Guide to Singapore Personal Income Tax 2023
The Singapore personal income tax structure is one of the friendliest and most competitive in the world. The tax year is from 1 January to 31 December in each calendar year and income is assessed on a preceding-year basis.
Personal Income Tax Rates
The Singapore income tax rate is progressive, relative to an individual’s amount of income, ranging from 0 to 22%.
Singaporeans whose overseas employment is for a period of at least six months in any calendar year can choose to be treated as a non-resident for the year of assessment following the year of overseas employment. Foreign income received in Singapore is not subject to tax under certain conditions.
Tax Rates for Resident Individuals (Per Singapore Income Tax Bracket)
| INDIVIDUAL INCOME TAX RATES OF TAX FOR THE YEAR 2022 (YEAR OF ASSESSMENT 2023) | |||
|---|---|---|---|
| Chargeable Income | Income Tax 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 |
Key Points of Singapore Income Tax for Individuals Include:
- The amount of income tax that you have to pay depends on your tax residency in Singapore. The taxes for residents are different from non-residents.
- Top marginal resident tax rate of 22% kicks in at S$320,000 of taxable income.
- Non-residents are taxed at the flat rate of 15% or the resident rate, whichever results in a higher tax amount.
- In general, all remuneration arising from employment under which duties are performed in Singapore would be fully taxable irrespective of where the funds are made available to you
- Besides salaries and bonuses, perquisites such as housing and stock options will form part of your taxable employment income.
Personal Income Tax for Singapore Residents
Who is a tax resident?
Different tax rates apply for tax residents and non-residents. You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a:
- Singaporean; or
- Singapore Permanent Resident (SPR) if you have established your permanent home in Singapore; or
- Foreigner who stayed/worked in Singapore for 183 days or more in the previous year (excludes director of a company).
For Foreigners working in Singapore, the following conditions are also applicable to the taxability of their income in Singapore:
- If you work in Singapore for 60 days or less in a calendar year, you will be exempt from tax on your earnings here. This exemption does not apply to non-resident company directors, public entertainers, professionals including foreign experts, speakers, queen’s counsels, consultants, trainers, coaches, etc.
- If you stay or work in Singapore for 61 to 182 days in a calendar year, your income will be taxed at 15% or resident rates for individuals, whichever gives the higher tax.
- If you stay or work in Singapore for 183 days or more in a calendar year, your income will be taxed at resident rates for individuals.
- If you stay or work in Singapore for a continuous period of at least 183 days over two years, your income will be taxed at resident rates for individuals.
- If you stay or work in Singapore for three consecutive years, your income for all years will be taxed at resident rates.
What is the Difference in the Tax Treatments of a Resident and Non-Resident?
| Resident individuals | Non-resident individuals |
|---|---|
| Taxed progressively | Taxed at 15% or respective progressive residential rate of up to 22% |
| Double tax relief is available | No double tax relief |
| Relief is available for various taxes such as dependants, children, etc | Generally, no relief is available |
| Exempted from interest income | Interest income from deposits with approved banks is not taxable |
| Employment income is taxable | Employment income from local employment of fewer than 60 days is exempt from taxation |
| Tax rebates are available | No tax rebates are available |
Income Tax Payable
Employment income – taxable employment income includes:
- Cash remuneration
- Wages
- Salary
- Leave pay
- Directors’ fees
- Commissions
- Bonuses
- Gratuities
- Perquisites
- Gains received from employee share plans
- 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.
What is Chargeable Income?
Chargeable income (taxable income) is the net income after the deduction of expenses, donations, and personal reliefs. Personal tax reliefs, subject to conditions, include support of dependents, academic tuition, professional development expense,s and premiums paid on life insurance policies.
How is Taxable Income Computed?
The Inland Revenue Authority of Singapore (IRAS) provides the formula in determining the taxable income of an individual. It is the following:
- Total Income Less Expense = Statutory Income
- Statutory Income Less Donations = Assessable Income
- Assessable Income Less Personal Reliefs = Taxable Income
What is Total Income?
- Profits earned from business, trade, vocation, profession as a partner in a partnership or sole proprietor
- Gains from employment (including Benefits-in-kind)
- Dividends, Investment income, interests
- Rental fees, Royalties, Premiums, and other Profits accumulated from properties
Benefits-in-kind received as part of the employment:
Benefits received in kind are taxable (either fully or partially) and include:
- Residential Accommodation
- Furniture & Furnishings provided
- Food & Clothing, Hotel Accommodation
- Home Leave Passage
- Motor Car, Driver
- Share Options
- Interest Subsidy
- Income tax paid by Employer
- Insurance premium paid by the employer if the employee is stated as a beneficiary in the policy
- Subscription, Entrance Fees, Memberships
What Are Expenses?
- Employment-related
- Rental-related
What Are Donations?
Donations made to qualified charities in Singapore.
What Are Personal Reliefs?
Qualified course or tuition fees, earned income relief, parent relief and support of dependents, professional development expenses and premiums paid on life insurance policies, and any other special reliefs.
How Are Employer-Provided Fringe Benefits Taxed?
By law, all profits and gains obtained by an individual, local or foreign, as a consequence of employment are subject to tax.
This is unless they are categorically exempted from having to pay tax or are included in an existing administrative concession.
Gains and profits cover all benefits derived in money or in another form, paid or granted as part of the employment. Examples of tax benefits bestowed by an employer are:
- Car furnished by an employer
- Accommodation and housing allowance
- Refunds of medical and dental treatments for dependents besides the income-earner [You], spouse, and children
- Overtime pay
- Fixed monthly meal allowances
- Fixed monthly allowance for transportation or if the mileage on private cars are reimbursed
- Per Diem allowances (such as allowances provided on overseas trips for business purposes), as long as the amount is beyond the acceptable rates.
These fringe benefits are taxed as soon as they are enjoyed by the employees. Nevertheless, certain non-cash benefits (i.e. accommodations like housing) are taxed using special formulas, known as a concessionary basis, leading to lower taxation on these benefits-in-kind. Hence, a separate compensation package has been structured exclusively for executives to help them mitigate on their individual tax liability in Singapore.
Tax Treatment of Income Earned Overseas
Generally, overseas income received in Singapore is not taxable. This includes overseas income brought into Singapore. However, there are certain circumstances under which overseas income is taxable:
- It is received in Singapore through partnerships in Singapore.
- Your overseas employment is incidental to your Singapore employment. That is, as part of your work here, you need to travel overseas.
- You are employed outside Singapore on behalf of the Government of Singapore.
Tips on Ways to Save Tax
- Tax residents are eligible for tax reliefs that can be offset against the assessable income. You can get relief for wife support, child maintenance etc.
- You may claim expenses incurred against your employment income; enjoy tax deductions for approved charitable donations.
- Under the Not Ordinarily Resident (NOR) Scheme, you can enjoy either Time Apportionment of Singapore employment income or Tax Exemption of Employer’s contributions to the Overseas Pension Fund, or both.
- If you work for a foreign employer and need to travel overseas in the course of work, you may enjoy time apportionment of employment income under the Area Representative Scheme.
- With the Avoidance of Double Taxation Treaties signed by Singapore, your income may not be taxed twice in Singapore and your home country.
Capital Gains Tax, Inheritance Tax, Estate Duty
Singapore does not have any taxes on Capital Gains. Also, Singapore has abolished the Inheritance tax (commonly known as Estate Duty – a tax that you have to pay when you die which comes out of the financial estate that you leave behind.)
Singapore does not impose any capital gains tax on personal investment income that arises in relation to real assets, such as property, financial assets, such as shares or bonds, and intangible assets.
Filing Personal Income Tax Returns
Who must file personal tax returns?
- If you are a Resident/Employment pass/PEP/Entrepass holder,
- If your annual income in Singapore is above S$22,000,
- If you have received a letter from the Inland Revenue Authority of Singapore inviting you to file personal income tax, in spite of the amount of your annual income for the previous year.
What is Employer Responsibility for Personal Tax?
Companies must give completed Forms IR8A to employees, showing remuneration and benefits-in-kind for the previous calendar year, by 1 March.
What is the Personal Tax Filing Due Date?
It is mandatory under law to file your annual personal tax returns to IRAS by 15 April for Paper Filing and 18th April for e-filing of every year.
IRAS diligently enforces the requirements relating to the filing of personal tax. Please comply to avoid paying fines and/or court prosecution.
Income is assessed on a preceding calendar year basis, ending 31 December. You must File Your Annual Tax Form by 15 / 18th April of the following year. If the tax return is not filed by the 18 April deadline, IRAS may raise the estimated assessment. You can usually expect to receive the income tax bills from May to August.
Recommended for you, check Singapore Tax Filing Calendar »
Settlement of Personal Tax Liability:
Paying your taxes: Sign up for the 12-month interest-free GIRO Deduction Plan to pay your income tax in installments. Otherwise, full payment has to be made within one month from the date of the income tax bill.
If the tax is not paid by the due date, a 5% penalty and a 1% additional penalty per month of up to 12% (a total of 17%) will be imposed. In addition, IRAS may take recovery action.
- Impose an additional penalty of 1% up to a maximum of 12% on any unpaid tax for each month that the tax remains unpaid;
- Direct the taxpayer’s employer to deduct any unpaid tax from his salary;
- Direct the taxpayer’s banks, tenants, or any third parties to pay any unpaid tax to IRAS from any money held for the taxpayer or due to him;
- Restrict the taxpayer from leaving Singapore
- Take legal action against the taxpayer.
Objection to the Notice of Assessment (NOA)
If an individual does not agree with the assessment raised, he/she has to lodge an objection in writing within 30 days from the date of issue of notice of assessment; otherwise, the assessment will automatically become final.
Related Topic » Income Tax Return Singapore Services
Double Tax Relief and Tax Treaties
Relief from double taxation is granted on income derived from professional, consultancy, and other services rendered in countries that do not have double tax treaties with Singapore.
Double tax relief is also available for foreign taxes levied on income taxed in Singapore if Singapore has a tax treaty with the country concerned and if the individual is resident in Singapore for tax purposes.
Singapore has entered into tax treaties with 80 countries and territories.
Individuals who receive employment income in Singapore and who are tax residents of countries that have concluded double tax treaties with Singapore may be exempt from Singapore income tax if their period of employment in Singapore does not exceed a certain number of days (usually 183) in a calendar year or within a 12-month period and if they satisfy certain additional criteria specified in the treaties.
Need Assistance to Meet Your Singapore Personal Tax Compilation and Filing?
Rikvin can assist you with your personal income tax filings. Our personal tax filing services include:
- Registration for new taxpayers
- Preparation and filing of income tax return based on your income and determination of possible deductions and reliefs that are applicable to you
- Request for an extension of the deadline, if necessary
- Preparation of Form IR8A/IR21 for employees
- Tax planning as well as advice
- Year of Assessment & Basis Period
- Tax Residency & Personal Reliefs
- Source of Employment Income
- Double Taxation and Exemption
- Taxation of Different Types of Bonus
- Taxation of Allowances & Benefits-in-kind
- Taxation of Equity Gains
- Taxation of Director’s Remuneration/Fees
- Payment & Refund of Tax
- Special Schemes – NOR, Area Representative
- Employer’s & Employee’s Obligations: Forms IR8A, IR21 & B1
- Tax Compliance: IRAS Enforcement Actions on Non-Filing & Late Payment, Penalties for Negligence & Evasion
- Voluntary Disclosure
People also ask
- Singapore Tax adopts a progressive personal tax rate, relative to an individual’s amount of income, ranging from 0 to 22%. Top marginal resident tax rate of 22% kicks in at S$320,000 of taxable income. Besides salaries and bonuses, perquisites such as housing and stock options will form part of your taxable employment income.
- During the year, a company’s board decides whether the business has done well enough to pay the shareholders an interim dividend and at the end of the financial year, the shareholders can pay themselves a final dividend. Dividends can be paid from the company’s profits or reserves. Dividends are paid according to the number of shares held by the shareholders, so the more shares you own, the more money you get. Singapore practices a one-tier tax system which means shareholders are not taxed on the dividends they receive from Singapore companies.
- Singaporeans whose overseas employment is for a period of at least six months in any calendar year can choose to be treated as a non-resident for the year of assessment following the year of overseas employment. Foreign income received in Singapore is not subject to tax under certain conditions.
- Singapore’s has a territorial tax system, which means that tax is imposed on all income accrued in or derived from Singapore, as well as on all foreign-sourced income remitted to the country, with certain qualifying exemptions (dividends, branch profits, service income). Notably, Singapore has:
- No capital gains tax in Singapore.
- No withholding tax on dividends.
- No capital duty, capital acquisitions tax, inheritance or estate tax, or even net worth/wealth tax in the city-state.
- Yes, the rent you receive from renting out your property in Singapore may be subject to income tax, unless your conditions are specifically exempted under the Income Tax Act.
- No, it is not. But the city-state does have very low effective taxes – both corporate and personal – making it one of the most business-friendly jurisdictions in the world.
Need help to file your personal income tax online?
Let us do the work for you. With Rikvin, income tax filing is done right and well before the deadline.
