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Complete Guide To Personal Income Tax Rates And Income Brackets In Singapore

Your effective income tax rate will always be lower than your income tax bracket.


Personal Income Tax amounted to $14.22 billion in 2022, accounting for over 17% of the Singapore government’s total operating income. This is a significant source of revenue for the government, and the second-largest behind Corporate Income Tax.

Like many other countries, Singapore employs a progressive income tax system. The tax rate is divided into 10 tax brackets – a feature that ensures those who earn more don’t just pay more, but also pay a larger portion of their income.

This is very different from how Corporate Income Tax works, which is a flat 17% in Singapore – regardless of how much or little profit a company generates.

Which Income Tax Bracket Do You Fall Within?

How much you end up paying in income tax is dependent on the income tax bracket that you fall into.

There are 10 income tax brackets (which will increase to 11 from YA2024, levying higher taxes on the highest-paid individuals). As you can see in the table below, those who earn $20,000 and below do not have to pay any income tax at all. You can also observe that the rates gradually increase the more a person earns. This tops out at 22% of income tax for those earning more than $320,000 a year in YA2023 (and will increase to up to 24% for those earning more than $1 million in YA2024).

Chargeable Income in YA2023 Income Tax Rate Gross Tax Payable
First $20,000
Next $10,000
0%
2%
$0
$200
First $30,000
Next $10,000

3.5%
$200
$350
First $40,000
Next $40,000

7%
$550
$2,800
First $80,000
Next $40,000

11.5%
$3,350
$4,600
First $120,000
Next $40,000

15%
$7,950
$6,000
First $160,000
Next $40,000

18%
$13,950
$7,200
First $200,000
Next $40,000

19%
$21,150
$7,600
First $240,000
Next $40,000

19.5%
$28,750
$7,800
First $280,000
Next $40,000

20%
$36,550
$8,000
First $320,000
In excess of $320,000

22%
$44,550
22% of excess income

Source: Income Revenue Authority of Singapore (IRAS)

In YA2024, those earning in excess of $320,000 will be further sub-divided to ensure those earning more end up paying more as well.

Chargeable Income in YA2023 Income Tax Rate Gross Tax Payable
First $20,000
Next $10,000
0%
2%
$0
$200
First $30,000
Next $10,000

3.5%
$200
$350
First $40,000
Next $40,000

7%
$550
$2,800
First $80,000
Next $40,000

11.5%
$3,350
$4,600
First $120,000
Next $40,000

15%
$7,950
$6,000
First $160,000
Next $40,000

18%
$13,950
$7,200
First $200,000
Next $40,000

19%
$21,150
$7,600
First $240,000
Next $40,000

19.5%
$28,750
$7,800
First $280,000
Next $40,000

20%
$36,550
$8,000
First $320,000
Next $180,000

22%
$44,550
$39,600
First $500,000
Next $500,000

23%
$84,150
$115,000
First $1 million
In excess of $1 million

24%
$199,150
24% of excess income

 

Calculating Your Effective Tax Rate

While many people may think they are taxed at their personal income tax bracket, the reality is that different tranches of your income will be taxed at a different rate.

For example, if you earn $80,000, you can see that you fall into the 7% tax bracket. However, you can also see that you only need to pay $3,350 in income tax. If you’re crunching the numbers on your own, 7% of $80,000 is actually $5,600 – and you’re only required to pay a lower amount.

This is because regardless of how much we earn, we also enjoy progressive taxes on our income. This means our first $20,000 will not be taxed at all. Similarly, our next $10,000 will be taxed at 3.5%, and so on. Hence, your effective income tax rate will always be lower than the income tax bracket that you fall within.

Read Also: Complete Guide To Filing Your Personal Income Tax In 2023

For those who earn $80,000 annually, this is how you personal income tax is calculated:

  • first $20,000 is taxed at 0%, and you pay nothing on it
  • next $10,000 is taxed at 2%, and you pay $200
  • next $10,000 is taxed at 3.5%, and you pay $350
  • next $40,000 is taxed at 7%, and you pay $2,800

That’s why you will end up paying only $3,350 in personal income tax. While you may fall in the 7% income tax rate bracket, your effective income tax rate is only 4.19%.

Here’s the effective rate that each person who earns the maximum within their income tax bracket.

Chargeable Income in YA2023 Gross Tax Payable Income Tax Rate Bracket Effective Income Tax Rate
First $20,000 $0 0% 0%
First $30,000 $200 2% 0.67%
First $40,000 $550 3.5% 1.38%
First $80,000 $3,350 7% 4.19%
First $120,000 $7,950 11.5% 6.63%
First $160,000 $13,950 15% 8.72%
First $200,000 $21,150 18% 10.58%
First $240,000 $28,750 19% 11.98%
First $280,000 $36,550 19.5% 13.05%
First $320,000 $44,550 20% 13.92%
In excess of $320,000 22%

You Only Pay Personal Income Tax On Chargeable Income

Going one step backwards, before we even consider our income tax rate bracket or calculate our effective income tax, we need to understand that we only have to pay income tax on chargeable income.

First and foremost, we do not have to pay personal income tax on our CPF contributions. This means that if we earn a salary of $5,000 a month, or $60,000 a year, in 2022, our chargeable income will only be $48,000 as we have a 20% employee CPF contribution for those under 55. We are also not charged income tax for our employer CPF contributions

In Singapore, there are also various tax deductions for individuals you may qualify for. One relief everyone qualifies for is the Earned Income Relief, for those below 55, the Earned Income Relief is $1,000, for those 55 to 59, the Earned Income Relief is $6,000, and for those 60 and above, the Earned Income Relief is $8,000.

Read Also: 8 Ways You Can (Legally) Reduce Your Income Tax For YA 2023

For example if we are below 55 and earned $81,000 during the year, we can claim an Earned Income Relief of $1,000, among other applicable reliefs. Apart from just reducing how much we have to pay in personal income tax, we also lower our income tax bracket from 11.5% to 7%. However, since taxes are progressive, what we’re saving is 11.5% on the $1,000 that would have taken our income above the $80,000 tax bracket. In short, we save $115 – and not 4.5% on our entire $80,000 chargeable income.

Understanding the various tax deductions you qualify for can be significant, especially for those that fall in higher income tax brackets. The personal income tax relief cap is $80,000 for each year of assessment.

If you’re still unsure how much you have to pay in taxes, you can use this calculator from IRAS to compute your income tax liability. You can also determine the deductions and reliefs you qualify for to ensure you don’t end up paying more than necessary in taxes.

Read Also: Here’s What Happens If You Don’t File Your Taxes On Time In Singapore

This article was first published on 23 March 2020 and updated to include the latest information for YA2023.

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