In Singapore, all income earned are subject to tax.The amount of income tax you need to pay depends on how much you earn and whether you are considered a tax resident or non-resident A person 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 previous year.
OFWs who arrive in Singapore before Jul 1 of the Year of Assessment are considered Tax Residents. In that case, your taxable income (total income less deductions, expenses, donations and tax reliefs) will be subject to tax at progressive rates ranging from 0% to 20% as below.
Tax rates for resident individuals
| Taxable Income |
Rate (%) |
Gross Tax Payable ($) |
First $20,000
Next $10,000 |
0
3.50 |
0
350 |
First $30,000
Next $10,000 |
-
5.50 |
350
550 |
First $40,000
Next $40,000 |
-
8.50 |
900
3 400 |
First $80,000
Next $80,000 |
-
14 |
4 300
11 200 |
First $160,000
Next $160,000 |
-
17 |
15 500
27 200 |
First $320,000
Above $320,000 |
-
20 |
42,700 |
For
Tax Non-Resident the computation is simpler as it is just a flat 15% of your total income for the tax year or the resident rate whichever is higher. Simpler doesn't necessary mean less, though. For OFWs who arrive after Jun 30 of a particular year may be charged 15% tax.
How to Compute your Tax
Assessable Income = Total Income - (Expenses and Donations)
Taxable Income = Assessable Income - Personal Reliefs
In effect, the formula is
Taxable Income = Total Income - expenses - donations - personal reliefs
Simple Example :
If your taxable income for YA 2009 is $36,000 (that is, $36,000 for the whole year of 2008), your tax payable would be calculated as below:
First $30,000 $350
Next $6,000 at 5.5% $330
Total tax payable $680
Further examples from IRAS can be found on this link
For more details, you may go directly to IRAS Website
