stock options will also count as taxable income for employment purposes in Singapore.
6. Can I Make Changes to My Tax Return After I’ve Filed It?
Yes – IRAS allows Singaporeans to re-file their tax return via myTax Portal if mistakes have been made which need to be corrected. Just keep in mind that any corrections must be resubmitted within 14 days of sending in your initial tax return.
7. Do Self-Employed Singaporeans Need to File Taxes?
Yes – if you are self-employed, you’ll need to declare your business income to IRAS once a year. It’s important to keep detailed records of your accounts and business transactions, and to attach invoices, receipts, and other supporting documents to your tax return at the point of filing. This is especially true if you have selected automated filing – you’ll want to double check your return pre-submission just to be on the safe side.
8. How Long After Filing My Tax Return Must I Wait for My Notice of Assessment?
After you have formally submitted your completed tax return to IRAS, you should need to wait no longer than a few months for your Notice of Assessment or “NOA”. Under most circumstances, this will usually be issued to you between May and September – but you should get in touch with IRAS if it takes any longer.
Understanding Employment Income Tax and Personal Income Tax in Singapore
Getting to grips with personal taxes in Singapore is no easy task. The amount you’ll ultimately pay when you come to filing your annual return will depend on your residency status, local and overseas income and much more, so it’s important to properly understand your unique tax situation and the various reliefs available to you. Don’t forget that:
- A progressive resident tax rate applies in Singapore, which starts at 0% and ends at 22% for higher earners making above S$320,000 per year.
- Non tax residents have a slightly different status to a Singapore Permanent Resident or citizen. Instead, foreigners living in Singapore are taxed at a rate that can range from 15% to 22%.
- At the time of writing, Singapore does not levy taxes on capital gains, dividends, or inheritance.
- Foreign sourced income is usually exempt from taxes levied by IRAS, though there are a few small exceptions to this rule – so make sure you’re aware of these.
- It’s important to submit your tax return in good time to avoid any penalties, and to take full advantage of the various reliefs that may be available to you.
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