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Personal Income Tax
Personal Income Tax
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Personal Income Tax Services Singapore
This post covers everything you need to know about personal tax services in Singapore. According to a recent survey, Singapore’s income tax rate is relatively lower than most countries across the world. This is why the country is a good work location for professionals across the globe.
Resident and Non-resident Tax Rates
The Singapore income tax rate is progressive in nature, according to the Singapore Income Tax Act. Progressive individual tax rate in Singapore means that the tax rate increases with a rise in the individual’s income. However, many forms of personal income, such as income from estate duty, dividends, capital gains, etc., are not taxed at all.
Resident and non-resident tax rates in Singapore are extremely attractive compared to other countries across the world.
The tax on income earned in the preceding year is based on the residential status of an employee. An individual is resident for tax purposes if he/she is:
- A resident citizen of Singapore (RC)
- A Permanent Resident of Singapore (PR)
- A foreigner working in Singapore for a period exceeding 183 days
Resident Tax Rates Singapore
For resident individuals, the Singapore income tax rate ranges from 0-22%. Any income above $320,000 is taxed at a rate of 22%, while income below $20,000 is not subjected to tax. However, since the income tax return in Singapore is progressive, the tax increases with a rise in income starting from 0% to 22%.
With effect from YA 2024, the Singapore income tax rate for resident individuals will range from 0-24%. Any income above $1,000,000 will be taxed at a rate of 24%, while income below $20,000 will remain untaxed. Due to the progressive income tax return in Singapore, the tax increases with an rise in income starting from 0% to 24%.
Individuals pay tax on income earned during the preceding year in Singapore. The following are the tax rates depending on the income of the individual:
| TAXABLE INCOME | Before 2016 | 2017 to 2023 | 2024 onwards |
|---|---|---|---|
| First $20,000 | 0.0% | 0.0% | 0.0% |
| $30,000 | 2.0% | 2.0% | 2.0% |
| $40,000 | 3.5% | 3.5% | 3.5% |
| $80,000 | 7.0% | 7.0% | 7.0% |
| $120,000 | 11.5% | 11.5% | 11.5% |
| $160,000 | 15.0% | 15.0% | 15.0% |
| $200,000 | 17.0% | 18.0% | 18.0% |
| $240,000 | 18.0% | 19.0% | 19.0% |
| $280,000 | 18.0% | 19.5% | 19.5% |
| $320,000 | 18.0% | 20.0% | 20.0% |
| $500,000 | 20.0% | 22.0% | 22.0% |
| $1,000,000 | 20.0% | 22.0% | 23.0% |
| Above $1,000,000 | 20.0% | 22.0% | 24.0% |
Non-Resident Tax Rates Singapore
Taxable Income
Working for up to 60 days in Singapore
Employed for 61-182 days in Singapore
Tax Types and Tax Rates
| Tax Type | Resident | Non-Resident |
|---|---|---|
| Income tax | 0-22% (depends on taxable income) Note: 0-24% from YA 2024 onwards | 15-22% (based on the number of days the individual worked in Singapore) Note: 15-24% from YA 2024 |
| Capital gains tax | Not taxable | Not taxable |
| Tax on dividend income | Not Taxable | Not Taxable |
| Estate duty | Not Taxable | Not Taxable |
| Rental income tax | Taxed at resident rates and included in individual’s total taxable income | 22% |
| Tax on interest | Taxed at resident rates and included in an individual’s total taxable income. NOTE: all interests received from Licensed Finance Companies or Singapore Banks are not taxable | 15% |
| Tax on royalties | Taxed at resident rates and included in individual’s total taxable income | 10% |
| Tax on freelance income | Taxed at resident rates and included in individual’s total taxable income | Taxed at non-resident rates and included in an individual’s total taxable income. |
| Withholding tax | Not taxable | This generally depends on the type of payments made to the non-resident.
The non-resident tax rate will differ if Singapore has entered into a DTA with the country where the non-resident resides. |
Non-Taxable Income in Singapore
The following are non-taxable incomes in Singapore:
- Capital Gains Tax: This refers to all personal gains of individuals or gains on capital transactions such as stocks or profit from the sale of a fixed asset.
- Estate Duty: In Singapore, an individual’s estate includes
- Everything owned in the individual’s name
- The individual’s share of jointly owned assets
- All gifts made within five years before the death of the individual
- Any asset in a trust from which the individual receives personal profit
- Dividend Income: Dividend refers to an individual’s profit from his shareholding in a company. In Singapore, the dividend paid by resident companies to shareholders is non-taxable. The exemption of tax on dividend, estate duty, and capital gains tax makes the country an attractive place for investors.
Tax on Foreign Income
Generally, all foreign income paid to individuals in Singapore is not taxable. This is because the source of the income is from an overseas country and not Singapore. For instance, the employment of an individual in an overseas office will not be taxable in Singapore as the source of employment income is overseas and not Singapore.
However, the following types of overseas income are taxable in Singapore:
- Receipt of service income
- An Individual’s trade or business is in Singapore, and the individual has a trade or business overseas incidental to the Singapore trade.
- Employment of an individual overseas on behalf of the Singapore Government.
- The job the individual does overseas is incidental to the job in Singapore. This means that if part of the work done overseas is, in fact, a part of an individual’s employment in Singapore, it will be taxable.
- If the overseas income is received through a partnership in Singapore.
Double Tax Avoidance
To avoid a situation where residents and non-residents may be subject to tax both in Singapore and in foreign countries, Singapore has an extensive set of DTAs. This refers to Singapore’s robust network of double tax avoidance treaties with other countries. Therefore, individuals can apply to avoid tax on the same income twice.
Tax Deductions
Tax deductions include all expenses, reliefs, and donations, which an individual can claim to reduce their tax burden. When computing taxable income, an individual can claim the following deductions:
- Employment deductions: This includes all expenses an individual incurs in the course of employment. The expense must be incurred while carrying out official duties before it can be considered as employment expenses. It includes the following:
- Meal allowances
- Housing allowances
- Medical reimbursements
- Car services
- Transport allowances
- All donations made to charitable organizations by the individual
- Allowable expenses the individual incurs on rental income: The total amount of rental income after the deduction of all allowable expenses such as repairs and maintenance, fire insurance, property tax, etc., will be subject to tax.
- Tax rebates and reliefs that the government provides for an individual’s personal development. This includes:
- Course Fee relief – To help employees upgrade their skills.
- Supplementary Retirement Scheme (SRS) relief – To encourage individuals to save for old age.
- CPF Cash Top-up Relief – To encourage employees to set aside funds for their retirement.
Filing of Income Tax Return Singapore
Individuals have to file for their tax returns through forms available on IRAS. The type of forms depends on the residential and occupational status of the individual.
- Form B1 – Employed individuals
- Form B – Self-employed individuals
- Form M – Non-resident individuals
Deadline
Filing Tax Returns: An individual can file for tax returns when annual earnings are above $22,000. In Singapore, every individual required to pay tax will need to file a tax return annually by April 15. The annual tax filing can be done manually or electronically. In the case of e-filing, the deadline is April 18. The best time to file for annual tax returns in Singapore is between March 1 to April 18.
Payment of taxes: Once an individual files the tax return, he/she will receive an NOA (Notice of Assessment) by September stating the tax amount payable. The tax is payable within a period of 30 days from the date of notice. However, the individual can choose to pay in installments.
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This post covers everything you need to know about personal tax services in Singapore. According to a recent survey, Singapore’s income tax rate is relatively lower than most countries across the world. This is why the country is a good work location for professionals across the globe.
The Singapore income tax rate is progressive in nature, according to the Singapore Income Tax Act. Progressive individual tax rate in Singapore means that the tax rate increases with a rise in the individual’s income. However, many forms of personal income, such as income from estate duty, dividends, capital gains, etc., are not taxed at all.
Resident and non-resident tax rates in Singapore are extremely attractive compared to other countries across the world.
The tax on income earned in the preceding year is based on the residential status of an employee. An individual is resident for tax purposes if he/she is:
- A resident citizen of Singapore (RC)
- A Permanent Resident of Singapore (PR)
- A foreigner working in Singapore for a period exceeding 183 days
For resident individuals, the Singapore income tax rate ranges from 0-22%. Any income above $320,000 is taxed at a rate of 22%, while income below $20,000 is not subjected to tax. However, since the income tax return in Singapore is progressive, the tax increases with a rise in income starting from 0% to 22%.
With effect from YA 2024, the Singapore income tax rate for resident individuals will range from 0-24%. Any income above $1,000,000 will be taxed at a rate of 24%, while income below $20,000 will remain untaxed. Due to the progressive income tax return in Singapore, the tax increases with an rise in income starting from 0% to 24%.
Individuals pay tax on income earned during the preceding year in Singapore. The following are the tax rates depending on the income of the individual:
| TAXABLE INCOME | Before 2016 | 2017 to 2023 | 2024 onwards |
|---|---|---|---|
| First $20,000 | 0.0% | 0.0% | 0.0% |
| $30,000 | 2.0% | 2.0% | 2.0% |
| $40,000 | 3.5% | 3.5% | 3.5% |
| $80,000 | 7.0% | 7.0% | 7.0% |
| $120,000 | 11.5% | 11.5% | 11.5% |
| $160,000 | 15.0% | 15.0% | 15.0% |
| $200,000 | 17.0% | 18.0% | 18.0% |
| $240,000 | 18.0% | 19.0% | 19.0% |
| $280,000 | 18.0% | 19.5% | 19.5% |
| $320,000 | 18.0% | 20.0% | 20.0% |
| $500,000 | 20.0% | 22.0% | 22.0% |
| $1,000,000 | 20.0% | 22.0% | 23.0% |
| Above $1,000,000 | 20.0% | 22.0% | 24.0% |
Taxable Income
Working for up to 60 days in Singapore
Employed for 61-182 days in Singapore
| Tax Type | Resident | Non-Resident |
|---|---|---|
| Income tax | 0-22% (depends on taxable income) Note: 0-24% from YA 2024 onwards | 15-22% (based on the number of days the individual worked in Singapore) Note: 15-24% from YA 2024 |
| Capital gains tax | Not taxable | Not taxable |
| Tax on dividend income | Not Taxable | Not Taxable |
| Estate duty | Not Taxable | Not Taxable |
| Rental income tax | Taxed at resident rates and included in individual’s total taxable income | 22% |
| Tax on interest | Taxed at resident rates and included in an individual’s total taxable income. NOTE: all interests received from Licensed Finance Companies or Singapore Banks are not taxable | 15% |
| Tax on royalties | Taxed at resident rates and included in individual’s total taxable income | 10% |
| Tax on freelance income | Taxed at resident rates and included in individual’s total taxable income | Taxed at non-resident rates and included in an individual’s total taxable income. |
| Withholding tax | Not taxable | This generally depends on the type of payments made to the non-resident.
The non-resident tax rate will differ if Singapore has entered into a DTA with the country where the non-resident resides. |
The following are non-taxable incomes in Singapore:
- Capital Gains Tax: This refers to all personal gains of individuals or gains on capital transactions such as stocks or profit from the sale of a fixed asset.
- Estate Duty: In Singapore, an individual’s estate includes
- Everything owned in the individual’s name
- The individual’s share of jointly owned assets
- All gifts made within five years before the death of the individual
- Any asset in a trust from which the individual receives personal profit
- Dividend Income: Dividend refers to an individual’s profit from his shareholding in a company. In Singapore, the dividend paid by resident companies to shareholders is non-taxable. The exemption of tax on dividend, estate duty, and capital gains tax makes the country an attractive place for investors.
Generally, all foreign income paid to individuals in Singapore is not taxable. This is because the source of the income is from an overseas country and not Singapore. For instance, the employment of an individual in an overseas office will not be taxable in Singapore as the source of employment income is overseas and not Singapore.
However, the following types of overseas income are taxable in Singapore:
- Receipt of service income
- An Individual’s trade or business is in Singapore, and the individual has a trade or business overseas incidental to the Singapore trade.
- Employment of an individual overseas on behalf of the Singapore Government.
- The job the individual does overseas is incidental to the job in Singapore. This means that if part of the work done overseas is, in fact, a part of an individual’s employment in Singapore, it will be taxable.
- If the overseas income is received through a partnership in Singapore.
To avoid a situation where residents and non-residents may be subject to tax both in Singapore and in foreign countries, Singapore has an extensive set of DTAs. This refers to Singapore’s robust network of double tax avoidance treaties with other countries. Therefore, individuals can apply to avoid tax on the same income twice.
Tax deductions include all expenses, reliefs, and donations, which an individual can claim to reduce their tax burden. When computing taxable income, an individual can claim the following deductions:
- Employment deductions: This includes all expenses an individual incurs in the course of employment. The expense must be incurred while carrying out official duties before it can be considered as employment expenses. It includes the following:
- Meal allowances
- Housing allowances
- Medical reimbursements
- Car services
- Transport allowances
- All donations made to charitable organizations by the individual
- Allowable expenses the individual incurs on rental income: The total amount of rental income after the deduction of all allowable expenses such as repairs and maintenance, fire insurance, property tax, etc., will be subject to tax.
- Tax rebates and reliefs that the government provides for an individual’s personal development. This includes:
- Course Fee relief – To help employees upgrade their skills.
- Supplementary Retirement Scheme (SRS) relief – To encourage individuals to save for old age.
- CPF Cash Top-up Relief – To encourage employees to set aside funds for their retirement.
Individuals have to file for their tax returns through forms available on IRAS. The type of forms depends on the residential and occupational status of the individual.
- Form B1 – Employed individuals
- Form B – Self-employed individuals
- Form M – Non-resident individuals
Residents and non-residents need to obey the following deadlines.
Filing Tax Returns: An individual can file for tax returns when annual earnings are above $22,000. In Singapore, every individual required to pay tax will need to file a tax return annually by April 15. The annual tax filing can be done manually or electronically. In the case of e-filing, the deadline is April 18. The best time to file for annual tax returns in Singapore is between March 1 to April 18.
Payment of taxes: Once an individual files the tax return, he/she will receive an NOA (Notice of Assessment) by September stating the tax amount payable. The tax is payable within a period of 30 days from the date of notice. However, the individual can choose to pay in installments.
Frequently Asked Questions on Singapore’s Personal Income Tax
Yes, self-employed individuals in Singapore have to file taxes too. They have to declare their annual business income for the relevant accounting period.
Generally, the accounting period is a 12-month cycle for which profits and losses are computed. It is compulsory to keep comprehensive financial records of all business transactions recorded within the given period.
This should be supported by vouchers, receipts, invoices, and other related documents. At the close of every accounting cycle, it is important to prepare the statements of accounts comprising the balance sheet and profit and loss accounts.
The Singapore income tax rate is between 0 to 22% . The resident and non-resident tax rate in Singapore is between 0% to 22% progressively. The individual tax rate for residents earning an income above S$320,000 per year is 22%, while non-residents are taxed at 15% to 22%. It would be useful to note that the maximum income tax rate will be revised to 24% with effect from YA 2024, with the individual tax rate for income above S$1,000,000 per year being 24%.
Yes, any benefit you receive from your company is subject to personal income tax. However, the tax on the benefit is charged at a reduced rate. You can get more details about the Singapore income tax rate on benefits here.
You can file an income tax return in Singapore if your income exceeds S$22,000 and you were resident in Singapore for more than 60 days during the calendar year. However, the 60-day rule does not apply to CEOs of companies, public entertainers, or existing employees working in Singapore.
You will most likely be taxed as a resident in Singapore since your travel is incidental to your Singapore employment, especially if you’re still holding a valid work permit in Singapore.
Basically, an individual is considered a Singapore tax resident if:
- he/she is physically present for at least 180 days in a calendar year
- he/she worked in Singapore for at least 183 days during the calendar year
This depends on the dividend you’re receiving. Generally, the following dividends are exempted from taxation in Singapore:
- The income from unit trusts and your real estate investment trusts (REIT)
- Dividends from Singapore companies to shareholders
- Foreign dividends received in Singapore, excluding foreign income gotten through partnerships in Singapore
An individual’s tax liability is based on different factors such as the prevailing tax rates, residential status, and allowable deductions. It is advisable to consult SJH Advisory, as we are Certified Professional Accountants (CPAs) and can help you optimize your personal tax strategy as well as file your tax return.
Below are some of our individual tax services:
- Complying with the investigations and/or queries by IRAS
- Lodging objections and submission of appeals
- Verifying assessments issued by IRAS
- Filing the annual tax return to the IRAS
- Preparing and lodging the income tax
At SJH, our team of professionals are dedicated to helping you in all aspects regarding your compliance requirements as an employer and providing comprehensive tax solutions.
Our personal tax advisory services include the following:
- Assisting employers in remedying incorrect contributions in collaboration with the CPF Board
- Assist employers to remediate with the IRAS with regards to incorrect remuneration reporting on employer’s return (IR8E/IR21)
- Reviewing the risks of the employer’s reports to IRAS and the CPF Board
- Personal individual tax advice and planning
- Tax advice on various hiring arrangements of your employees
- Designing and implementation of long-term or short-term incentive plans
- Providing advice on your People Mobility and tax reimbursement policies
- Taxation planning according to employment arrangements and remuneration packages for overseas businesses
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If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
