Taxation for individuals in Singapore begins with a key question: are you a resident or not? The answer depends on specific criteria.
An individual is regarded as a tax resident for a particular Year of Assessment if any of the following conditions are satisfied:
- A Singapore Citizen or Singapore Permanent Resident (SPR) who usually resides in Singapore, except for temporary absences.
- A foreigner who has stayed or worked in Singapore for at least 183 days in the previous calendar year.
- A foreigner who has worked in Singapore continuously for three consecutive years.
- A foreigner who has worked in Singapore for a continuous period spanning two calendar years, with the total stay (including physical presence before and after employment) being at least 183 days.
This last rule applies specifically to foreign employees entering Singapore but does not cover directors, public entertainers, or professionals.
For clarity, the “number of days of employment” includes weekends and public holidays. Even temporary absences, like overseas vacation leave, or business trips incidental to employment, still count toward the total days of presence in Singapore for residency determination.
Another point to note is that foreigners issued a work pass valid for at least one year are treated upfront as tax residents.
However, someone who does not meet the tax resident criteria will be treated as a non-resident. The Inland Revenue Authority of Singapore (IRAS) reviews residency status during tax clearance when employment ceases. If the total stay is under 183 days, the individual is regarded as non-resident.
It’s worth noting that residency status doesn’t directly decide if income is taxable — income sourced in Singapore is taxable regardless. What residency does affect, however, is the rate of tax applicable to that income.
Employee vs Self Employed
Understanding whether someone is classified as an employee or self-employed matters greatly.
An employee:
- Works under a contract of service, subject to the employer’s control over how, when, and where the work is done.
- Is not in a position to realize a business profit or bear a loss personally.
By contrast, a self-employed individual:
- Works under a contract for service, often project-based or assignment-based.
- Operates independently, without anyone overseeing the work.
- Has freedom to carry out tasks in their own style.
Examples of self-employed persons include independent consultants, coaches, freelance designers, delivery riders, or online gig workers.
Self-Employed Persons & Individual Partners
Self-employed persons, including all partners in a partnership (even the precedent partner), must report their share of partnership income as part of their personal income in Form B or Form B1.
Business income is always taxable in the sole proprietor’s, partner’s, or self-employed person’s name, and it is added to all other personal income. The total is then subject to personal income tax rates.
Business income includes income from carrying on any trade, business, profession, or vocation. This must be declared in the individual’s personal tax return.
Overseas Employment Income
Since 1 January 2004, overseas employment income received in Singapore has been treated as not taxable. This includes overseas income paid into a Singapore bank account.
That said, overseas employment income may still be taxable in certain cases:
- If the overseas employment is incidental to Singapore employment.
- If the individual is working in Singapore for a foreign employer.
- If the overseas income is for services actually rendered in Singapore.
- If the income is received through a partnership in Singapore (unless exempt).
- If the individual is employed outside Singapore on behalf of the Singapore Government.
So, while the general rule provides exemption, the details matter — especially where the employment is linked back to Singapore in some form.
Shipping Industry – Crew Members
Special provisions apply to seafarers and crew members.
- Crew employed on foreign-registered ships owned by Singapore companies are not exempt. Their employment income is taxable.
- Crew employed on Singapore-registered ships plying international waters, who are not based onshore but board or sail for inspection and related purposes, are exempted from Singapore income tax.
This exemption applies broadly — covering Singapore Citizens, Permanent Residents, and foreigners alike.
Tax Treatment for Individuals
The treatment differs for tax residents and non-residents.
For Tax Residents
- All income earned in Singapore is taxable.
- Deductions on expenses and donations are allowed.
- Net income is taxed at progressive rates ranging from 0% to 22%.
- Foreign-sourced income (except when received through partnerships in Singapore) is exempt when brought into Singapore.
For Non-Residents (61 to 182 days in Singapore)
- Employment income is taxed at the higher of:
- A flat rate of 15%, or
- The progressive resident tax rate.
- Deductions on expenses and donations are allowed, but personal reliefs cannot be claimed.
- Director’s fees, consultant’s fees, and other income are generally taxed at a flat 22%.
Note: Short-term employment of less than 60 days for non-residents is exempt from tax. However, this exemption does not apply to directors, public entertainers, or professionals. For them, all income, including income from services rendered abroad but linked to Singapore, is taxable.
Tax Filing Requirement
Generally, an income tax return must be filed if, in the preceding calendar year:
- Total income exceeded SGD 22,000.
- Self-employed income with net profit exceeded SGD 6,000.
- A non-resident derived income from Singapore.
Individuals selected for the No Filing Service (NFS), usually informed via letter or SMS, are not required to file.
Self-Employed Persons (SEPs), from YA 2021 onwards, may also be selected for NFS if they are under the pre-filling scheme, particularly those with commission income not exceeding SGD 50,000 or driving income as a private-hire/taxi driver.
Deadlines are:
- 15 April for paper filing.
- 18 April for e-filing.
For non-residents who earned income in Singapore during the preceding year, filing an income tax return is mandatory, regardless of income level.
Final Thoughts
The taxability of individuals in Singapore is shaped by residency, source of income, and the nature of employment. On the surface, the rules may look simple, but the details often determine whether income is exempt, taxed at progressive rates, or subject to flat rates.
For employees, understanding residency status is essential since it affects tax rates and filing obligations. For the self-employed, compliance is just as critical because business income gets folded into total personal income. Even overseas employment, which often appears exempt, can fall into taxable territory under specific conditions.
Ultimately, Singapore’s framework balances clarity with control. It ensures that those genuinely based in Singapore contribute their share, while avoiding unnecessary taxation of income earned abroad with no real link to the country. For individuals, the message is clear: keep track of your residency, filing requirements, and sources of income — because these three factors together shape your tax bill in Singapore.
