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Individual Income Tax (Local)
In Singapore, as long as you are an individual earning an income in Singapore, you are subjected to pay income taxes.
What is individual income tax
You need to pay income tax on all income you have earned / received in Singapore.
Overseas income which was received in Singapore (including those paid into a Singapore bank account) on or after 1 Jan 2004 is not taxable. This does not apply to overseas income received in Singapore through partnerships in Singapore.
Income tax is assessed based on a preceding year basis. For example, for Year of Assessment 2008, you will be taxed on the income earned in year 2007.
Commonly used tax terms
Year of Assessment (YA)
'Year of Assessment (YA)' refers to the tax year in which income tax is calculated and charged. Each YA begins on 1 Jan and ends on 31 Dec.
Example: YA 2008 refers to the tax period 1 Jan 2008 to 31 Dec 2008.
Basis period
'Basis period' refers to the period that the income is earned, for a particular YA. The basis period for a particular YA is always the previous year of that YA.
Example: The basis period for YA 2008 is 1 Jan 2007 to 31 Dec 2007.
This does not apply if you receive business income and the accounting period of your business does not end on 31 Dec each year.
Notice of Assessment (NOA)
'Notice of Assessment' refers to your tax bill. It shows the types of income and amount of income subject to tax, calculates the tax amount you need to pay and shows the deductions given, as well as the credit balance to be refunded to you.
Assessable income
'Assessable income' is your total income less approved donations.
The total income shown on your tax bill is the net amount after deducting your expenses claim, if any.
Example: 'Employment' income shown is the net amount after deducting your employment expenses. 'Property' income shown is the net rental income after deducting your rental expenses.
Personal reliefs
'Personal reliefs' are the deductions which help you to save tax. Find out more about reliefs.
Chargeable income
'Chargeable income' is your 'assessable income' less 'personal reliefs'.
Who are tax residents
You are considered a tax resident for a particular Year of Assessment (YA) if you are: a Singaporean; or a Singapore Permanent Resident (SPR) and have established your permanent home in Singapore; or a foreigner who has stayed in Singapore for 183 days or more in the year preceding the YA; or a foreigner (who is not a director of a company) who has worked in Singapore for 183 days or more in the year preceding the YA.
Tax residents may claim expenses, donations and tax reliefs to help them save tax. Find out more about deductions to save tax.
If you are a tax resident, your total income less deductions (expenses, donations and tax reliefs) will be subject to tax at progressive rates ranging from 0% to 20%.
Who are non-residents
You are considered a non-resident for a particular YA if you are a foreigner who stayed or worked in Singapore for less than 183 days in the previous year.
Non-residents may claim expenses and donations to save tax. However, non-residents are not eligible to claim tax reliefs.
If you are a non-resident, your employment income is taxed at 15% or the resident rate, whichever gives rise to a higher tax amount. Director fees, consultant fees and all other incomes are taxed at 20%.
Last Updated: 08 November 2008
