Wednesday, October 3, 2012

Income group breakdown for year of assessment 2011

The financial report for IRAS was released some time last week. One of the more interesting statistics to me was the breakdown of the various income groups..


A few things to note on the statistics above.
1) It seems that residents from Singapore are earning much more than we think. For example, there are more than 100k of tax residents earning between the $100k to $150k bracket. Each of them have an average assessable income of $121k. They pay an average of $5371 in taxes.

2) The highest band of more than a million in assessable income consists of 3870 individuals. Each of them have an average assessable income of  $1.925M. They pay an average of $356k in taxes.

3) Most tax payers actually fall under the $30k to $40k bracket. These tax payers have an average of $34847 of assessable income. They pay an average of $214 in taxes.

Other thoughts
So which band are you currently in? How far are you in moving on to the next band? How many tax payers are ahead of you in terms of income? We can ask ourselves so many questions when looking at the statistics above.

Another thing to note is that the richer folks probably earn more as they are able to invest more. At the very least, capital gains and dividends are not taxable in Singapore. Such "passive income" will not be reflected in the table above. The cost of living has grown so high that we can hardly just rely on our active source of income. We need to relook at our own portfolios and assess how we can make our money work harder.

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