By MoneyBees
Work out the income tax on gains from employee share options and share awards: the taxable gain on exercise or vesting, the extra tax at your top rate, deemed exercise for non-citizens leaving, and QEEBR deferral.
Yes. IRAS taxes gains from employee share options and other share plans as employment income. For options, the gain is usually taxed when you exercise them. For share awards with a vesting period, it is taxed when the shares vest.
The open market price of the shares on the taxable date, less any price you paid, times the number of shares. IRAS's example: 100 options exercised at S$5 on shares worth S$10 give a S$500 gain.
Your resident income tax rates, from 0% up to 24%. The gain is added to your other income for the year, so it is taxed at your top rates. This calculator shows the extra tax it causes.
The rule is the same: market price less what you paid. Awards with a vesting period are taxed when they vest, and awards with no vesting period when they are granted. You usually pay nothing for an award, so the whole market value is the gain.
For an employee who is not a Singapore Citizen and stops working in Singapore, IRAS treats unexercised options and unvested shares as if the gains arose, valued one month before the job ends. The tax is settled at tax clearance. An approved employer can use the Tracking Option instead.
IRAS taxes the gain from the plan as employment income. If the plan stops you selling the shares for a period, the gain is taxed when that restriction ends, based on the market price on that date.
Under the Qualified EEBR Scheme you can defer the tax for up to 5 years with an interest charge at the 3-month compounded SORA plus 1.5 percentage points. Your employer must certify the application, filed by 18 Apr of the year of assessment.
No. The Equity Remuneration Incentive Schemes do not apply after Year of Assessment 2024, and qualifying gains had to arise by 31 Dec 2023.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).