Income Tax in Singapore: Calculating Tax Payable (2020)

Singapore has a relatively low personal income tax rate compared to other developed countries like Japan (61.85%) and Sweden (55.95%). Personal income tax is a tax payable by individuals to finance the government’s expenditure on public goods such as National Defense. Singapore follows a progressive tax system that starts at 0% and ends at 22%.

Tax payers

According to the Inland Revenue Authority of Singapore (IRAS), all Singaporeans, PRs and foreigners who have been working in Singapore for 183 days or more in a tax year are required to pay income tax. A tax year for personal income tax corresponds to a full calendar year from 1 January to 31 December.

A tax year for filing personal income tax should not be confused with the financial year for the Singapore government and selected businesses. The financial year for the government and businesses starts on 1 April of the calendar year to 31 March of the following year.

Income earned overseas

Income tax is chargeable to all income earned within the geographical boundaries of Singapore. In most cases, income earned by individuals working overseas will not be taxed, with the exception of the following examples:

• The income was received before 1 January 2004.
• You are employed in Singapore but travelling is part of your job scope.
• You are an expatriate of the Singapore Government.

Employee benefits

Employee benefits refer to the gains derived from employment, such as accommodations and medical reimbursements.  All employee monetary and non-monetary benefits are taxable, unless they are specifically stated by the company and the government.

Some examples of taxable employer benefits are:

• Housing provided by employer
• Cars provided by employer
• Overtime salaries
• Medical reimbursements

Tax rates

Singapore follows a progressive tax rate. This is to minimise income inequality as tax rates vary according to the level of income, whereby individuals with higher annual income will be subjected to higher tax rates. Tax rates are determined by the level of chargeable income, which is the amount of income left after tax reliefs and other approved expenses.

Personal Income Tax Rates For 2018/2019

Chargeable Income	Income Tax Rate (%)	Gross Tax Payable (S$)
First $20,000 Next $10,000	0 2	0 200
First $30,000 Next $10,000	- 3.5	200 350
First $40,000 Next $40,000	- 7	550 2,800
First $80,000 Next $40,000	- 11.5	3,350 4,600
First $120,000 Next $40,000	- 15	7,950 6,000
First $160,000 Next $40,000	- 18	13,950 7,200
First $200,000 Next $40,000	- 19	21,150 7,600
First $240,000 Next  $40,000	- 19.5	28,750 7,800
First $280,000 Next $40,000	- 20	36,550 8,000
First $320,000 in excess of $320,000	- 22	44,550

For example, an individual earning an annual income of SGD$35,000 will have to pay the income tax amount of SGD$350, which is the sum of SGD$200 for the first SGD$30,000 and 3.5% for the next $10,000.

Tax reliefs

Tax reliefs are benefits that all taxpayers get to enjoy that will help to reduce their chargeable income and tax rates. Tax reliefs will be rewarded if taxpayers bear children, live with their parents, serve the country through National Service (NS), donate to approved charities or top up their CPF account for retirement planning.

Common Tax Reliefs

Tax Reliefs	Amount of Relief
Approved Donations	$2.50 tax relief per $1 donated
Parenthood Tax Rebates	1st child - $5,000 2nd child - $10,000 3rd child - $20,000
Living With Parents t&c	Living together - $9,000 Not living together - $5,500
CPF Cash Top-ups (for Singaporeans and PRs only)	$7,000
Course Fees	$1 course fee = $1 tax relief (maximum $5,500 per year)

The only tax-deductible donations are those made to approved Institution of a  Public Character (IPC). Some common IPC approved charities are Children’s Cancer Foundation (official website) and The National Kidney Foundation (official website). The IPC status of a charity can be found on MCCY's Charity Portal (official website).

The Parenthood Tax Rebate is a one-off tax relief that is claimed the year after the child is born. The claim amount, depending on the birth order of the child, can be split between both parents.

In order to be eligible for the Parent Relief, the dependent has to be 55 years of age or above with the annual income of less than $4,000. This however, is not applicable to dependents with physical or mental disabilities. In the case where the dependent is not living in same household, the taxpayer has to spend $2,000 or more in supporting the former in that year in order to qualify for the relief.

Course fees refer to lessons and trainings that individuals sign up to upgrade their skill levels. In order to qualify for course fees relief, individuals must have held a full-time job prior to enrolling in the course. In the case where a course spans across a few years and the individual has made payment up front, tax relief can be claimed across different tax years. For example, an individual who paid SGD$12,000 for a 4-year course in 2018 may continuously claim SGD$4,000 in 2019, 2020, and 2021.

Claiming of tax reliefs

Tax reliefs can be claimed via myTaxPortal (official website). After the entering the portal using SingPass or IRAS Pin, taxpayers can select their reliefs and deductions by editing Form B/B1. However, it is important to note that personal income tax reliefs are capped at $80,000 per tax year.

Filing of income tax

The tax filed during every Year of Assessment (YA) is for the income earned the previous year. For example, YA 2019 is for the income earned from 1 Jan to 31 Dec 2018. Taxpayers can file their taxes through e-filing at myTaxPortal,mobile phones or paper forms, which will be available online from 1 March every year (official website).

All taxpayers are obligated to file their income tax by 15 April (paper) or 18 April (e-filing) every tax year. Individuals with low or no income are also required to file their taxes unless they are notified via letter or SMS that they are selected for No-Filing Service (NFS). Taxpayers will be subjected to penalties or legal charges if their taxes are not filed by the deadline.

Paying of income tax

After filing the tax returns, tax residents will receive a tax bill, known as the Notice of Assessment (NOA) between May to September every year. Upon receiving the NOA, it is the taxpayer’s responsibility to ensure the accuracy of his tax bill. If there are any mistakes with the tax reliefs or if the taxpayer is unsatisfied with the total tax payable, he needs to inform IRAS within 30 days from the date of the NOA and indicate the reason for objection.

Taxpayers have to clear all the outstanding tax amount within 30 days of receiving the NOA, even after notifying the IRAS about the objection. Penalties will be imposed for late payments.

Payment methods

Majority of taxpayers opt for the General Interbank Recurring Order (GIRO) plan, which is an interest-free 12-month installment plan done through automated electronic payment. However, individuals may also choose to make once off payments at AXS machines or any Singpost branches.