Taxation in Singapore

Singapore Tax:

• The Inland Revenue Authority of Singapore (IRAS) is the main tax administrator to the Government.
• The tax filing fiscal year in Singapore is from the 1st of January to the 31st of December.
• All gains and profits derived by an employee in respect of his employment are taxable, unless they are specifically exempt from income tax or are covered by an existing administrative concession. E.g. salary, bonus, commission and etc.
• The taxability of employment income usually depends on where the services are performed, not on where the payment is made. E.g. overseas income received in Singapore is not taxable and need not be declared in Income Tax Return. This includes overseas income paid into a Singapore bank account.

Singapore Tax (Non-Taxable):

• If an employee seeks reimbursement for an item that has been granted concession or exempt from tax, the reimbursement is not taxable.
  • Reimbursements of medical and dental care/treatment provided to all employee (includes employee’s spouse and children)
  • Per diem reimbursement for business expenses incurred
• Gifts/awards not substantial in value (not exceeding SG$200) is not taxable.
  • Gifts (cash/non-cash) for special occasion or festive season.
  • Recognition for good service award (cash / non-cash)
  • Zero/low Medical Leave (cash / non-cash)
  • Long Service/Retirement (non-cash awards)

Singapore Tax:

• For employers who are enrolled into the Auto-Inclusion Scheme (AIS), they would need to submit electronically the employment income information of their employees to IRAS by 1 March of each year.
• The submitted information will then be automatically included in the employees’ income tax assessment. Hardcopy tax form are not required.
• Participation in the AIS is compulsory for employers with 5 or more employees.
• Employers who have less than 5 employees are encouraged to join the IAS.
• Employers are required to prepare Form IR8A and Appendix 8A, Appendix 8B or Form IR8S (where applicable) for employees.

*IR8S no longer required from YA2026.

Tax Clearance (IR21)

• When a non-Singapore citizen employee ceases employment in Singapore or plans to leave Singapore for more than three months, the employer is responsible to ensure that he/she pays all taxes. Applies to all work pass holders including Personalised Employment Pass (PEP) holders.
• Filed IR21 at least one month before the employee ceases employment in Singapore and withhold any monies due to the employee at this time.
• There will be a Late Filing Fee penalty if the employer files Form IR21 late or fail to file. The employer may even be summoned to Court.
• Once IR21 has been processed, a tax bill will be sent to the employee. He/she will need to pay the difference if the amount withheld by the employer is insufficient to pay his/her taxes.
• Please obtain a Letter of Undertaking (LOU) from the employee stating that he will not leave Singapore permanently. With the LOU, you are not required to file the Form IR21 for one employee.

Goods and Services Tax (GST)

GST is a value-added tax levied on most goods and services in Singapore. Since 1 January 2024, the GST rate is 9%.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Singapore employment laws and regulations, please visit the official governmental websites.

Updated on: June 2025