Singapore’s personal income tax system is one of the most favourable for foreign professionals in the world — yet it surprises newly arrived Employment Pass holders precisely because it works differently from the systems they left behind. If you hold a Singapore Employment Pass, S Pass or Personalised Employment Pass in 2026, this guide covers the rules that apply to you: who pays what, which reliefs reduce your bill, and how to file correctly with the Inland Revenue Authority of Singapore (IRAS). For context on whether an EP is right for your role, see our Complete Singapore Employment Pass Guide 2026.
The headline numbers are compelling. Singapore’s top marginal rate for tax residents is 24% — well below the combined rates professionals pay in New York, London or Sydney. There is no capital gains tax and no dividend withholding tax on most Singapore-company distributions. Most senior EP holders pay an effective rate of 12–18%.
Tax Residency: The Foundation of Singapore Income Tax for EP Holders
Tax residency is determined each year independently of your immigration status. Per the Inland Revenue Authority of Singapore, you are a Singapore tax resident for a Year of Assessment (YA) if you: (a) are a Singapore Citizen or Permanent Resident who normally resides here; (b) are a foreigner who worked here for a period straddling two calendar years with an aggregate stay of at least 183 days; or (c) hold a valid work pass issued for at least one year. In practice, almost every full-year EP holder qualifies as a tax resident. Residents pay progressive rates of 0–24%; non-residents pay a flat 15% on employment income (or the progressive rate if that is higher).
The 183-Day Rule and Straddling-Year Protection
Mid-year arrivals who are present in Singapore for fewer than 183 days in a single calendar year but whose employment straddles two calendar years with an aggregate of at least 183 days are still treated as tax residents for both years. This protects new joiners from non-resident treatment in their first partial year. If you are unsure of your status, use the IRAS residency checker at myTax Portal (mytax.iras.gov.sg).
Singapore Resident Tax Rates for YA 2026
Singapore taxes on a preceding-year basis. Your YA 2026 return (filed between 1 March and 18 April 2026) covers income earned in calendar year 2025. The progressive resident rates, per IRAS, are:
| Chargeable Income (S$) | Rate | Tax on Band |
|---|---|---|
| First S$20,000 | 0% | S$0 |
| Next S$10,000 | 2% | S$200 |
| Next S$10,000 | 3.5% | S$350 |
| Next S$40,000 | 7% | S$2,800 |
| Next S$40,000 | 11.5% | S$4,600 |
| Next S$40,000 | 15% | S$6,000 |
| Next S$40,000 | 18% | S$7,200 |
| Next S$40,000 | 19% | S$7,600 |
| Next S$40,000 | 19.5% | S$7,800 |
| Next S$40,000 | 20% | S$8,000 |
| Next S$180,000 | 22% | S$39,600 |
| Next S$500,000 | 23% | S$115,000 |
| Above S$1,000,000 | 24% | — |
An EP holder with S$120,000 of chargeable income (after reliefs) pays approximately S$13,950 in income tax — an effective rate of about 11.6%. At S$200,000 chargeable income, the effective rate is around 15.4%.
Non-Resident Tax Rates
If you do not qualify as a tax resident for a given YA, employment income is taxed at 15% flat — or the progressive resident rate, whichever is higher. Director’s fees and most other non-employment income are taxed at 24%. Non-residents cannot claim personal reliefs. The non-resident rate most commonly applies to short-term contractors and visiting officers on a Training Employment Pass or Miscellaneous Work Pass whose total Singapore stay is under 183 days.
Key Tax Reliefs for EP Holders and Expats in 2026
Tax residents can claim personal reliefs that reduce chargeable income before tax is calculated. Foreign EP holders cannot claim CPF Relief but can claim:
Earned Income Relief
S$1,000 for those below age 55; S$6,000 for ages 55–59; S$8,000 for ages 60 and above. Higher amounts apply for persons with disabilities. This relief is automatic for all employed tax residents.
Course Fees Relief
Up to S$5,500 per year for approved Singapore institution course fees relevant to your employment or trade. Retain receipts for five years.
SRS Contributions Relief
The Supplementary Retirement Scheme (SRS) allows EP holders and other non-CPF contributors to contribute up to S$35,700 per year (the foreigner cap) to a tax-advantaged account, reducing chargeable income dollar for dollar. At withdrawal (age 62 or later), only 50% of each withdrawal is taxable. SRS is one of the most powerful tax-planning tools available to employed foreigners in Singapore — and widely underused.
Life Insurance Relief
Up to S$5,000 for life insurance premiums on policies on your own life. EP holders, who make no CPF contributions, typically satisfy the eligibility condition automatically.
Parent and Dependant Relief
If you support a parent, parent-in-law or grandparent aged 55 or above in Singapore who is not working, you may claim S$9,000 per qualifying dependant (S$14,000 if they live with you). Reliefs also exist for spouses, handicapped siblings and children, subject to income thresholds.
Filing Your Return: Deadlines and Process
Most employed EP holders are covered by the Auto-Inclusion Scheme (AIS), under which employers submit Form IR8A salary data to IRAS by 1 March each year. IRAS then pre-fills your return at myTax Portal. Log in using Singpass, verify the pre-filled figures, add any additional income, claim your reliefs and submit before 18 April. If your employer is not on AIS, you must enter employment income manually using the IR8A they provide.
What Singapore Does NOT Tax
Singapore does not tax: capital gains from selling shares, property or other assets; dividends from Singapore-resident companies paid under the one-tier system; and foreign-sourced income not remitted to Singapore. These exemptions mean Singapore-based EP holders can receive overseas investment income, share sale proceeds and foreign dividends without Singapore income tax — subject to specific conditions on the remittance exclusion.
Tax Clearance (IR21) When You Leave Singapore
When an EP holder ceases employment in Singapore, the employer must file Form IR21 with IRAS at least one month before the employee’s last day or departure date (whichever is earlier). IRAS computes all tax due to date of cessation and issues a clearance directive. The employer must withhold all monies until the directive is received. Failure to file on time attracts penalties for the employer.
Tax Planning as You Approach Singapore PR
For EP holders on the path to Singapore Permanent Residency, the CPF regime begins upon PR approval. CPF contributions are claimable as CPF Relief on your IRAS return, meaningfully reducing your chargeable income each year. The CPF for PRs and new citizens guide covers the graduated contribution schedules in full.
Conclusion
Singapore’s personal income tax system offers genuine advantages for foreign professionals: low progressive rates, no capital gains tax, meaningful reliefs, and a straightforward filing process. For Employment Pass applications, pass renewals and long-term immigration planning in Singapore, the licensed advisers at Singapore Employment Agency are here to help. For entity-level tax planning, company formation and accounting, speak with the team at Raffles Corporate Services.
— The Editorial Team, Little Big Employment Agency