Sample Calculation for Tax Residents
Example 1: 35 year-old with employment income of $50,000
Mr Heng is 35 years old, married, with a 10-month old son. He earned $50,000 in 2020. He has a newborn child and is eligible for Parenthood Tax Rebate of $5,000. His chargeable income for the Year of Assessment (YA) 2021 is computed as follows:
| Total Employment Income in 2020 | $50,000 |
|---|---|
| Less: Donations | $250 |
| Assessable Income | $49,750 |
| Less: Personal Reliefs | |
| – Earned Income Relief | $1,000 |
| – Qualifying Child Relief | $4,000 |
| – Employee CPF Contribution Relief | $10,000 |
| Chargeable Income (Assessable Income less Personal Reliefs) | $34,750 ($49,750 – $15,000) |
Mr Heng’s tax payable on his chargeable income of $34,750 is calculated as follows:
| Chargeable Income | Tax Payable |
|---|---|
| Tax on first $30,000 | $200.00 |
| Tax on next $ 4,750 @ 3.5% | $166.25 |
| Gross Tax Payable | $366.25 ($200 + $166.25) |
| Less: Parenthood Tax Rebate (PTR) | $366.25 |
| Net Tax Payable for YA 2021 | $0 |
Mr Heng is entitled to PTR of $5,000 in respect of his first child born in 2020 which is used to offset his income tax payable for YA 2021. The remaining amount ($5,000 – $366.25) will be used to offset his income tax payable in subsequent years until the rebate has been fully utilised.
Mr Fong was 64 years old in 2020, with earned income of $250,000. His chargeable income for YA 2021 is computed as follows:
| Total Employment Income in 2020 | $250,000 |
|---|---|
| Less: Donations | $250 |
| Assessable Income | $249,750 |
| Less: Personal Reliefs | |
| – Earned Income Relief | $8,000 |
| – Employee CPF Contribution Relief | $7,650 |
| Chargeable Income (Assessable Income less Personal Reliefs) | $234,100 ($249,750 – $15,650) |
Mr Fong’s tax payable on his chargeable income of $234,100 is calculated as follows:
| Chargeable Income | Tax Payable |
|---|---|
| Tax on first $200,000 | $21,150 |
| Tax on next $34,100 @ 19% | $6,479 |
| Gross Tax Payable | $27,629 ($21,150 + $6,479) |
| Net Tax Payable for YA 2021 | $27,629 |
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Income Tax Rates
Income tax rates depend on an individual’s tax residency status. You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a:
- Singapore Citizen (SC) or Singapore Permanent Resident (SPR) who resides in Singapore except for temporary absences; or
- Foreigner who has stayed / worked in Singapore (excludes director of a company) for 183 days or more in the year preceding the YA.
Otherwise, you will be treated as a non-resident of Singapore for tax purposes.
Singapore’s personal income tax rates for resident taxpayers are progressive. This means higher income earners pay a proportionately higher tax, with the current highest personal income tax rate at 22%.
Tax Rates for Non-Residents
Taxes on Employment Income
The employment income of non-residents is taxed at the flat rate of 15% or the progressive resident tax rates (see table above), whichever is the higher tax amount.
Taxes on Director’s fee, Consultation fees and All Other Income
From YA 2017, the tax rates for non-resident individuals (except certain reduced final withholding tax rates) has been raised from 20% to 22%. This is to maintain parity between the tax rates of non-resident individuals and the top marginal tax rate of resident individuals.