Income tax is not withheld with payroll in Singapore. Therefore, it is the employee's responsibility to file their annual tax declaration and pay directly to the Inland Revenue Department.
Employers must make monthly CPF contributions for all employees who are Singapore citizens or Permanent Residents (employees working overseas do not qualify for the contribution). CPF contributions fund social benefits, such as retirement, healthcare, homeownership and family protection.
Employee's age group and salary determine CPF contribution rates. Contributions for 1st and 2nd-year Permanent Residents are at graduated rates.
CPF contributions are due for basic wages, overtime pay, cash incentives, allowances, commissions and bonuses. Reimbursements, termination benefits and gifts in kind do not require a CPF contribution.
Monthly contributions get separated into three different accounts through CPF:
Employers contribute 17% of employees' salary for employees aged 55 or below, 13% for employees aged 55-60, 9% for employees aged 60-65, and 7.5% for employees over the age of 65. Subject to a monthly ordinary wage ceiling of SGD 6,000 and a total annual wage ceiling of SGD 102,000.
The SDF provides training grants under the National Continuing Education Training system and supports workforce upgrade programs. Employers contribute 0.25% of employee's gross monthly salary, capped at SGD 11.25 monthly.
Employers who hire foreign employees with Work Permits or S Passes pay monthly levies. The amount is determined by the worker's qualification, the company's sector, and the foreign to residential workers ratio. Employees on Employment Pass, earning SGD 3,000 or more monthly, are exempt from FWL.
Individuals are taxed only on income earned in Singapore and are considered tax residents in a particular year if they are:
Income tax rates depend on an individual’s tax residency status. The taxes are progressive for resident taxpayers, with the highest personal income tax rate at 22%.
Non-residents are taxed at a flat rate of 22% (employment income is taxed at the higher number of either a flat rate of 15% or at the resident rates with personal allowances).
Any salary used for relevant employment expenses, charitable donations, and relief funding such as course fees, exempts income tax.
Married couples file taxes separately.
|TAXABLE INCOME (SGD)||INCOME TAX RATE|
|20,001 - 30,000||2%|
|30,001 - 40,000||3.5%|
|40,001 - 80,000||7%|
|80,001 - 120,000||11.5%|
|120,001 - 160,000||15%|
|160,001 - 200,000||18%|
|200,001 - 240,000||19%|
|240,001 - 280,000||19.5%|
|280,001 - 320,000||20%|
Employees aged 55 or below have to contribute 20% of their ordinary monthly wages (basic wages, overtime pay, cash incentives, allowances, commissions and bonuses), employees age 55-60 contribute 13%, employees aged 60-65 contribute 7.5% and employees aged 65 and over contribute 5%. The contributions are subject to a monthly ordinary wage ceiling of SGD 6,000 and a total annual wage ceiling of SGD 102,000.
This is an optional monthly contribution based on an employee’s ethnic group. The fund goes to the relevant ethnic group welfare, and the amount deducted from the employee’s salary depends on their income level. The ethnic funds available are:
Personal relief and tax rebates are granted only to resident individuals.
Employment expenses are tax-deductible only if they were made wholly and exclusively in the activity generating the income in Singapore. The employee must have incurred these expenses in carrying out their official duties, and cannot:
Generally, individuals can claim a 250% deduction for qualifying donations to approved charities, foundations, and grantmakers.
Life insurance premiums are tax-deductible but subject to certain conditions. The total deduction is capped at SGD 5,000.
An interest expense may be deductible, provided it is incurred wholly and exclusively in taxable income production. Mortgage interest is, therefore, deductible only if the property brings income.
Employees can deduct annual subscriptions they have paid to professional institutes or societies if employment requires membership. Subscriptions to such professional organisations that are not required, however, are relevant to their employment duties provide may also be deductible.
Singapore citizens and permanent residents can claim CPF or an approved pension or provident fund contributions against their taxable income. They are, however, subject to limits prescribed in the CPF Act.
Employees can claim deductions for SRS contributions, which are capped at 15% of income for Singapore citizens and permanent residents and 35% of income for foreigners (capped at SGD 35,700). The claim is against the income earned in the year they made the contributions, subject to income capping rules.
Personal income tax reliefs are subject to a cap of SGD 80,000 per year of assessment. Residents can claim deduction on the following reliefs:
SGD 2,000 if the spouse is living with or supported by the taxpayer and their annual worldwide income is not more than SGD 4,000.
SGD 5,500 for taking care of a disabled spouse. No income threshold applies for this relief.
The lesser of either actual earned income or SGD 1,000 for employees aged 55 or less. The relief is increased for individuals 55 and older or are disabled.
SGD 4,000 for each child under 16 years or in full-time education, as long as their annual worldwide income is less than SGD 4,000.
If the child is disabled, the parent is entitled to an SGD 7,500 instead of the SGD 4,000 qualifying child relief. No income threshold applies for this relief.
This relief is granted for each Singaporean child who satisfies all conditions under the qualifying child relief or disabled child relief. It is a percentage of the mother's earned income, subject to a cumulative maximum of 100% of her earned income. The rates applicable for the first, second, and each subsequent child are 15%, 20%, and 25%, respectively.
The relief for aged parents and grandparents is subject to the dependent's worldwide income not exceeding SGD 4,000. There is no qualifying income threshold for disabled, ageing parents and grandparents.
An SGD 3,000 relief is given to working mothers who get help from parents, grandparents, parents-in-law or grandparents-in-law to take care of their children. This applies if the children are under 12, however, if the children are disabled and unmarried, there is no age cap as of 2020. This relief is on top of the aged dependent relief (above).
Individuals can claim up to SGD 5,500 for course fees, including tuition and examination fees. They need to be for approved academic, professional, or vocational qualifications. The individual has up to two years after they have completed the course to claim the relief.
Individuals who have completed or performed national service are entitled to SGD 1,500 or SGD 3,000 relief. Key appointment holders get an additional relief of SGD 2,000. A relief of SGD 750 against their income is given to Singaporean parents, who do not qualify for national service relief and reservists' wives.
The relief is the lesser of either SGD 7,000 per year or the top-up cash amount to the CPF retirement account made by the taxpayer or the employer. Individuals can claim a further SGD 7,000 relief for top-ups they have made to the accounts of their siblings, parents, parents-in-law, grandparents, grandparents-in-law, and spouse. The taxpayer's siblings and spouse must have an income less than SGD 4,000 to qualify. In addition, individuals who make voluntary contributions to their own CPF healthcare accounts (Medisave) will be allowed tax relief up to a cap of SGD 37,740 minus mandatory contributions for the year.
Rebates against either one or both parents' tax liability of SGD 5,000, SGD 10,000, and SGD 20,000 are available for the first, second, and subsequent Singaporean children.
The personal tax rebate is capped at SGD 200.
Individuals can claim deductions for donations only if they made them to an approved recipient in cash or another acceptable form. The qualifying donations deduction is typically 250% of its value.