It’s tax season again… >.<
Today’s post provides an overview of personal income tax (with Budget 2022 updates) as well as personal income tax rebates & reliefs.
Individual Income Tax
First off, your individual income tax depends on whether you are a Singapore tax resident.
Singapore’s personal income tax rates for resident taxpayers are progressive (you earn more, pay more).
The current highest personal income tax rate is 22%.
Personal Income Tax Calculator for Singapore residents
What’s new with Budget 2022?
The top marginal personal income tax rates will be increased from YA 2024.
Chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, while that in excess of $1 million will be taxed at 24%; both up from the current rate of 22%.
Personal Income Tax for Non-Residents
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
The tax rate for non-resident individuals is currently at 22%.
It applies to all income including rental income from properties, pension and director’s fees, except employment income and certain income taxable at reduced withholding rates.
From YA 2024, the income tax rate for non-resident individuals (except on employment income and certain income taxable at reduced withholding rates) will be raised from 22% to 24%.
Tax Calculator for Non-Residents
Personal Income Tax Relief + Rebates
For Singapore tax residents, you may be able to enjoy the following tax reliefs & rebates!
Broadly, the available tax reliefs include:
- CPF Relief
- You may claim CPF Relief for making employee CPF contributions on wages that have not exceeded the Ordinary Wage ceiling ($6k/month) and Additional Wage ceiling ($102,000 less Total OW subject to CPF).
- For Employees
- For Self-Employed
- NS Man Relief
- Self, Wife and Parent
- You do not need to claim this relief as IRAS will automatically grant it to you based on your eligibility.
Married Couples and Families
If your child was born in 2021, child-related reliefs and rebates in respect of him/her will be considered with effect from YA 2022.
- Parenthood Tax Rebate
- Parenthood tax rebate is given to tax residents to encourage them to have more children
- You and your spouse may share the PTR based on an apportionment agreed by both of you
- Foreign Domestic Worker Levy Relief
- Working Mother Relief
- Working mother relief
- Grandparent caregiver relief (only for working mothers)
- Tax relief for handicapped
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Tax Deductions
Broadly, you may be able to enjoy the following tax deductions:
- Rental expenses
- The net rental income after deduction of any allowable expenses is subject to income tax.
- For jointly owned property, the rental income is taxed on all the joint owners based on their legal share in the property.
- Expenses incurred solely for producing the rental income and during the period of tenancy may be claimed as tax deduction.
- Allowable and non-allowable rental expenses (do check out the full table!)
- To simplify tax-filing, an amount of deemed rental expenses calculated based on 15% of the gross rent will be pre-filled in the online tax form. In addition to the 15% deemed rental expenses, property owners may still claim mortgage interest on the loan taken to purchase the tenanted property.
- Expenses incurred solely for producing the rental income and during the period of tenancy may be claimed as tax deduction.
- Donations
- Donations
- Budget 2021: 250% tax deduction for qualifying donations will be extended for another two years till 31 December 2023
- You do not need to declare the donation amount in your income tax return. Tax deductions for qualifying donations will be automatically reflected in your tax assessments based on the information from the IPC (such as the donor’s name, date and amount of donation on the tax deduction receipt). IRAS will no longer accept claims for tax deduction based on donation receipts.
- Donations
- Employment expenses
Allowable employment expenses must satisfy all the following conditions:
- Incurred while carrying out your official duties;
- Not reimbursed by your employer; and
- Not capital or private in nature.
Examples of allowable expenses
- Entertainment expenses incurred in entertaining clients. Your share of the entertainment (e.g. meal) expenses must be excluded from the claim
- Mosque building fund, zakat fitrah or any other religious dues authorised by law
- Subscriptions paid to professional bodies or society for professional updates, knowledge and networking
- Travelling expenses incurred on public transport, such as buses, trains, taxis
Working from home expenses (*new!*)
- Electricity and telecommunication charges
- You may compare the bills before and after working from home. For example, if the electricity charges before and after working from home is $50 and $60 respectively, the difference of $10 can be claimed as deduction, being expenses incurred for work purposes.
- WiFi expenses
- The monthly subscription fee may be claimed as a deduction only if the WiFi was set up to enable you to work from home. No deduction can be claimed if the WiFi was set up prior to working from home. One-time charges, such as installation or connection fees, also cannot be claimed as they are capital in nature.
- If there are more than one person working from home in the same household, IRAS is prepared to accept an equal apportionment basis for computing the amount of shared expenses applicable to each person.
- Self-employed and partnerships
Other Tax Relief
Other forms of tax relief you may be eligible for:
- Life Insurance Relief
- You may claim only if your employee/self-employed/voluntary CPF contributions in 2021 was less than $5,000
- Course Fees Relief
- You may claim the actual course fees incurred by yourself, up to a maximum of $5,500 each year
- SRS Contributions
- Contributions to SRS are eligible for tax relief. Investment returns are tax-free before withdrawal and only 50% of the withdrawals from SRS are taxable at retirement.
- Yearly maximum for SC/PRs is $15,300; Foreigners is $35,700
- Check out our guide to SRS contributions
- CPF Cash Top-Up Relief
- The maximum CPF Cash Top-up Relief per Year of Assessment is $14,000 (maximum $7,000 for self, and maximum $7,000 for family members)
- CPF Cash Top-up Relief is granted automatically to those who are eligible based on records sent to IRAS by the CPF Board
- Medisave Contributions
- Voluntary Medisave contributions may be claimed as tax reliefs to reduce the amount of tax payable.
$80,000 Personal Income Tax Relief Cap
A personal income tax relief cap of $80,000 applies to the total amount of all tax reliefs claimed (including relief on compulsory/voluntary CPF contributions) for each Year of Assessment.
There will be no refund for accepted voluntary CPF contributions.
What happens if you’ve forgotten to claim/ need to amend?
If you e-Filed your Income Tax Return…
You may re-file within 7 days of your previous submission or by 18 Apr, whichever is earlier. You will only be able to re-file once.
When you re-file, you must include all your income details, expenses, donations and relief claims, where applicable. Once you have re-filed successfully, your new submission will override the previous submission.