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For sole-proprietors/self-employed (freelancers, commission agents, taxi drivers,hawkers...)

How do I calculate my business income?

You can calculate your taxable business income by using the following formula:

Revenue XX
Less: Cost of Goods Sold     (XX)
Gross Profit XX
Less: Allowable Business Deduction (XX)
Adjusted Profit/(Loss) XX

           

Revenue

This is the total receipts of our business which may be:

  • sales proceeds from goods sold
  • payments or fees received for services provided
  • bills paid or unpaid sent to customers
  • the selling price of goods or materials used - but not for business purposes (for example, goods are taken from your stock fo your own use, or for family or friends)

Revenue excludes Jobs Credit payout as the Jobs Credit payout is not taxable.

Gross Profit / Loss

Gross profit is the revenue figure less the cost of goods sold. If you have a service business, your gross profit will be the same as your revenue.

Allowable Business Deductions

These are expenses that you incur in the day-to-day running of your business. You may claim for business-related expenses incurred solely for the generation of your business income. Personal, private and capital expenses are not deductible expenses.

Adjusted Profit / Loss

This is the amount arrived at after deducting allowable business expenses from gross profit / loss.

How will my business income be taxed?

Business income from your sole-proprietorship business is taxable in your own name.

During tax filing period, you have to report the business income in your individual tax return. The adjusted profit from your business will be added to your other personal income and the total income, less your personal reliefs and rebates, will be taxed at individual income tax rates.

How do I report my income in the Income Tax Return?

If you are a sole-proprietor or self-employed person, how much detail you report will depend on your business revenue.

Depending on whether your annual revenue is more than or less than $100,000, you have to either report a 4-line statement or a 2-line statement in your income tax return.

Please refer to the table below.  

What you have to do Revenue not more than $100,000 Revenue more than $100,000 but less than $500,000 Revenue $500,000 or more
Prepare statement of accounts and keep proper records of your business transactions

Yes

Yes

Yes

Report 2-line statement:

  • Revenue
  • Adjusted Profit/Loss

Yes

 

 

Report 4-line statement:

  • Revenue
  • Gross Profit/Loss
  • Allowable Business Expenses
  • Adjusted Profit/Loss

 

Yes

Yes

Submit certified statement of accounts and Computation of Adjusted profit/Loss  (37KB) together with your Income Tax Return

 

 

Yes


Please note that:

  • If the total taxable revenue of all your sole-proprietorship businesses exceeded $1 million in the last 12 months, or is expected to exceed $1 million in the next 12 months, you should register yourself for GST.
  • Statement of Accounts' comprises:
  • Trading and Profit and Loss Account; and
  • Balance Sheet
  • If you e-file your Income Tax Return, please send in your statement of accounts either:
  • by post to Inland Revenue Authority of Singapore, 55 Newton Road, Singapore 307987, or
  • by fax to 6351 4358

 

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Last Updated on 9 December 2014


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