By MoneyBees
Put the same business profit through a sole proprietorship and a private limited company: personal tax and MediSave against 17% corporate tax with the start-up or partial exemption, a director's salary with CPF, tax-free one-tier dividends and ACRA fees.
Before paying yourself.
Start-up exemption needs the IRAS conditions.
0 to take dividends only.
Secretary, accounts.
Sole proprietor: cash and CPF
$138,966
tax $11,004, MediSave $8,640
Pte Ltd: cash and CPF
$141,445
corporate tax $8,495
Pte Ltd leaves you more
$2,479
a year, cash and CPF together
As a sole proprietor, the $150,000 profit is your income. You pay $8,640 into MediSave and $11,004 in personal tax, plus the $30 yearly renewal, and keep $130,326 in cash.
Through a company, you take no salary, so no CPF is paid. The company is taxed on $149,940: $99,970 is exempt, and tax comes to $8,495. Paid out as one-tier dividends, the $141,445 left is not taxed again.
No Corporate Income Tax Rebate has been announced for YA2027, so none is included.
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| Sole proprietor | Pte Ltd | |
|---|---|---|
| Tax on profit | Personal rates, 0% to 24% | 17% after exemptions |
| Exemptions | Personal reliefs | First 3 YAs: 75% of first S$100,000, 50% of next S$100,000. Then 75% of first S$10,000, 50% of next S$190,000 |
| CPF | MediSave on profit above S$6,000 | Full CPF on a director's salary; none on dividends or directors' fees |
| Profit to you | All yours, already taxed | One-tier dividends, not taxed again |
| ACRA | S$100 to register, S$30 a year to renew | S$300 to incorporate, S$60 annual return |
The start-up exemption is for a company's first 3 YAs, with no more than 20 shareholders and at least one individual holding 10%. Investment holding and property development companies cannot claim it.
You are 35 and your business makes S$150,000 in 2026. As a sole proprietor you pay S$8,640 MediSave and S$11,004 tax and keep S$130,326 after the renewal fee. As a new Pte Ltd paying no salary, S$99,970 of the S$149,940 profit is exempt, tax is S$8,495, and S$141,445 goes to you as dividends. Pay yourself S$5,000 a month instead and you get S$22,200 of CPF, the company pays S$3,389 of tax, and you end with S$123,311 in cash.
A company costs more to run: a company secretary, annual accounts and an annual return. Profits kept in the company are not yours until paid out. Directors' fees are not CPF-able, but a salary is.
Figures checked 3 Oct 2026.
It depends on the profit. A sole proprietor pays personal tax at 0% to 24% on the whole profit. A company pays 17% after exemptions, and dividends to you are not taxed again. At low profits personal rates are often lower; as profit rises the company's exemptions and flat 17% tend to win. The calculator works it out for your numbers.
17% of chargeable income. A new company gets 75% of the first S$100,000 and 50% of the next S$100,000 exempt for its first 3 Years of Assessment, if it meets IRAS's conditions. After that, 75% of the first S$10,000 and 50% of the next S$190,000 are exempt.
Yes. For YA2026 the rebate is 50% of tax payable, capped at S$40,000, with S$2,000 paid as a cash grant to companies that employed at least one local employee in 2025, not counting shareholder-directors. No rebate has been announced for YA2027.
No. Dividends paid by a Singapore resident company under the one-tier system are not taxable for shareholders, because the company's tax is final.
Yes, if you are employed by the company under a contract of service and paid a salary. CPF is not payable on directors' fees voted at a general meeting, or on dividends.
A sole proprietor is self-employed and pays MediSave once net trade income is above S$6,000 a year, at 4% to 10.5% by age and income in 2026. Paying into the other CPF accounts is voluntary.
Registering a sole proprietorship costs S$100 for 1 year and renewing it S$30 a year, plus S$15 for the name. Incorporating a company costs S$300 plus S$15 for the name, and filing the annual return costs S$60.
A company incorporated and tax resident in Singapore, for its first 3 YAs, held by no more than 20 shareholders who are all individuals or include an individual holding at least 10%. Investment holding and property development companies cannot claim it.
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.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).