Thursday, 26 February 2015

Budget - Tax Changes - Beyond $160,000

If you earn less then $160,000 a year, your income tax rates aren't affected.

Here is the summary of increases for you high earning Whales.

Source: ChannelNews Asia, via Facebook
How much more will you need to pay? Work it out yourself, you five-percenters!

Or get your accountants to do it.

Or if you like, you can move to HK...

HK Tax Rate

Year of Assessment 2008/09 to 2015/16*

Net chargeable IncomeRateTax
On the First40,0002%800
On the Next40,0007%2,800
On the Next40,00012%4,800

Tax Reduction
Year of Assessment
% of Tax Reduction
Maximum Per Case ($)
Applicable Tax Types
salaries tax and tax under personal assessment
2009/10 & 2010/11
salaries tax and tax under personal assessment
salaries tax, profits tax and tax under personal assessment
2012/13 & 2013/14
salaries tax, profits tax and tax under personal assessment
salaries tax, profits tax and tax under personal assessment
 *     Legislative amendments are required for implementing the tax measures as proposed by the Financial Secretary in the 2015-16 Budget.

Standard Rate
Year of AssessmentTax Rate
2008/09 onwards*15%


Singapore doesn't tax the first $20,000 of chargeable income tax. HK taxes from the first dollar at 2%. For the first HK$40,000. Or $800.

SG taxes 2% for the $10k after the first $20k, and 3.5% for the next $10k, So the tax on the first S$40k is $550.

HK taxes the next HK$40k at 7% or $2800. SG is the same, but because of the initial lower rates, at $80k, the HK resident pays HK$3600, whereas the SG resident would pay S$3350.

For the next $40k, HK tax is 12%. SG is 11.5%. For $120k, HK tax is HK$8400, SG tax is S$7950.

After that HK charges a flat 17% for income over HK$120k.  But HK$120k is only about S$21k. Which means that while their topline tax rate is lower than SG, they tax EVERYONE, and from the very lowest base, from the first HK$40k. which is about S$7,000. That's $7k annually.

One report from 2013 has the HK median family income at $22,000. Assuming a two income family, that means practically half the tax residents will hit the 17% income tax rate.

In SG only the top 5 - 10% will actually hit 17% tax rate.

Things to think about before I move to HK.

[Note to self: Cancel Cantonese lessons!]

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