How to Calculate Taxes for Small Business Owners in Singapore

Did you know that thousands of small business owners in Singapore overpay taxes each year simply because they don’t fully understand their tax structure?

If you’re running a small business—whether as a sole proprietor or a private limited company (Pte Ltd)—filing taxes can be intimidating. But it doesn’t have to be.

This step-by-step guide breaks down how to calculate taxes correctly for your small business in Singapore, explains your filing responsibilities, and shares practical tips to help you stay compliant and save money.

TL;DR: Small Business Tax Filing in Singapore

• If you’re self-employed (freelancer, sole prop), you file taxes under personal income tax (Form B/B1).

• If you’re running a Pte Ltd, you file corporate tax returns (ECI and Form C-S/C) with a flat 17% rate.

• Taxable income = Revenue – Allowable Business Expenses.

• Filing deadlines:

  • Self-employed: 15/18 April

  • Pte Ltd: 3 months after financial year-end (ECI) and 30 November (Form C/C-S)

• Use accounting and bookkeeping services to stay compliant and accurate.

• Understand your structure, calculate your taxes correctly, and avoid costly penalties.

Are You Considered A Small Business in Singapore?

The term “small business in Singapore” isn’t defined by IRAS as strictly as in some countries. Instead, how your business is treated for tax purposes depends on your business structure. Most small businesses in Singapore fall under one of these two categories:

• Self-Employed Individuals – Includes freelancers, online sellers, hawkers, or sole proprietors who have not incorporated a company.

• Private Limited Companies (Pte Ltd) – Registered companies with limited liability, often with one or two shareholders, usually started for growth, credibility, or tax efficiency.

Here’s how IRAS generally distinguishes them:

Understanding how you’re classified is crucial because it affects how you handle tax declaration, accounting, and compliance. If you’re not sure how your business fits, our detailed guide on what is accounting can help clarify your next steps.

Tax Declaration of Sole Prop vs Pte Ltd

Tax declaration obligations vary significantly depending on your business type.

1. Sole Proprietor or Self-Employed Individual

If you’re self-employed, IRAS treats your business income as personal income. You must:

• Report net income in your Form B/B1.

• File taxes by 15 April (paper) or 18 April (e-filing).

• Keep records for at least 5 years, even if your business ceases.

Some allowable deductions include:

• Office rental or home office costs

• Utilities and software

• Marketing or website expenses

• Transport related to work

IRAS has a comprehensive guide for self-employed persons on what you can claim.

2. Private Limited Company (Pte Ltd)

For companies:

• You must file Estimated Chargeable Income (ECI) within 3 months of the financial year-end.

• Submit Form C-S or C by 30 November each year.

• Pay tax at 17%, with tax exemptions for the first SGD 200,000 of chargeable income if you’re a startup.

Most small businesses outsource this to professionals who offer accounting and bookkeeping services, helping them comply with ACRA and IRAS regulations.

How To Calculate Taxable Income As A Self-Employed

If you’re running a small business in Singapore as a freelancer or sole proprietor, here’s how to calculate your tax obligation.

Step 1: Record All Income Earned

Include:

• Sales revenue

• Service income

• Commissions

• Online platform earnings (Shopee, Lazada, etc.)

Step 2: Deduct Allowable Business Expenses

Only revenue-generating expenses can be deducted. These include:

• Cost of goods sold

• Professional services (legal, design, accounting)

• Business transport or delivery fees

• Equipment purchases (if under capital allowance)

You must keep supporting documents—IRAS may request these for audits.

Step 3: Calculate Net Profit

Net Profit = Revenue – Allowable Expenses

This is your taxable income. Declare it under the “Trade, Business, Profession or Vocation” section in your tax return.

For example:

Revenue: SGD 60,000
Expenses: SGD 15,000
Taxable income: SGD 45,000
Estimated tax (based on personal tax rates): SGD 1,700+

Need help with tracking expenses? Our corporate services Singapore team supports freelancers and small business owners with digital tools that simplify the process.

Key Deadlines and Forms to Remember

Common Tax Filing Mistakes to Avoid

Here are frequent errors small business owners make in Singapore:

• Mixing personal and business expenses

• Failing to file ECI on time

• Under-declaring revenue or over-claiming expenses

• Ignoring CPF and employee tax obligations (for Pte Ltds with staff)

Avoid these by engaging a licensed corporate services provider in Singapore who understands local regulations and can help you stay compliant.

Conclusion

Running a small business in Singapore comes with multiple responsibilities—but tax doesn’t need to be a headache. Once you know whether you’re classified as self-employed or operating a Pte Ltd, you can manage your tax declaration with confidence.

Here’s a quick recap:

• Self-employed individuals file under personal tax, using Form B/B1.

• Pte Ltds file ECI and Form C-S/C, subject to corporate tax at 17%.

• You must track income, deduct valid expenses, and file on time.

Don’t wait until the deadline. Partner with Grof to help you stay compliant and focus on what you do best—growing your business.

Need help calculating your tax this year? Check out our full suite of accounting and bookkeeping services designed for small business owners like you.