Its not that cheap!

As usual March and April are tax return period. In that period the tax payer should files their income report for the previous year and waiting for the tax assesment. So easy.

When I was starting to work in Singapore, I thought (or at least people tell me) that Singapore has low tax rate. But low tax rate doesn’t mean cheap – it will drastically increase when you have reach certain amount.  I copy the tax tariff from  IRAS.

Chargeable IncomeRate (%)Gross Tax Payable ($)
First $20,000
Next $10,000
0
3.50
0
350
First $30,000
Next $10,000

5.50
350
550
First $40,000
Next $40,000

8.50
900
3 400
First $80,000
Next $80,000

14
4 300
11 200
First $160,000
Next $160,000

17
15 500
27 200
First $320,000
Above $320,000

20
42 700

Check the tariff  in red. Starting from annual income of 40.000 SGD – the tax payable is 8.5%.

                  0   –   40.000         => 900  (2.25%)
                 next  40.000         => 8.5%

A year, you work for 12 month where you earn 100% of your total annual salary. Therefore your monthly salary contribute to the 100% / 12 = 8.33% of your annual income. 

From the table- your gross tax payable is 

                      (2.25% + 8.5%) / 2 = 5.375%

or more than half month salary! And you can continue the calculation – for the next band. Finally on the top band, you will end up with paying more than your monthly salary for the tax.  I can not believe it!

March 20, 2010 · cakriwut · No Comments
Tags: ,  · Posted in: Singapore, Society

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