The only certainty in life aside from death

More on Singapore personal income tax rate in 2011 and 2012 (you can see at the raw datasets to find out how much you need to pay this year and next year — of course, this is unofficial and purely based on the tax rate given in IRAS):

The actual tax rate does not differ much once your chargeable income exceeds $320,000 per annum. It also does not really matter since by then you have been so rich until you can’t even see your sole if you look below.

(Chargeable income is broadly defined by your total income minus CPF, donations, etc.)

*

Eventually, the actual tax rate will saturate at 20%.

*

This is why I said that the Singapore income tax rate is super low. For the most of us whose chargeable income lies south of $50,000, our actual income tax rate is less than 3.5% for 2011 and 2.5% for 2012.

*

This is the amount of money that you need to pay for your income tax (before 2011 20% tax rebate).

*

The amount of tax cut decreases after $120,000 and eventually saturates at $350.

*

So, blessed are those whose chargeable income is $120,000 (estimated total income including CPF: $172,500), for they will receive the largest tax cut nominally.

*

Although, of course, percentage-wise, those who are in the lowest strata receive the highest percentage of tax cuts. Fair enough.

*

The percentage of tax cuts will start to saturate at around $320,000.

*

The maximum percentage of tax cuts is 43%, which is received by those whose chargeable income lies between $20,000 and $30,000. It does not make any sense to speak of tax cuts for those whose income is less than $20,000, by the way, since they are tax-free.

*

After this year’s 20% tax rebate, this is how the payable tax graph will look like. For those whose chargeable income is less than $110,000, the amount of this year’s rebate is less than the amount of next year’s tax cut. It is the other way around for those whose chargeable income is more than $110,000, as the amount of tax rebate is capped at $2,000. That is, they need to pay more next year if compared to this year.

The 2011 payable tax after rebate is also remarkably similar with the 2012 payable tax. Thus, the point of this year’s tax rebate is to achieve a similar effect with next year’s tax cut without actually reducing the tax rate (as it will be too late to do so).

*

So, how much do you need to pay this year? Well, this must be the most important graph in this post! Again, this is for the most of us whose chargeable income is less than $50,000 per annum.

For those who want to know how much they need to pay this year and next year: Income Tax 2011-12.

2 thoughts on “The only certainty in life aside from death

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s