General basis of taxation
Income in Singapore is taxed on the preceding year basis. For example, for the Year of Assessment (YA) 2023, the assessment is for income earned from Jan to Dec 2022.
Re-employment in Singapore within the same year
If you have ceased employment in Singapore and subsequently worked 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 30 Sep 2022. ABC company filed tax clearance (Form IR21) to report his employment income of $70,000 from 01 Jan 2022 to 30 Sep 2022. He is only eligible to claim Earned Income Relief of $1,000. He paid the tax of $2,580.00 for the YA 2023 on 30 Sep 2022.
He secured an employment with a new employer, DEF Pte Ltd, on 1 Nov 2022. His total employment income from 01 Nov 2022 to 31 Dec 2022 was $18,000.
(a) Income Tax Reporting: Declaration for the YA 2023
| Scenarios | 2nd 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 2022 | Yes | Mr Lee does not need to declare the employment income from
He only needs to declare his income from other sources (e.g. rental income) derived in 2022, if any. |
| Tax clearance was sought by his 1st employer (ABC company) in 2022 | No | Mr Lee does not need to declare the employment income from ABC as tax clearance has been sought. He needs to only declare
|
(b) Computation of Mr Lee's tax liability for the YA 2023
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 2022 to 30 Sep 2022) | 70,000 |
| Employment Income from DEF (01 Nov 2022 to 31 Dec 2022) | 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 30 Sep 2022 | 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 2022 and ceased employment on 31 Mar 2022. He then secured another employment with DEF Pte Ltd on 1 Aug 2022.
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 2022.
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 2023.
The effect of the change is shown below:
| Gross Income | |
| $ | |
| Employment Income from ABC (1 Jan to 31 Mar 2022 – 90 days) | 18,000 |
| Employment income from DEF (1 Aug to 31 Dec 2022 – 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 payable | 4,155 |
| 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 2022 and ceased employment on 25 Feb 2022. His employment income from ABC is not taxable as his period of employment in Singapore was not more than 60 days in 2022.
However, as he subsequently commenced employment with DEF Pte Ltd on 1 Jul 2022, 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 2022 would be subject to tax.
| Gross Income | |
| $ | |
| Employment Income from ABC (1 Jan to 25 Feb 2022 – 56 days) | 18,000 |
| Employment income from DEF (1 Jul to 31 Dec 2022 – 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 payable | 4,155 |
| Less: Tax paid when he ceased employment with ABC | Nil |
| Additional tax payable to be paid by Mr Lee | 4,155 |
Other matters
- GIRO payment
Mr Lee was previously paying his income tax in GIRO instalments while employed by ABC. When he ceases employment with ABC, the GIRO instalment plan will be terminated once IRAS processes his tax clearance. If he will be re-employed immediately in Singapore by another Singapore employer and wishes to continue paying his tax in GIRO instalments, he can send an email to IRAS once he has the following documents:- A copy of his new work pass/the in-principle approval letter from the Ministry of Manpower; and
- A signed copy of his employment contract with his new employer/a confirmation letter from his new employer, that indicates his employment commencement date with them.
- 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.