Income Tax

Income Tax is a direct tax levied on the income earned by an individual. Singapore has one of the lowest personal income tax rates for its tax resident. It follows a progressive tax rate with the maximum personal income tax bracket of 22% for annual chargeable income over S$320,000. Taxable income comprises of all income earned from:

• Employment – Salary, commission, bonus, gain from the sale of stock options, and payments like salary in-lieu of notice, gratuity, and ex-gratia.
• Trade, Business, Profession, or Vocation – Income received as a self-employed person or sole-proprietor or through partnership, and income received in the form of virtual currency,
• Property or Investments – rent from property, gains from trading in property, and interest from deposits with non-approved banks in Singapore and finance companies not licensed in Singapore.
• Other Sources – royalties, estate or trust income, and withdrawal from Supplementary Retirement Scheme (SRS).

The total chargeable income is calculated by deducting the allowable expenses, donations, rebates, and reliefs from the taxable income.

Who needs to pay Income Tax?

Income tax rates depend on an individual’s tax residency status. You will be treated as a tax resident for a particular Year of Assessment (YA)

• If you are a 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 (excludes director of a company) for 183 days or more in the year preceding the YA, and
• Earning a gross income of $22,000 or more in a year.

You can calculate your estimated tax payable using the Tax Calculator for Resident Individuals. If you are not a tax resident, then the employment income is taxed at the flat rate of 15% or the progressive resident tax rates, whichever is higher. You can use the Tax Calculator for Non-Resident Individuals to calculate the estimated tax payable.