Taxation for gig workers in Singapore

In Singapore, it was estimated that 9% of the workforce in 2018 were independent contractors or self-employed, with more than half of this population finding work via gig platforms [1]. 

In response to the growing gig economy, the Tripartite Standard on Contracting with Self-Employed Persons was released in March of 2018. These standards are a set of voluntary guidelines for employers to practice when contracting freelancers.

The employment practices aim to give clear terms of agreement between the platforms and the freelancers by which the employers define terms include but are not limited to the benefits that are available, payment periods and value placed on services, as well as the nature of the services [2].

Another initiative taken by the government in Singapore in 2020, is a pilot scheme called Contribute-As-You-Earn (CAYE). Through CAYE, a portion of the freelancer’s income is transferred to their MediSave accounts while they are completing government contracted work. This practice has only been deployed through the government with no plans to be adopted by the private sector [3].

Who is interested in gig work in Singapore?

The gig economy in Singapore continues to attract men and women of varying ages. The gender distribution within the country is amongst the closest to an even divide with 52% of those seeking employment identifying as males and 48% as female.

All of the working age generations within Singapore have actively sought work in the gig economy with similar trends to other nations.

The majority remain those between the ages of 25 and 34 as well as 35 and 44 at 33% and 27% respectively. While the youngest generations, 18 to 24, comprise 16% of the potential workforce and those between the ages of 45 and 54 comprise 11% of the potential workforce. Those aged 55 to 64 and the group of 65 years or older are amongst the smallest portion at 9% and 4% respectively.

Tax Filing

An employee in Singapore is defined as an individual working under a contract of service whereas a self-employed individual is defined as an individual performing work for others under a contract for service. Independent contractors’ incomes are earned from the selling of goods or services [4].

All income including tips, bonuses, or additional payments from services provided with the intention of making a profit are taxable. Those working outside of a standard employment contract are expected to file their own income taxes by mid-April. Independent contractors are also required to pay into their Medisave account which is a mandatory medical savings program for citizens and residents. Independent contractors are required to maintain proper accounting records for a period of 5 years.

An independent contractors’ need for a business license varies depending on the services in which they provide.  Gig work such as driving for a rideshare platform requires a business license or a Private Hire Car Driver’s Vocational License (PDVL) which has an application fee of S$40 and a mandatory 10 hour course. However, other freelancing services such as graphic design or software engineering do not require a specific business license [5].

It is up to individuals to maintain a record of expenses incurred that may be considered deductibles from their taxable income. Deductibles included but are not limited to expenses that are not capital expenditures, but necessary to complete work and non-personal expenses [6]. 

Progressive Tax Rates

[1] Dylan Loh. Gig economy’ workers fall on hard times in Singapore and Australia. April 8, 2020
[2] Tripartite Alliance for Fair & Progressive Employment Practices. (accessed September 7, 2020)
[3] Rachel Phua. The Singapore gig economy: Right balance on regulations needed to unlock its full potential, say experts. January 26, 2020. (accessed September 6, 2020)
[4] Inland Revenue Authority of Singapore. (accessed September 7, 2020)
[5] TransferWise. How to become a freelancer or self-employed in Singapore. October 13, 2017. (accessed September 5, 2020)
[6] Corporate Services. Personal Taxes in Singapore. (accessed September 5, 2020)