Self-employed persons (SEPs) in Singapore are responsible for managing their own income tax filing and Central Provident Fund (CPF) contributions. Unlike employees, SEPs do not receive employer CPF contributions and must compute and declare their trade income independently.
The Inland Revenue Authority of Singapore (IRAS) defines a self-employed person as an individual who carries on a trade, business, profession or vocation and earns income under a contract for service. This includes sole proprietors and individual partners in partnerships. The classification depends on the nature of the working relationship and income source, not job title.
This guide explains the income tax obligations and CPF contribution requirements that apply to self-employed persons in Singapore, based strictly on current IRAS and CPF regulations.
Key takeaways
- A self-employed person earns income from a trade, business, profession or vocation under a contract for service.
- You must file income tax if your net trade income exceeds S$6,000 or your total income exceeds S$22,000.
- Net trade income equals revenue minus allowable business expenses.
- Self-employed persons must maintain proper records for at least five years.
- MediSave contributions are compulsory if net trade income exceeds S$6,000.
- CPF Ordinary and Special Account contributions are voluntary for self-employed persons.
Who is legally considered a self-employed person in Singapore?
IRAS considers you a self-employed person if you:
- Carry on a trade, business, profession or vocation; and
- Earn income under a contract for service rather than a contract of service (employment).
Under a contract for service, you operate independently and are responsible for your own business risks, expenses and profits. Examples include sole proprietors, partners in partnerships, commission-based agents and independent professionals.
The legal distinction between employee and self-employed status determines both tax reporting obligations and CPF contribution requirements.
Common examples of self-employed persons
Under IRAS guidelines, the following individuals are generally regarded as self-employed:
- Commission agents (e.g. insurance agents, property agents)
- Direct sellers
- Independent service providers (e.g. delivery riders, consultants, bookkeepers, graphic designers, private tutors, social media influencers, sportspersons)
- Hawkers
- Taxi and private-hire drivers
- Owners of businesses that buy and sell goods or services
- Owners of online businesses
- Owners of home-based food and beverage businesses
- Professionals operating their own practice (e.g. accountants, architects, doctors, lawyers)
These individuals operate under contracts for service and are in a position to realise business profits or losses.
What if you have multiple jobs?
IRAS requires you to assess each job or engagement separately.
You may be an employee for one role and self-employed for another role.
The classification depends on whether each engagement operates under a contract of service or a contract for service.
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Income tax filing procedure for self-employed persons
Income tax for SEPs is based on net trade income. The filing process follows a structured sequence defined by IRAS.
Step 1: Determine your filing obligation
You must file an Income Tax Return if:
- Your net trade income exceeds S$6,000, or
- Your total annual income exceeds S$22,000
IRAS will issue a filing notification if you are required to file.
Step 2: Understand the filing period and deadlines
Your accounting period is the financial period for which you compute business profits. The income earned in that period is taxed in the following Year of Assessment (YA).
The YA refers to the year in which income is assessed to tax.
Example 1: Accounting period ending on 31 December
If your business starts on 1 April 2021 and you choose to end your accounting period on 31 December each year, the assessment timeline is as follows:
- 1 Apr 2021 to 31 Dec 2021 is assessed in YA 2022.
- 1 Jan 2022 to 31 Dec 2022 is assessed in YA 2023.
- 1 Jan 2023 to 31 Dec 2023 is assessed in YA 2024.
- 1 Jan 2024 to 31 Dec 2024 is assessed in YA 2025.
Example 2: Accounting period ending other than 31 December
If your business starts on 1 April 2020 and you choose to end your accounting period on 31 March each year, the assessment timeline is:
- 1 Apr 2020 to 31 Mar 2021 is assessed in YA 2022.
- 1 Apr 2021 to 31 Mar 2022 is assessed in YA 2023.
- 1 Apr 2022 to 31 Mar 2023 is assessed in YA 2024.
- 1 Apr 2023 to 31 Mar 2024 is assessed in YA 2025.
The basis period for a YA is the accounting year that ends in the preceding calendar year. Understanding this relationship ensures that you declare income in the correct Year of Assessment.
Step 3: Compute your net trade income
Net trade income is calculated as:
Revenue – Allowable Business Expenses = Adjusted Profit
Allowable business expenses must be wholly and exclusively incurred in producing income.
You must ensure your computation is accurate because this figure determines both:
- Your income tax liability; and
- Your MediSave contribution requirement
Step 4: Prepare your statement of accounts
Your statement format depends on your annual revenue.
If revenue is S$200,000 or less (2-line statement)
You must declare:
- Revenue
- Adjusted Profit or Loss
If revenue exceeds S$200,000 (4-line statement)
You must declare:
- Revenue
- Gross Profit or Loss
- Allowable Business Expenses
- Adjusted Profit or Loss
The adjusted profit is the taxable trade income reported to IRAS.
Step 5: Log in to IRAS myTax portal
You must file electronically via IRAS myTax Portal using Singpass.
During filing, you will:
- Select the Income Tax Return for Individuals (Form B or B1, as applicable).
- Declare your trade income under the self-employment section.
- Enter your revenue and adjusted profit figures.
- Declare any other sources of income (if applicable).
- Submit your return before the filing deadline stated by IRAS.
IRAS will subsequently issue a Notice of Assessment (NOA) stating your tax payable.
Step 6: Pay your income tax
After receiving the Notice of Assessment:
- Review the assessed income and tax amount.
- Pay by the due date stated in the NOA.
Payment methods are provided by IRAS and may include GIRO and electronic payment channels.
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CPF contribution procedure for self-employed persons
CPF contribution rules differ from income tax rules.
Step 1: Determine if MediSave contribution is required
MediSave contributions are compulsory if your net trade income exceeds S$6,000 per year.
CPF calculates the required contribution based on:
- Your age; and
- Your net trade income declared to IRAS.
Net trade income reported to IRAS is shared with CPF for contribution computation.
Step 2: Receive notice of MediSave payable
After IRAS finalises your tax assessment, CPF will inform you of your MediSave payable amount.
The payable amount is based on the prescribed contribution rates for self-employed persons.
Step 3: Make your MediSave contribution
You must pay your MediSave contribution by the deadline stated in CPF’s notification.
Payment methods available through CPF include:
- eNETS
- GIRO
- Internet banking
- DBS PayLah!
- AXS stations
You may apply for GIRO instalment payments if eligible. Instalment arrangements must be approved by CPF.
Step 4: Consider voluntary CPF contributions
Contributions to the CPF Ordinary Account (OA) and Special Account (SA) are voluntary for self-employed persons.
If you choose to make voluntary contributions:
- Log in to the CPF website using Singpass.
- Select the contribution option for self-employed persons.
- Make payment through the approved CPF channels.
Voluntary contributions may qualify for tax relief, subject to statutory limits.
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Relationship between income tax and CPF contributions
Net trade income links both regulatory systems:
- IRAS uses it to assess income tax.
- CPF uses it to compute compulsory MediSave contributions.
Accurate income reporting ensures correct tax assessment and correct MediSave computation. Under-declaration may result in penalties and outstanding CPF liabilities.
Compliance responsibilities of self-employed persons
Self-employed persons are responsible for:
- Maintaining accounting records for five years.
- Computing net trade income accurately.
- Filing income tax when required.
- Paying MediSave contributions on time.
- Ensuring compliance with both IRAS and CPF regulations.
There is no employer to manage these obligations.
Conclusion
Self-employed persons in Singapore must independently manage both income tax filing and CPF MediSave contributions. If net trade income exceeds S$6,000 or total income exceeds S$22,000, tax filing is mandatory. MediSave contributions are compulsory once net trade income exceeds S$6,000.
Understanding the procedural steps for filing and contribution ensures regulatory compliance and financial stability. Proper record-keeping, accurate reporting and timely payment remain essential responsibilities for every self-employed person.
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