Besides salaries and bonuses – contractual or non-contractual, employment benefits such as housing and stock options will also form part of your taxable income. But as noted above, overseas income derived from outside Singapore, Singapore dividends and bank interest is received by individuals (not through partnerships in Singapore) tax exempt in Singapore.
Taxes on Director’s Fee
As a general rule, director’s fee derived from a company that has no presence in Singapore is not liable to Singapore tax, even if the directors may, on some occasions, conduct their meetings in Singapore. This is because director’s fee is generally sourced in the country where a company is a resident. However, only fee attributable to attending board meetings in Singapore is not liable to Singapore tax. All other payments made for discharging duties carried on within Singapore will be taxable.
Where director’s fee is taxable in Singapore, it will be treated as income of the year in which you are entitled to the fee. This is usually the date of the company’s annual general meeting or when the director’s fee is approved by the board of the company.
Taxes on Commission
Commission refers to a payment you receive in return for service provided. A commission is taxable. If you receive the commission from your employer, it will be taxed as employment income. If you receive the commission as a self-employed individual, it will be taxed as trade income.
Other Employment Income that is Taxable in Singapore
- Allowances such as transport allowance, meal allowance, etc.
- Benefits-in-kind such as club memberships provided by your employer in place of cash
- Contributions made by an employer to pension / provident fund constituted outside Singapore on employment exercised in Singapore, even if you had ceased employment in Singapore at the time the contributions were made
- Salary in lieu of notice/notice pay as compensation for an early resignation or early termination of the contract
- Tax paid by employer – tax paid fully or partially by your employer.
Other Employment Income that is Not Taxable
- Payments for restrictive covenants, which refer to payments received from your employer for entering into a covenant or contractual agreement that restricts your rights. These are not taxable as they are considered capital receipts.
- Compensation for loss of office; and
- Benefits-in-kind granted administrative concession or exempt from Income Tax.
Some examples of benefits-in-kind include sponsored group outings and outpatient treatment.
Figure out all your income sources on which you have to pay personal tax in Singapore by consulting our qualified tax professionals.
Getting Tax Clearance in Singapore
If you are about to leave Singapore or changing to another job within Singapore, you must settle all your taxes. This process is known as tax clearance. For tax clearance, your current employer must notify IRAS and make sure you have paid all taxes before you cease employment with them.
If you still hold any existing stock options or awards on hand which have yet to be exercised or vested, you will be considered to have derived gains from the stock or awards at the point of tax clearance.
Other Taxes in Singapore for Individual
Tax on Rental Income in Singapore
Singapore also imposes an income tax on investment homes, i.e., income tax on the rental income. This means that any profit or the net amount left once you have added together your rental income and deducted any allowable expenses is taxable. Taxes are imposed on rental income that is due and payable to the property’s landlord — and not on the date of receipt itself. Do note that rental income from the letting of property in Singapore is subject to income tax, while the property itself is subject to property tax. A tax resident in Singapore pays resident tax rates on his or her rental income.
Rental income refers to the full amount of rent and related payments you receive when you rent out your property. This includes rent of the premises, furniture, fittings, and maintenance.
Stamp Duty in Singapore
Stamp Duty is a tax on documents relating to immovable properties, stocks or shares including lease/tenancy agreements, mortgages, and share transfer documents. Once the document is signed and dated, the duty needs to be paid, which can be done easily using IRAS’ e-Stamping system.
Motor Vehicle Taxes
These are taxes, other than import duties, that are imposed on motor vehicles. These taxes are imposed to curb car ownership and road congestion and include the various registration fees, excise duty, road tax and special tax.
Calculate your taxable income in Singapore correctly
Salaries, bonuses, employment benefits including housing and stock options all form part of taxable personal income. Our tax consultants can guide you on calculating taxable income correctly