If I am employed by a foreign employer

Who are foreign employers?

Foreign employers include representative offices registered with International Enterprise Singapore and other entities not registered in Singapore. Foreign employers are considered as non-resident employers for tax purposes.

Do I have to pay tax if I am employed by a foreign employer?

• You will be taxed on income earned for the period you rendered services in Singapore even if your employer is not a resident in Singapore, or your income is not paid in Singapore. This also applies if your employer sends you here for training, operating of machinery, conducting and attending meetings.
• Taxable income includes salary, bonus, allowances, honorarium, per diem, accommodation, leave passages, and value of any benefits-in-kind (e.g. food, transport) provided to you by your employer.
• Any allowances received from local sponsor companies are also taxable.

How will I be taxed?

• If you work in Singapore for 60 days or less in a calendar year, you will be exempted from tax on your earnings here. This rule does not apply if your stay covers three continuous years or more.
• If you stay or work in Singapore for 61 to 182 days in a calendar year, your income will be taxed at 15% or resident rates for individuals, whichever gives the higher tax.
• If you stay or work in Singapore for 183 days or more in a calendar year, your income will be taxed at resident rates for individuals.
• If you stay or work in Singapore for three consecutive years, your income for all years will be taxed at resident rates.
• The income tax filing takes place during March to April each year. After you have filed your tax return, you will receive a tax bill (Notice of Assessment). You must pay your tax within one month from the date of the tax bill. Payment by GIRO instalment is not applicable for employees of foreign employers.

Letter of Guarantee (LOG) Requirement

• A non-Singapore citizen is required to forward a Letter of Guarantee (28KB) from a local bank or an established limited company in Singapore, to cover the estimated tax payable for the coming Year of Assessment.
• LOG issued by a Representative Office is not acceptable.
• The LOG has to be submitted to IRAS on a yearly basis.
• In the absence of the LOG, an advance assessment will be issued to you and you are required to settle your tax in full.
• Note: You are still required to file the income tax return even if you have submitted the LOG or if an advance assessment has been issued to you.

Clearance Obligations

• Your employer should complete the Form IR21  [ word version  (329KB), pdf version  (429KB) ] (tax clearance for foreign employees) at least one month before you cease employment or leave Singapore.
• All taxes must be paid before you leave Singapore.
• If you are claiming for exemption from Singapore income tax in respect of Dependent Personal Services rendered in Singapore, please see Exemption under Avoidance of Double Taxation Agreement.

Schemes to reduce your tax liability

To save tax, please see:

Exemption under Avoidance of Double Taxation Agreement (DTAs)

If you are a tax resident of a country that has a tax treaty with Singapore, it may protect you from being taxed twice on the same income. This depends on the provisions of the tax treaty. The tax treaty article for Dependent Personal Services may provide for exemption from Singapore income tax if certain conditions are met.

How to claim for tax exemption in Singapore

Please use our Tax Treaty Calculator for Personal Services Rendered by Employees (213KB) to check if you are eligible for tax treaty exemption. If you are eligible for tax treaty exemption, you should complete and submit the Claim for Tax Treaty Exemption and Certificate of Residence to IRAS. 

Related Items

FAQs

Scenario 1 (Japanese engineer working in Singapore)

Japan Headquarters (HQ) sent me, an engineer, to Singapore to assist in the Singapore operation for one year. I remained under the employment of the Japan office. My salary continued to be paid in Japan by the Japan HQ. The Singapore company did not incur any charges or expenses for my stay in Singapore, except for the housing fees for my apartment.

Scenario 2 (PRC national in Singapore for training)

I am a national of People's Republic of China employed by a subsidiary company in China. I came to Singapore in July 2012 for six months training at the Singapore Headquarter Office. I am on a training work permit pass. I am paid an overseas/training allowance at S$20 to S$40 per day by the Singapore Headquarter Office. The allowance will be re-charged to the subsidiary company in China.

Scenario 3

I am employed by the HQ office in my home country to work in Singapore for three years. I do not qualify for tax treaty exemption and will be taxed on the income I earn in Singapore.