You will be able to list which parts of your pay and benefits are taxable.
Shu Ting's bonus landed in March, along with a cash award for a project that finished early and a few hundred dollars from her company's share plan. In the same year her employer paid for her mobile phone line and gave her a transport allowance. When she opened her IRAS account the next spring, one figure sat under employment income. She had no idea which of those payments it included.
This lesson sorts out what counts as income from your job, so that you can look at that figure and know what should be inside it.
Salary is the obvious part. So are the things paid on top of it: bonuses, commissions, overtime, and the thirteenth-month payment many employers call the annual wage supplement. If you're a director of a company, your director's fees count as employment income too.
Allowances are taxable in general, whatever they are called: transport, meal, housing, phone or shift allowances paid to you in cash. A fixed monthly allowance is part of your pay, even if you think of it as covering a cost. IRAS does exempt some specific payments and reimbursements, and its website lists them, so don't assume an item is taxable or exempt from its name alone.
Lump sums count as well. A sign-on bonus, a retention bonus, a long-service award and, in many cases, payment in lieu of notice are employment income. Some payments when a job ends, such as genuine compensation for loss of employment, can be treated differently, and IRAS sets out how to tell them apart.
Not all pay arrives as money. A benefit in kind is something your employer provides that has value to you, such as a home, a car, a club membership or school fees for your children. These are generally taxable, and IRAS has rules for how each one is valued.
Housing is the usual example among people posted here by their employer. If your company rents a flat for you, the value of that accommodation, worked out under IRAS rules, is added to your employment income. A company car that you can use privately is treated in a similar way.
Some benefits are exempt or valued at little, such as medical benefits within IRAS conditions, small festive gifts, or staff discounts within limits. The details move, so check the IRAS page on employee benefits for anything you aren't sure about.
Many employers, especially multinationals, pay part of their staff in shares. You might get restricted share units that vest over three years, or options to buy shares at a set price.
The gain from these plans is generally taxed as employment income. When the gain arises, and how it is measured, depends on the type of plan and on IRAS rules. For many plans it is around the time the shares vest or you exercise an option, measured as the market value of the shares then minus anything you paid. Once you own the shares, any later rise in price when you sell is a separate question, which module 5, Declare investment, rental and side income correctly, covers.
Shu Ting's few hundred dollars from her share plan were exactly this kind of gain. Her employer included it in the figures it sent to IRAS, which was why her employment income was higher than her salary and bonus added together.
Most employers in Singapore take part in the Auto-Inclusion Scheme for employment income. They send IRAS each employee's income for the year, and IRAS pre-fills it in your return. Your employer also gives you a statement of what it reported, usually on the IR8A form, with appendices for benefits in kind and share gains where they apply.
That system catches most income. It doesn't make you blameless if something is wrong. You are responsible for the accuracy of your return, whether you typed the figures yourself or accepted what IRAS pre-filled.
Mistakes happen in a few predictable places. A job change can leave one employer's income missing, especially if a small company isn't in the scheme. Share gains from a former employer, or from a parent company overseas, may not be reported. A bonus paid in January may be reported in the wrong year. Reading the fine print: payslips, statements, policies and contracts, lesson 4.2, Check your income and reliefs before you pay, shows how to compare your IR8A with your notice of assessment line by line.
Shu Ting made a list. Salary, bonus, the project award, the share plan gain, the transport allowance and the phone line her company paid for. She added up her IR8A and its appendix, and the total matched her pre-filled employment income to the dollar.
Then she checked the phone line. Her employer paid the bill directly, and it covered a line she used mostly for work. She found the IRAS guidance on mobile phone benefits and saw how that case is treated, then wrote the answer beside it on her list. The transport allowance, paid in cash each month, was taxable, and it was already inside her total.
For the activity, start the same list from your own payslips and IR8A, then open your IRAS account to see what was pre-filled.
List every type of pay and benefit you received last year and mark which appeared in your IRAS pre-filled income.
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