Cory Diary : Settled my Tax for 2019

Like in many countries, we have Income Tax, GST, Road Tax and Property Tax. Similarly for me even though I am based oversea, I can't escape them as well. The tax here (oversea) is the biggest item of my expenses. Usually I look forward to good bonus to help cover them. There are few deductions to be made before I can see my money in my bank account. There is Pension too but that is another topic.


Taxes

In the payroll, there are Income Withholding Tax, Labor Insurance Tax, Company deductions and Medical Tax.  Company deductions, Labor and Medical Tax are deducted directly through payroll. To be clear they aren't part of Income Tax. They probably constitutes about 2% of Income. The company will pay separately about 8% to the government. This works to about similar to our MediSave size. However the key difference is the money is to a common pool and will not be returned unlike Medi-Save.

The much larger component will be Income Tax. To cope with the payment, the authority will withhold some money every month and one will pay the balance after an assessment during the tax period. Yes, this is deducted from payroll as well.


Assessments

The income tax here has three routes of assessing the needed unlike Singapore where is pretty straight forward for most of us. Usually, only 2 will be used as the 3rd option is only when you have very significant earning. One of the easiest way for me is to ask for tax office personal assistant (temp worker) to follow through the form on the required. And the system will compute what is needed and I will pay the lower of the two after withholding amount that has already been deducted monthly prior year. After doing a few verification with the tax officer, I will proceed to payment using ATM setup within the tax office that allow us to withdraw over the typical limits.


Tax Rate

From table above already translated into S$, most Singaporeans income would fall within the range of 20% cascading. That's pretty high. Do note this tax excludes Medical and Pension consideration which are considered separately. If you are a Senior Manager and above, 30% - 40% cascading tax of your income is the norm here (oversea).

This is one main reason why people who earns good income like to come to Singapore. The taxes in Singapore is relatively much lower.



Cheers

Cory
2019-0518