By MoneyBees
Work out the income tax on gains from employee share options and share awards in Singapore. IRAS taxes the gain as employment income when you exercise or the shares vest, at your top rate, and taxes non-citizens on leaving.
on the exercise date
The exercise price. 0 for a free award.
Salary and bonus less your reliefs.
Taxable gain
$50,000
2,000 x (S$30 - S$5)
Extra income tax
$6,800
13.6% of the gain
You keep
$43,200
top rate 15%
IRAS counts the $50,000 gain as employment income for the year it arises. Added to $100,000 of chargeable income, your tax goes from $5,650 to $12,450.
If your plan stops you selling the shares for a time, the gain is taxed when that restriction ends, at the market price on that date.
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| Plan | Taxed when | Gain is market price on that date less |
|---|---|---|
| Share options (ESOP) | You exercise | The exercise price |
| Share awards with vesting | The shares vest | Any price paid |
| Share awards, no vesting | The shares are granted | Any price paid |
| Any plan with a selling restriction | The restriction ends | Any price paid |
| Non-citizen leaving Singapore | Tax clearance (deemed exercise) | Any price paid, valued a month before the job ends |
Under the Qualified EEBR Scheme you can defer the tax on these gains for up to 5 years, with interest at the 3-month compounded SORA plus 1.5 points. IRAS gives 2.6% for Apr 2026 to Mar 2027. Your employer must certify the form, and you file it by 18 Apr of the year of assessment.
Deferring $6,800 for 5 years at 2.6% simple interest costs about $884.
IRAS's own example: Mr Lim exercises 100 options at S$5 when the shares trade at S$10. His taxable gain is (S$10 - S$5) x 100 = S$500.
Larger: 2,000 options at S$5 on shares at S$30 give a S$50,000 gain. On S$100,000 of other chargeable income, tax rises from S$5,650 to S$12,450, so the gain costs S$6,800 in tax.
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.
These calculators provide general estimates for educational purposes only and are not personalised financial advice. Results may rely on rates and rules that change over time, so verify against official sources (IRAS, CPF Board, HDB, MAS) or consult a licensed financial adviser before making decisions.
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