Re-employment in Singapore

Information on re-employment in Singapore within the same year.

General basis of taxation

Income in Singapore is taxed on the preceding year basis. For example, for the Year of Assessment (YA) 2018, the assessment is for income earned from Jan to Dec 2017.

Re-employment in Singapore within the same year

If you have ceased employment in Singapore and subsequently work with another employer in Singapore in the same year, your total employment income for the year would include income from both employers. 

The following example illustrates the income tax reporting, computation of additional tax payable and other matters relating to a foreign individual re-employed within the same year in Singapore. 

Example 1

Mr Lee ceased employment with ABC company on 29 Sep 2017.  ABC company filed tax clearance (Form IR21) to report his employment income of $70,000 from 01 Jan 2017 to 29 Sep 2017. He is only eligible to claim earned income relief of $1,000.  He paid the tax of $2,580.00 for the YA 2018 on 29 Sep 2017.

He secured an employment with a new employer, DEF Pte Ltd, on 1 Nov 2017.  His total employment income from 01 Nov 2017 to 31 Dec 2017 was $18,000.

(a) Income Tax Reporting: Declaration for the YA 2018

 Scenarios2nd Employer (DEF Pte Ltd) under Auto-Inclusion Scheme (AIS) How to declare in Income Tax Form 
Tax clearance was sought by his 1st employer (ABC company) in 2017  Yes

Mr Lee does not need to declare the employment income from

  1. ABC as tax clearance has been sought, and
  2. DEF as it is under AIS.

He only needs to declare his income from other sources (e.g. rental income) derived in 2017, if any.

No 

Mr Lee does not need to declare the employment income from ABC as tax clearance has been sought.

He needs to only declare

  1. employment income received from DEF, and
  2. income from other sources (e.g. rental income) derived in 2017, if any.

 

(b) Computation of Mr Lee's tax liability for the YA 2018

The employment income from both employers would be aggregated.  As he had exercised employment in Singapore for more than 183 days, he would be treated as tax resident in Singapore and the progressive tax rate will be applied.

 Gross Income  
  $
Employment Income from ABC  (01 Jan 2017 to 29 Sep 2017)      70,000
Employment income from DEF   (01 Nov 2017 to 31 Dec 2017) 18,000
Total income 88,000
Less: Earned income relief   1,000
Chargeable Income 87,000
  
Tax on first $80,000 3,350
Tax on the next $7,000 @11.5%    805
Tax payable 4,155
Less: Tax paid when Mr Lee ceased employment with ABC on 29 Sep 2016                            2,580
Additional tax payable to be paid by Mr Lee 1,575

 

The additional tax payable is due to a higher total income for the year.  The amount is dependent on Mr Lee’s tax residence status and the income that he earned at the time when he ceased employment with ABC Pte Ltd. 

The following examples illustrate these points. 

     

    Example 2

    Change of tax resident status during the year

    Mr Lee commenced employment with ABC Pte Ltd on 1 Jan 2017 and ceased employment on 31 Mar 2017.  He then secured another employment with DEF Pte Ltd on 1 Aug 2017. 

    Mr Lee would be assessed as a non-resident when he ceased employment with ABC as he was employed for less than 183 days in 2017.

    When he was subsequently employed by DEF Pte Ltd, the total employment days in Singapore was more than 183 days.  As a result, Mr Lee would be treated as tax resident for the YA 2018.    

    The effect of the change is shown below: 

      Gross Income
      $
    Employment Income from ABC (1 Jan to 31 Mar 2017 - 90 days)  18,000
    Employment income from DEF  (1 Aug to 31 Dec 2017 – 153 days) 70,000
    Total income 88,000
    Less: Earned income relief   1,000
    Chargeable income 87,000
      
    Tax on first $80,000 3,350
    Tax on the next $7,000 @11.5%     805
    Tax payable4,155
    Less: Tax paid when he ceased employment with ABC ($18,000 @15%)                            2,700
    Additional tax payable to be paid by Mr Lee 1,455

     

    Example 3

    Employee is not taxable on employment income at the time of cessation of first employment due to low income or employment is exercised in Singapore for not more than 60 days in the calendar year.

    Mr Lee commenced employment with ABC Pte Ltd on 1 Jan 2017 and ceased employment on 25 Feb 2017.  His employment income from ABC is not taxable as his period of employment in Singapore was not more than 60 days in 2017.   

    However, as he subsequently commenced employment with DEF Pte Ltd on 1 Jul 2017, his employment period with DEF would be added on to the employment period with ABC.  If the total employment period exceeds 60 days, his employment income for 2017 would be subject to tax.

      Gross Income
      $
    Employment Income from ABC (1 Jan to 25 Feb 2017 – 56 days) 18,000
    Employment income from DEF  (1 Jul to 31 Dec 2017 – 184 days)                         70,000
    Total income 88,000
    Less: Earned income relief 1,000
    Chargeable income 87,000
      
    Tax on first $80,000 3,350
    Tax on the next $7,000 @11.5%    805
    Tax payable4,155 
    Less: Tax paid when he ceased employment with ABC                                                                            Nil 
    Additional tax payable to be paid by Mr Lee4,155 

     

    Other Matters

    1.  GIRO payment

      If Mr Lee was previously paying his income tax via GIRO instalment scheme before he ceased employment with ABC, the payment arrangement would be cancelled upon issuance of tax clearance.  If he wishes to continue paying his tax via GIRO, he can contact us to make the arrangement.
    2. Re-employment within the same year where the subsequent employer is a non-resident employer

      If Mr Lee was subsequently employed by a non-resident employer, to refer to Working for Foreign Employers for more information.

      GIRO instalment scheme is not applicable to foreign individuals who are employed by non-resident employer.  You can refer to other payment modes available for individuals for more information.

     

      RATE THIS PAGE

      • Strongly Disagree
      • Strongly Agree

      Information is easy to understand.

      Information is useful.

      Information is easy to find.

       
      Please email us if you would like us to respond to your enquiries.