All things considered, the first step to meeting your tax obligations is understanding precisely what constitutes taxable income in Singapore. You ought to know what’s taxable and what’s not before you even get to the applicable tax rates.
As such, allow us to walk you through all the types of taxable income in Singapore, as well as the corresponding categories that the IRAS (Inland Revenue Authority of Singapore) will exempt from your personal tax bill.
Taxable and Non-Taxable Income
Generally, you can consider all the earnings generated from Singapore as taxable income. Every single dollar you make as a local or foreign worker is subject to income tax.
Non-taxable income, on the other hand, essentially refers to the money you make outside Singapore. The IRAS, as it turns out, tends to exempt overseas earnings from the personal tax bill.
What is Taxable?
Now, to expound further, “taxable income” refers to the following forms of income earned in Singapore:
- Employment Income: This includes commissions, salaries, bonus earnings, director’s fees, retirement and retrenchment benefits, plus pension.
- Income from your Profession, Business, Vocation, or Trade: This encompasses all the money you make as a sole-proprietor or self-employed individual, earnings from partnerships, plus virtual currency income.
- Income from Government Grants: You should also expect to pay taxes on government grants such as COVID-19 payouts, Wage Credit Payout, Special Employment Credit, PIC Bonus, etc.
- Income from Property or Investments: The IRAS additionally taxes earnings generated from investments and property - including rental income and dividends.
- Other Forms of Income: Taxable income also includes supplementary earnings from Supplementary Retirement Scheme (SRS) withdrawals, winnings, royalties, premiums, annuities, etc.
What is Not Taxable?
Non-taxable income in Singapore includes:
- Overseas earnings wired to Singapore after the 1st of January 2004.
- Capital gains earnings such as yields from the sale of fixed assets.
- Foreign-sourced service earnings, branch profits, and dividends.
Taxable Income Singapore: Over to You
As you begin reviewing where your income lies, feel free to contact Wealthbridge for more insights. Our dedicated tax experts will appraise your earnings accordingly, plus advise you on how best to file your taxes as a resident or non-resident. Learn more about our Singapore taxation services.
If you are looking for other guides related to your personal income tax, then click our detailed guide here.