Singapore Filing with IRAS: What a Singapore Tax Year Actually Requires

Singapore assesses income tax on a preceding year basis. Income earned in one calendar year is assessed in the following year, which is why the assessment issued in a given year is labelled with that year while relating to the previous one.

For an employee the process is straightforward, and most of it happens without intervention.

The annual cycle

Employers file employment income directly with IRAS under the auto-inclusion scheme, which is mandatory for employers above a size threshold.
Filing season runs from March, with an electronic filing deadline of 18 April.
Many taxpayers receive a no-filing notification, meaning the return is prepared from the information held and nothing needs to be submitted unless something is wrong.
The notice of assessment follows, and payment is due within a month, or by monthly instalments under a GIRO arrangement.

The GIRO instalment option is worth setting up. It spreads the bill across twelve interest free monthly payments rather than requiring a single payment, and it is the normal arrangement for Singapore residents.

Residence and rates

Status	Test	Taxation
Tax resident	Singapore citizen or PR residing here, or present or employed for 183 days or more in a year	Progressive rates from 0% to 24%, with reliefs available
Non-resident, employment under 60 days	Short employment exercised in Singapore	Generally exempt, with exceptions for directors and public entertainers
Non-resident, employment 61 to 182 days	Present or employed in that range	A flat rate on employment income, or resident rates if higher, with no reliefs
Directors' fees and other income	Any non-resident	A separate flat rate

The 183 day test operates on a calendar year basis with a concession for employment spanning two years, which allows periods across a year end to be aggregated. Anyone arriving in the second half of a year should check whether that concession applies, since it is the difference between resident rates with reliefs and a flat non-resident rate.

Tax clearance on leaving

This is the part that surprises foreign employees. When a non-citizen employee ceases employment in Singapore or leaves for more than three months, the employer is required to notify IRAS at least one month in advance and to withhold all monies due to the employee until clearance is given.

The employer files form IR21 notifying the cessation.
The employer withholds the final salary and any other payments due.
IRAS issues a clearance directive stating what must be paid over from the withheld amount.
The balance is released to the employee.

The process usually takes a few weeks and it can take longer where the filing is incomplete. Anyone leaving Singapore should plan for the final payment to be delayed, and should ensure the employer files early rather than on the day of departure.

What is not taxed

Singapore does not tax capital gains, does not tax most foreign source income received by individuals, and does not tax dividends from Singapore companies in the hands of shareholders. There is no inheritance tax.

That combination is a large part of why Singapore compares so favourably on after tax income despite salaries that are not always higher than western European equivalents, which is the point examined in the Singapore comparison.

Employment income is what the calculator covers, and for most employees that is the whole return. Use the Singapore Salary Calculator.