How to Calculate Tax in Singapore: A Complete Guide 

Are you unsure how much income tax you need to pay in Singapore? Understanding how to calculate your personal income tax can save you both time and money. Navigating the complexities of personal income taxation in Singapore can be a daunting task, but with the right guidance, you can maximise your tax efficiency and ensure compliance with the Inland Revenue Authority of Singapore (IRAS) regulations.

In this comprehensive guide, we will delve into the intricacies of tax residency, taxable income sources, tax rates, personal reliefs, and the step-by-step process of calculating your personal income tax liability. Whether you’re a Singaporean citizen, permanent resident, or foreign worker, this guide will equip you with everything you need to understand tax calculations and obligations in Singapore.

TL;DR: A Quick Guide to Personal Income Tax in Singapore

✅ Tax Resident or Not? – Stay in Singapore for 183 days or more, and you qualify for progressive tax rates (0%–22%). Otherwise, a flat 15% or 22% applies.

💰 What’s Taxable? – Your salary, bonuses, rental income, and freelance earnings. But CPF contributions, capital gains, and offshore income? Tax-free!

📅 Key Deadlines: File by 15 April (e-filing) or 18 April (paper filing). Pay taxes by 30 April to avoid penalties.

⚖️ How to Reduce Your Tax Bill? – Claim reliefs (CPF, Parent Relief, Course Fees), donate to charities (250% deduction), and contribute to SRS for extra savings.

🚨 Missed the Deadline? – Expect 5% late penalties, extra fines, and possible travel bans if unpaid!

💳 Pay Smartly! – Set up a GIRO plan for monthly instalments or use PayNow, AXS, and internet banking.

🔍 Final Takeaway: Know your tax rates, deductions, and deadlines to avoid overpaying and keep more money in your pocket! 💡💵

Need tax help? Get in touch with Grof to stay compliant and maximise savings! 🚀

Understanding Tax Residency in Singapore 

The first step in calculating your personal income tax in Singapore is to determine your tax residency status. This distinction is crucial, as it dictates the applicable tax rates and the treatment of your income sources. 

Who Qualifies as a Tax Resident in Singapore?

You are considered a tax resident in Singapore if you meet any of the following criteria:

• Singapore Citizens or Permanent Residents: Individuals with Singaporean citizenship or permanent residency status who reside in the country, with the exception of temporary absences. 

• Foreigners with Prolonged Stay: Foreigners who have been in Singapore for at least 183 days in the preceding calendar year or have continuously resided in the country for three consecutive years, even if their stay was less than 183 days in the initial or third year. 

• Employees with Continuous Employment: Foreigners who have been employed in Singapore for a continuous period spanning two calendar years, with a total stay of at least 183 days (including the period preceding and following the employment). 

If you meet any of these criteria, you will be classified as a tax resident, and your income earned both within and outside of Singapore will be subject to taxation, with certain exceptions for foreign-sourced income. 

If you do not meet these conditions, you are classified as a non-resident and will be subject to different tax rates.

Why Does Your Tax Residency Matter?

• Tax residents benefit from progressive tax rates, personal reliefs, and exemptions.
• Non-residents pay a flat tax rate on employment income and are not eligible for most personal reliefs.

Curious about the advantages of becoming a tax resident in Singapore? Our comprehensive guide covers the benefits and qualification process – read it here.

What Are the Different Types of Taxes in Singapore? 

Singapore is known for its business-friendly tax system, with one of the lowest personal and corporate tax rates globally. The key types of taxes include:

1. Personal Income Tax – Levied on individual earnings based on a progressive tax structure.
2. Corporate Income Tax – Flat 17% rate for businesses.
3. Goods and Services Tax (GST) – Currently at 8%, increasing to 9% in 2024.
4. Property Tax – Levied on properties based on their value.
5. Stamp Duty – Applied to property transactions and lease agreements.

Understanding how each tax is calculated and when they apply is crucial for individuals and businesses to ensure compliance with Singapore’s tax regulations.

Are you struggling with tax filing, compliance, or GST requirements in Singapore? Navigating the complexities of tax regulations can be overwhelming, but Grof Singapore is here to make it easier for you. Our team of experienced professionals is dedicated to providing comprehensive support for all your company tax-related needs. We offer tailored solutions to ensure you meet all compliance obligations seamlessly. Let us handle the complexities while you focus on what matters most—growing your business. Get in touch with Grof Singapore today, and let us guide you through the intricacies of tax filing and GST compliance with confidence. 

Identifying Taxable Income Sources 

Once you’ve established your tax residency status, the next step is to identify the various sources of income that are subject to taxation in Singapore. The key taxable income categories include: 

Taxable Income Category	Description
Employment Income	Salaries, bonuses, commissions, and allowances.
Rental Income	Income from renting out property in Singapore.
Stock Options & Share Gains	Gains from employer stock options and vested shares.
Director’s Fees	Fees received for being a director of a company.
Taxable Benefits-in-Kind	Housing, car benefits, and other non-cash benefits.

What Income is Exempt from Tax?

Not all types of income are taxable. Some exemptions include:

• Capital Gains – Profits from selling stocks, properties, and investments.
• Inheritance – Money or assets received through inheritance.
• Lottery Winnings & Gifts – Prize money, lottery winnings, and personal gifts.

Knowing what is taxable vs non-taxable ensures you report your income correctly and claim exemptions where applicable.

Calculating Chargeable Income 

To determine your personal income tax liability, you’ll need to calculate your chargeable income, which is the amount of income that is subject to taxation. The formula for calculating chargeable income is as follows: 

Chargeable Income = Assessable Income – Deductions 

Assessable Income = Total Employment Income – Donations Deductions = Earned Income Relief + Qualifying Child Relief + Employee CPF Contribution Relief + Other Eligible Deductions 

The deductions mentioned above are a subset of the various personal reliefs and allowances available to Singapore tax residents. These deductions can help reduce your overall taxable income and, consequently, your tax liability. 

Navigating the Singapore Tax Rates 

Singapore employs a progressive tax system, which means that the higher your chargeable income, the higher the applicable tax rate. The current personal income tax rates in Singapore are as follows: 

Chargeable Income	Income Tax Rate (%)	Gross Tax Payable ($)
First $20,000  Next $10,000	0  2	0  2
First $30,000  Next $10,000	–  3.50	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  Next $40,000
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  Next $180,000	–  22	44,550  39,600
First $500,000  Next $500,000	–  23	84,150  115,000
First $1,000,000  In excess of $1,000,000	–  24	199,150

Example Calculation:
If your chargeable income is $85,000, your tax would be calculated as:

• First $20,000 = $0
• Next $10,000 (2%) = $200
• Next $10,000 (3.5%) = $350
• Next $40,000 (7%) = $2,800
• Remaining $5,000 (11.5%) = $575

Total Tax Payable: $3,925

Navigating Taxes for Non-Residents 

The tax obligations for non-residents in Singapore differ from those of tax residents. Non-residents are subject to the following tax rates: 

• Employment Income: Non-residents are taxed at a flat rate of 15% or the prevailing progressive resident tax rates, whichever results in a higher tax liability. 

• Director’s Fees, Consultation Fees, and Miscellaneous Income: A consistent tax rate of 24% applies to non-resident individuals. 

Unlike tax residents, non-residents do not qualify for tax reliefs.

Claiming Personal Reliefs and Deductions 

As a Singapore tax resident, you may be eligible for various personal reliefs and deductions that can help reduce your overall tax liability. Some of the common reliefs and deductions include: 

• Earned Income Relief: This relief is available to individuals who have earned income, such as employment income or self-employment income. 

• Qualifying Child Relief: This relief can be claimed for each qualifying child you support. 

• Employee CPF Contribution Relief: You can claim a deduction for the mandatory contributions you make to your Central Provident Fund (CPF) account. 

• Parenthood Tax Rebate: Eligible parents can claim a tax rebate for their newborn children. 

• Donations: Donations made to approved institutions or causes can be deducted from your taxable income. 

It’s crucial to carefully review your eligibility for these reliefs and deductions to ensure that you maximize your tax savings. 

Calculating Tax Payable and Payment Deadlines 

Once you’ve determined your chargeable income and applied the relevant tax rates, you can calculate your total tax payable. This amount is due for payment within one month from the assessment date, regardless of whether you’ve filed a notice of objection. 

Taxpayers in Singapore have the option to apply for a convenient monthly instalment payment plan through the Interbank GIRO system, which allows you to spread your tax payments over a period of time without incurring any interest. 

Navigating the Annual Income Tax Return 

In Singapore, individuals are required to submit an annual income tax return, which includes all necessary details for determining personal reliefs and deductions. The submission deadline for the income tax return is typically the 15th of April, with an extension to the 18th of April for electronic filings. 

It’s important to ensure that you provide accurate and complete information in your tax return to avoid any discrepancies or potential penalties from the IRAS. 

How to File Your Personal Income Tax?

Filing your personal income tax in Singapore is a straightforward process through the IRAS myTax Portal. Here’s a step-by-step guide:

1. Receive Tax Filing Notification

• IRAS will notify you via SMS, email, or letter by March if you need to file a tax return.
• If you are under the No-Filing Service (NFS) scheme, IRAS automatically assesses your tax, and you only need to verify the details.

2. Log in to myTax Portal

• Visit myTax Portal
• Log in with SingPass or Foreign Identification Number (FIN)
• Select “File Individual Income Tax Return”

3. Verify Pre-Filled Income Details

• Employers and financial institutions submit data to IRAS, so some fields may be pre-filled.
• Review your salary, CPF contributions, and relief claims to ensure accuracy.

4. Declare Additional Income Sources

• If you have rental income, freelance earnings, or other taxable sources, manually declare them.

5. Claim Deductions and Reliefs

• Apply for tax reliefs such as CPF Relief, Parent Relief, and Course Fees Relief to reduce taxable income.

6. Review and Submit

• Double-check all entries and submit the tax return.

Once submitted, IRAS will process your return and issue a Notice of Assessment (NOA) detailing the tax amount payable.

How to Make Income Tax Payments in Singapore?

Once you receive your Notice of Assessment (NOA), you must settle your tax bill before the 30 April deadline.

Payment Methods Available

Payment Method	Processing Time
GIRO (Instalments)	Monthly deductions
PayNow QR	Immediate
AXS Machines	1-2 working days
Internet Banking	1-3 working days
NETS at IRAS Office	Immediate

If you prefer monthly instalments, GIRO deductions allow interest-free tax payments over 12 months.

Consequences of Late or Non-Payment of Taxes

Failing to pay your personal income tax on time can lead to serious consequences:

1. Late Payment Penalty – 5% penalty imposed on outstanding tax amounts.
2. Additional Penalties – If payment remains unpaid, IRAS may impose an additional 1% penalty per month (up to 12% total).
3. Legal Enforcement – IRAS may take legal action, including seizing assets or freezing bank accounts.
4. Travel Restrictions – Defaulters may be barred from leaving Singapore until taxes are settled.

To avoid penalties, set up a GIRO plan for automated monthly payments.

Understanding Withholding Taxes for Non-Residents 

For non-resident individuals in Singapore, certain types of income are subject to withholding taxes. These include: 

Remuneration including director’s fees received by non-resident directors 

• Withholding Tax Rate (From YA 2024 onwards): 24% 

Income received by non-resident professionals (e.g., consultants, trainers, and coaches) for services performed in Singapore 

• Withholding Tax Rate (From YA 2024 onwards): 15% of gross income or 24% of net income 

Income received by non-resident public entertainers for services performed in Singapore 

• Withholding Tax Rate (From YA 2024 onwards): 15% concessionary rate 

SRS withdrawals received by non-Singapore SRS account holders 

• Withholding Tax Rate (From YA 2024 onwards): 24% 

Interest, commission, fee, or other payment in connection with any loan or indebtedness 

• Withholding Tax Rate (From YA 2024 onwards): 15% reduced final withholding tax rate (subject to conditions) or 24% if reduced withholding tax rate is not applicable 

Royalty or other lump sum payments for the use of movable properties 

• Withholding Tax Rate (From YA 2024 onwards): 10% reduced final withholding tax rate (subject to conditions) or 24% if reduced withholding tax rate is not applicable 

Tax Planning Strategies to Reduce Your Tax Bill

Strategic tax planning can help you legally minimise tax liabilities. Here are some tips:

1. Maximise CPF Contributions – Contributing to your Central Provident Fund (CPF) account lowers taxable income and secures your retirement savings.
2. Claim All Eligible Tax Reliefs – Ensure you claim Earned Income Relief, Parent Relief, and Course Fees Relief to lower taxable income.
3. Donate to Approved Charities – Singapore grants a 250% tax deduction for donations made to Institutions of a Public Character (IPC).
4. Utilise the Supplementary Retirement Scheme (SRS) – Voluntary contributions to SRS accounts reduce taxable income while securing retirement savings.
5. Opt for GIRO Instalment Plans – Instead of paying a lump sum, monthly GIRO payments help manage cash flow efficiently.

Conclusion 

Navigating the personal income tax landscape in Singapore requires a thorough understanding of tax residency, taxable income sources, deductions, and the applicable tax rates. By familiarising yourself with these key concepts and utilising the available tax reliefs and deductions, you can effectively manage your tax obligations and maximise your financial well-being. Remember, staying informed and seeking professional assistance when needed can go a long way in ensuring a smooth and stress-free tax filing process. 

Need help with your Singapore tax filing? Contact a qualified tax professional like Grof for expert guidance.