Singapore is regarded as a competitive and business friendly country – an ideal playground for every entrepreneur and firm, thanks to its Tax policy. In Singapore, the personal income tax rate is among the lowest in the whole world.
Personal Income Tax – Who is Liable?
To determine income tax liability in Singapore as a resident, one should first determine the tax residency as well as the chargeable income amount before applying the rate of progressive tax to it.
Different tax rates apply to tax-resident and non-resident individuals in Singapore.
Table of Contents
- Personal Income Tax Rates for Tax Residents
- Income Subject to Tax
- A comprehensive checklist to guide you through the Tax Filing process
- Tax Reliefs and Rebates
- Best Ways of Tax Planning
- How should I prioritize my contributions?
- What is Not Ordinarily Resident (NOR) Scheme?
- What is Letter of Guarantee (LOG)?
- What are the 3 best modes of paying Tax?
Personal Income Tax Rates for Tax Residents
Who is a Tax Resident?
- A citizen or a permanent resident residing in Singapore except for temporary absences;
- A foreigner who has stayed / worked in Singapore (excludes director of a company) for 183 days or more in the year before the year-of-assessment
After deducting personal relief, personal income tax rates are between 0-22% for a tax-resident. The rates applicable are as below:
| Year of Assessment 2021 | |||
|---|---|---|---|
| Chargeable Income | Rate (%) | Gross Tax Payable ($) | |
| On the first On the next |
20,000 10,000 |
0 2 |
0 200 |
| On the first On the next |
30,000 10,000 |
– 3.5 |
200 350 |
| On the first On the next |
40,000 40,000 |
– 7 |
550 2,800 |
| On the first On the next |
80,000 40,000 |
– 11.5 |
3,350 4,600 |
| On the first On the next |
120,000 40,000 |
– 15 |
7,950 6,000 |
| On the first On the next |
160,000 40,000 |
– 18 |
13,950 7,200 |
| On the first On the next |
200,000 40,000 |
– 19 |
21,150 7,600 |
| On the first On the next |
240,000 40,000 |
– 19.5 |
28,750 7,800 |
| On the first On the next |
280,000 40,000 |
– 20 |
36,550 8,000 |
| On the first In excess of |
320,000 320,000 |
– 22 |
44,550 |
For Foreigners working in Singapore, the following conditions are applicable for income tax in Singapore:
- Up to 60 days – the employment income is tax exempt if the individual is in Singapore on short-term employment for 60 days or less in a year; the exemption does not apply to a director of a company, a public entertainer or exercising a profession in Singapore
- 61 to 182 days – the individual is taxed on all employment income earned in Singapore at 15% or the resident rate, whichever gives rise to a higher tax amount. Director fees, consultant fees and all other sources of incomes are taxed at 20%.
Income Subject to Tax
Employment income
Taxable employment income includes salary, leave pay, directors’ fees, commissions, bonuses, cash remuneration, gratuities, perquisites, gains received from employee share plans and allowances received as compensation for services. Benefits-in-kind derived from employment, including home-leave passage, employer-provided housing, employer-provided automobiles and children’s school fees, are also taxable. Certain of these benefits receive special tax treatment.
Singapore Corporate Tax Calculator
Calculate your effective corporate tax rate for the current Year of Assessment. Try it now
A comprehensive checklist to guide you through the Tax Filing process
Who files Tax Returns?
All income earned in Singapore is subject to tax including salaries, bonuses, pensions, and business revenue. However, if your total income in the current year of assessment 2021 (January 1st to December 31st 2020) is less than $22,000, you do not need to file and pay taxes.
If you receive a No-Filing Service notification, then your returns have been filed automatically. If you have additional income to declare, or wish to claim reliefs, you need to login to myTaxPortal to add those details and then file.
Otherwise, you will need to login to myTaxPortal to file your taxes.
When do I file my Tax returns?
For the year of assessment 2021, the deadline for filing taxes are as follows:
April 15th, 2021 (for paper filing)
April 18th, 2021 (for e-filing)
The Inland Revenue Authority of Singapore (“IRAS”) may grant an extension of time on a case-by-case basis if the extension application is submitted by 31 March 2021.
How much Tax do I need to pay?
The amount of income tax you need to pay depends on how much you earn in Singapore and whether you are considered a tax resident or non-resident for income tax purposes.
How Do I file Tax?
All you need is SingPass login to access myTaxPortal, the records for declaring taxable income and the records for filing tax deductions and reliefs for e-filing. Our tax preparation services in Singapore can help you with all this.
Tax Reliefs and Rebates
What should I do to reduce my tax payable, legally? Evading taxes is a crime in Singapore and is punishable in the court of law. However, there are numerous ways to actually legally reduce the Tax amount.
Make Tax-Deductible Donations
The following types of donations will qualify you for a double tax deduction (twice the amount of donation):
- Cash Donations
- Shares Donations
- Computer Donations
- Artefact Donations
- Public Art Tax Incentive Scheme
- Land and Building Donations
Claim Personal Tax Reliefs
Know what personal income tax reliefs are applicable to you:
- Course fees relief
- CPF cash top-up relief
- CPF / provident fund relief: For employees only
- CPF / provident fund relief: For self-employed/employee who is also self-employed
- CPF / Provident Fund Relief: Medisave Contributions & Voluntary Contributions to Medisave Account
- Earned income relief
- Handicapped brother/sister relief
- Life insurance relief
- NSman (self/parent) relief
- Parent/handicapped parent relief (for maintenance of parents, grandparents & great-grandparents including in-laws)
- Supplementary Retirement Scheme (SRS) relief
Related Read: 5 Strategies to Get More Income Tax Relief in Singapore »
How much income tax do you need to pay this year?
Use our free online tax calculator to find out
Try it now
Best Ways of Tax Planning
Note: This applies for a medium level income earning Singapore citizen/SPR*
How do I contribute to the SRS (Supplementary Retirement Scheme)?
Singapore citizens, Permanent Residents and foreigners are eligible for the SRS scheme. Save more for your retirement and pay less tax. Open an SRS account with a local bank. i.e DBS, UOB or OCBC Bank.
| PROs | CONs |
|---|---|
| Eligible for tax relief up to $12,750, with no restrictions on age | Withdrawals are treated as income and therefore subjected to income tax. |
| Only 50% of the withdrawals from SRS are taxable at retirement | A 5% penalty for premature withdrawal will be impose |
How do I make a Voluntary Contribution to your CPF Medisave Account?
You can make a one-time Voluntary Contribution through CPF E-Payment (internet banking), AXS Station, iNETS Kiosk, GIRO or cheque payment.
| PROs | CONs |
|---|---|
| Funds in the Medisave Account enjoy 4%, compared to the 2.5% in the Ordinary Account |
Voluntary contribution to all 3 CPF Accounts are non-tax deductible Contributions cannot be used for housing or investments |
How do I Top-up cash under the CPF Minimum Sum Topping-Up Scheme?
This can be done through CPF E-Payment (internet banking).
| PROs | CONs |
|---|---|
| Two separate tax reliefs are applicable ($7,000 relief for topping to own CPF account and another $7,000 for topping up to family members). Each caregiver who contributes is eligible for up to $7,000 in relief, even if the top-up is to the same recipient | Tax relief restricted to tops up for parents, grandparents, spouse and siblings |
| Top-ups can be used for investments, provided there is more than $40,000 Funds in SA earn 4% interest | Tax relief for siblings/spouse is subject to the condition that the recipient earns $4,000 or less in the preceding year Tax relief is not applicable for CPF-to-CPF top-ups |
How should I prioritize my contributions?
Caring for elderly parents/grandparents
If you have elderly parents or grandparents who have reached the sum draw-down age, then topping up and contributing to their CPF accounts will give them immediate access to the cash.
Growing portfolio with excess funds
To build up your investment portfolio in equities and unit trusts etc. with your excess funds, contributing to the SRS allows you to achieve tax relief.
Saving for medical emergencies
If you are looking to save for medical emergencies in the foreseeable future, then making contributions to the Medisave account is advisable.
What is Not Ordinarily Resident (NOR) Scheme?
The Not Ordinarily Resident (NOR) Scheme extends favourable tax treatment to qualifying individuals for a period of five years of assessment, provided such individuals meet the following criteria:
- The individual must not have been a Singapore resident in the 3 consecutive years of assessment before the year he first qualifies for the NOR scheme; and
- The individual must be a tax resident for the year of assessment in which he wishes to qualify for the NOR scheme and must also be employed by a Singapore employer.
Please note that the NOR scheme has expired. The last NOR status will be valid from YA 2020-2024. Our tax preparation services in Singapore can help you benefit from this scheme.
What is Letter of Guarantee (LOG)?
A foreign individual who is employed by a foreign employer (e.g. representative office or entity not registered in Singapore) is required to provide LOG from a local bank or an established limited company in Singapore to cover his / her estimated tax for the coming Year of Assessment. If the LOG is not provided to the IRAS, an advance assessment will be issued.
What are the 3 best modes of paying Tax?
GIRO
GIRO is a cashless and convenient mode of payment. With payments made automatically on a regular basis, tax payers need not bother with the hassle of remembering when a bill is due or wait in a line to pay a bill. GIRO is a great option as it offers interest free payment for 12 months.
AXS Station
Pay your tax at any AXS Self-service station.
Credit Card
Some banks/ credit card companies offer options to pay tax via credit cards and you can redeem points!
- How do I rack up reward points or miles on my credit card by paying Tax? If you love piling up points on your rewards credit card then you can turn your tax payments into exciting rewards. By simply charging your taxes to credit cards you can enjoy the convenience of consolidating your payments into one account – and get rewarded for it! You’ll earn Rewards point for every S$1 charged to your credit card, which can be used to redeem fabulous shopping and dining rewards, or air miles from the Rewards program. EG: HSBC, ANZ etc.
Need help e-filing your taxes?
Engage our tax professionals now and we’ll take care of your personal tax filing needs!
