Many complain that Singapore is not livable but yet many finds Singapore a heaven to live. Let’s get real and square up all the facts with numbers.

Let’s assume a basic formula of

Spending power = Salary – income tax – GST

Livability = Spending power / expenses(cost of living)

Salary

All things being equal, lets compare the graduate starting salaries for all university graduates in the region. Singapore ranks second only after South Korea.

Taxes for Residents

Chargeable Income Income Tax Rate (%) Gross Tax Payable ($)
First $20,000
Next $10,000		 0
2		 0
200
First $30,000
Next $10,000		 –
3.50		 200
350
First $40,000
Next $40,000		 –
7		 550
2,800
First $80,000
Next $40,000		 –
11.5		 3,350
4,600
First $120,000
Next $40,000		 –
15		 7,950
6,000
First $160,000
Next $40,000		 –
18		 13,950
7,200
First $200,000
Next $40,000		 –
19		 21,150
7,600
First $240,000
Next $40,000		 –
19.5		 28,750
7,800
First $280,000
Next $40,000		 –
20		 36,550
8,000
First $320,000
In excess of $320,000		 –
22		 44,550

Tax Rates for Non-Residents

Taxes on Employment Income

The employment income of non-residents is taxed at flat rate of 15% or the progressive resident tax rates (see table above), whichever is a higher tax amount.

Taxes on Director’s fee, Consultation fees and All Other Income

From YA 2017, the tax rates for non-resident individuals (except certain reduced final withholding tax rates) has been raised from 20% to 22%. This is to maintain parity between the tax rates of non-resident individuals and the top marginal tax rate of resident individuals.

Type of Income Non-resident individual tax rate / withholding tax rate from YA 2017
(a) Director’s remuneration 22%

See Tax Obligations for Non-Resident Directors
(b) Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.) 15% of gross income or 22% of net income

See Taxable Income of Non-Resident Professionals

 
(c) Income derived from activity as a non-resident public entertainer (artiste, musician, sportsman, etc.) 10% concessionary rate (No change)

See Tax for Non-Resident Public Entertainers

 

 
(d) Other income e.g. property rental income 22%

See Foreigners with Property in Singapore
(e) SRS withdrawal by a non-citizen SRS member 22%

See Withholding Tax on SRS
(f) Interest, royalty etc. Reduced final withholding tax rate (subject to conditions) as follows:
Interest: 15%
Royalty: 10%OR22% if reduced final withholding tax rate is not applicable.See Withholding Tax Rates for Individuals (262KB)

Source: IRAS Singapore

This is where it gets interesting. For many of those complaining about high taxes, this is how we compare against others in the region. The chart is a little outdated we are now at 22% maximum which puts us above Myanmar but below most of our counterparts.

Source: Ernst & Young

In budget 2018, it was announced that there will be a GST hike in 2020 which will raise our tax contributions. We are not the only country in the world with GST so how do we compare against them?

Even after the raise, it still puts us in the lower 50 percentile in the region. So we earn money and we do not contribute as much as our peers in the region. Now the next obvious thing to shout about is the cost of living. Based on the table below, Singapore’s cost of living is below that of Hongkong , Japan, China and South Korea but higher than most of our counterparts.

Source: ECA international

Conclusion:

Singapore has salaries that are higher than most in the region and considerably lower taxes + gst which means they are left with quite a good amount of spending power. The spending power also goes a long way towards the necessities in Singapore as our cost of living is not exactly the highest around the region.