How Much Money Do You Actually Take Home If You Earn The Median Salary in Singapore

Once you understand your personal cash flow, or can accurately predict it, you can start planning a monthly budget that makes sense. This can help you responsibly build savings towards your children’s education, your own retirement, as well as other big-ticket expenses.

In general, you have to account for 5 main ways your disposable income will shrink compared to your actual monthly salary. To illustrate this, let’s take an example of a person earning the median salary of $5,500 each month.

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#1 Monthly CPF Contributions

First up, CPF carves out about 37% of your salary for contributions into your Ordinary Account (OA), Special Account (SA) and Medisave Account (MA).

MOM’s stated median income of $5,500 includes your employer’s CPF contribution, worth up to 17% of your salary. Without employer CPF contributions, the median salary falls to $4,860 a month.

This, though, still includes your employee CPF contributions – which can be as much as 20% of your monthly salary. This means that you will contribute another $972, and be left with $3,888 take home per month.

This isn’t to say all this money is yours to spend as you wish as there are other cost areas you need to set aside this money for.

#2 Paying Income Tax

Benjamin Franklin, the guy on the US$100 bill, famously said that “nothing in this world can be said to be certain, except death and taxes”.

Regarding how much you can spend, he’s absolutely right. From your salary, you have to ensure you set aside enough to pay your taxes. Your taxes for the year are calculated based on the previous year’s salary.

Someone who earns $5,500 a month does not have to pay taxes on the full amount. As CPF contributions are not taxed, you will only have to pay tax on your take-home pay of $3,888. You will also be eligible for other tax deductions including an NSman, NSman wife or NSman parent relief (between $750 and $5,000). Most people will qualify for a minimum of $750 to $1,500, so we’ll take $1,125 as a rough average for everyone, as well as an earned income relief of $1,000.

This means your annual chargeable income should amount to $44,531 (or ($3,888 x 12 months) – $1,125 – $1,000) for 2024. There are no charges on your first $20,000 of income, 2% for your next $10,000, 3.5% for your next $10,000, and 7% for your next $40,000 of income. This will amount to approximately $867 for the year or $72 a month. You can apply to pay this amount monthly.

Note that in certain years, there may also be further income tax relief. For example, as part of the SG60 package in 2025, there is a Personal Income Tax (PIT) rebate of up to 60%, capped at $200 per tax payer. So, your income tax will reduce to $667 a year or $55.60 a month in 2025.

Read Also: Complete Guide To Personal Income Tax Rates And Income Brackets In Singapore

#3 Staying In Singapore (Property Tax, S&CC, GST)

You and your family have to live somewhere. This means you have to pay property taxes and Service & Conservancy Charges (S&CC).

In Singapore, the most common type of home is probably an HDB 4-room flat, and its median annual value (AV) is $15,540. Based on this, you can expect to pay a property tax of $142 in 2025.

You also have to pay a monthly S&CC of around $70 a month or $840 a year for a 4-room flat.

Finally, the basket of goods that your take-home pay can buy is also diminished by 9% – as you have to pay GST on goods and services in Singapore. According to the Household Expenditure Survey, Singapore households spent $5,931 a month on average. This translates to paying about $534 a month or $6,405 a year on GST.

In total, these costs will add up to about $7,387 a year.

#4 Work-Related Expenses

Many peripheral expenses come with holding down a job in Singapore. For this article, we’ll take into account basic expenses you will incur if you have a job, but can probably live without if you don’t have a job.

Mainly, this could mean having presentable working clothes and shoes, commuting to work and eating lunch out and some entertainment expenses with colleagues or work acquaintances.

Here’s a rough and inexhaustive list, and ballpark costs of some of the things we think are basic requirements to get and hold a job in Singapore.

There are also other types of costs that you have to incur to hold down a job, such as having a laptop mobile phone and home broadband and mobile data access. However, you can expect those who do not have jobs to also incur such expenses.

Many of you will also spend more on coffee and tea in the morning and after lunch, buy office snacks, spend on more expensive lunches and drinks to socialise and network with colleagues, business partners and acquaintances.

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Each day, you’re already at work for close to 10 hours. Add the amount time you take to travel to and back from work and you’re spending half your day on work. For the sake of saving time, many may also put your children in childcare, spend on laundry services, home cleaning services, eat out more often and even take cabs more often.

Through the years, we also have to invest in ourselves, either through a Master’s degree, professional certification (such as CFA or CPA) or other skills upgrading courses. Even with SkillsFuture, many of these courses require additional expenses.

How Much We Actually Have In Disposable Income

Taking the above costs into consideration, here’s how much of your median salaries will be left.

$5,500 (median income)

Minus CPF contributions of $640 (employer’s CPF contribution) and around $972 (employee’s CPF contribution)

= $3,888 (take home pay)

Minus income tax $72

= $3,816 (salary after tax)

Minus baseline cost of stayin in Singapore, worth $142 (property tax), $70 (S&CC), and $534 (GST)

= $3,070

Minus direct work-related expenses of at least $625

=$2,445

You should note that this is a conservative estimate, and you could actually have less in hand if you have other financial commitments you have to pay for each month. For instance, if mortgage is not taken care of by your CPF contributions, it would mean even less disposable income for you.

You Should Also Calculate Other Fixed Expenses

While $2,445 might seem like a fair bit of money after making CPF contributions and paying for fixed costs you have, this does not even take into account indirect expenses you may incur as part of your job as well as other non-negotiable expenses in life, such as utilities, groceries, healthcare and other types of expenses, such as insurance, children’s education and recreational activities.

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