Sunday, May 13, 2012

Taxable income by income group 2010

The e-filing for individual income taxes has ended some time back. Once IRAS processes the submission, we should be receiving the notices for the payment. In the mean while, one can use the calculator on the IRAS website to estimate the taxes they need to pay:

Some people may also be interested on where they stand in terms of income compared to other tax payers. The breakdown for the assessable income for 2010 is as follows: 

where you can enter your assessable income to see where you stand against other tax payers. Do note that the calculator do not include annual incomes that are lesser than 20k as they are not taxable.

Other thoughts:
It is interesting to see how many taxpayers there are in the different income levels. We can also see how 12.5k individuals can earn more than 500,000 in a year. Do note that this is from employment income alone! These people definitely have passive income coming in from investments. The capital gains and dividends do not attract taxes nor CPF contributions. No wonder the rich always get richer!

From the table above, we can also see how the high income earners pay much more taxes than the lower income earners. This is due to the progressive income tax rate system in Singapore. For every dollar earned above the 320,000 mark, one will need to pay $0.20 in taxes (20%). Compared to first taxable band od 20k to 30k, the tax rate is only 2%. This tax system further affirms my conviction to eventually achieve a high stream of passive income from dividend investing that can "replace" my active income. The passive income  is not taxable on our end!

1 comment:

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