Individuals are required to file annual income tax returns to the Inland Revenue Authority of Singapore (IRAS) and pay income tax at the prevailing Singapore personal IRAS income tax rate charged on chargeable income. Chargeable income is defined as total taxable income less deductible expenses. The final IRAS tax rate will then be levied on the chargeable income which will work out the final tax amount payable to the tax authorities.  

Singapore Individual Income Tax Rate – Tax resident

Singapore’s personal income tax rates are among the lowest in the world. Individuals will need to be assessed for their tax residency status. A tax resident is one who is a Singapore Citizen or a Singapore Permanent Resident or foreigner that has worked for more than 183 days in the calendar year. Individuals that do not fall under the above-mentioned criteria are classified as non-tax residents.

Tax residents in Singapore are taxed at a progressive tax rate structure. This is based on the annual chargeable income that an individual earns for any particular year of assessment (YA). The higher the incremental income earned, the higher the tax rate applied on the incremental difference in income. Below is a snapshot table of the tax rate for individual tax residents:

Chargeable Income Income Tax Rate
First SGD20,000 0%
Next SGD10,000 2%
Next SGD10,000 3.5%
Next SGD40,000 7%
Next SGD40,000 11.5%
Next SGD40,000 15%
Next SGD40,000 18%
Next SGD40,000 19%
Next SGD40,000 19.5%
Next SGD40,000 20%
All amount in excess of SGD320,000 22%

 

For example, during the year if your employment income (normal monthly salary, bonus and taxable allowances) less relief is SGD130,000, the total income tax payable would amount to SGD9,450, at an effective tax rate of 5.25%:

Chargeable Income Income Tax Rate Income Tax Payable
First SGD20,000 0% Nil
Next SGD10,000 2% SGD200
Next SGD10,000 3.5% SGD350
Next SGD40,000 7% SGD2,800
Next SGD40,000 11.5% SGD4,600
Next SGD10,000 15% SGD1,500
Total SGD180,000 Effective rate 5.25% SGD9,450

 

Singapore Individual Income Tax Rate – Non-Tax resident

Employment income is exempted from tax if a foreigner is employed on a short term basis for less than 60 days in a year. This exemption does not apply for directors of a company or a public entertainer in Singapore. Other professionals including foreign experts or speakers, queen’s counsels, consultants and trainers are also not exempted from employment income tax.

If a foreigner is in Singapore for 61-182 days in a year, he or she will be taxed on all income earned in Singapore. Certain qualified expenses or donations may be deducted from the income earned. However, personal reliefs are not allowed to be claimed. The employment income is taxed at a 15% flat rate or the progressive tax resident IRAS income tax rate (per the table above), whichever gives a higher tax amount. Director fees and remuneration, consultant fees and all other incomes are taxed at a range of 15% to 22%.

It should be noted that there is no capital gains tax or inheritance tax in Singapore. These are deemed to be capital in nature, hence nil tax rate applied.

All individual taxpayers are required by law to file income tax returns. Consulting a qualified tax professional may be a good option to ease your individual tax filing procedures to ensure full compliance of IRAS rulings and best possible income tax outcome.

Esther Mok
Esther Mok Tax Principal , Paul Wan & Co.
Esther Mok is a Fellow member of The Association of International Accountants, UK and an Approved Accredited Tax Advisor specializing in both Income Tax and GST with Singapore Institute of Accredited Tax Professionals (SIATP). She has behind her more than 20 years of tax experience dealing with international and local clients.
em@pwco.com.sg
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Esther Mok
Esther Mok Tax Principal , Paul Wan & Co.
Esther Mok is a Fellow member of The Association of International Accountants, UK and an Approved Accredited Tax Advisor specializing in both Income Tax and GST with Singapore Institute of Accredited Tax Professionals (SIATP). She has behind her more than 20 years of tax experience dealing with international and local clients.
em@pwco.com.sg
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