More and more Singaporeans are earning money outside their main employment. Whether it is freelancing on weekends, driving for a ride-hailing platform, selling products online, tutoring students, earning rental income, or receiving investment dividends, side income is increasingly common. The question many people have is: do I need to declare this to IRAS? The short answer is yes — almost all income earned in Singapore is taxable, and failing to declare it can result in penalties. This guide explains what counts as taxable side income, how to declare it, and what deductions you can claim.
What Counts as Taxable Side Income?
Singapore taxes all income that arises in or is derived from Singapore, subject to certain exemptions. For side income, the main categories include:
- Freelance and gig economy income: Money earned from freelance work, consulting, tutoring, content creation, graphic design, web development, or any service provided outside your main employment.
- Platform income: Earnings from ride-hailing (Grab, Gojek), food delivery (GrabFood, Foodpanda, Deliveroo), selling on Carousell, Shopee, Lazada, or other marketplaces.
- Rental income: Income from renting out property or a room, including through platforms like Airbnb (subject to HDB and URA regulations).
- Business income: Profits from any side business or sole proprietorship.
- Director fees: Fees received for serving as a director of a company.
- Commission and referral income: Payments for referring customers, affiliate marketing, or earning commissions.
Notably, certain types of income are not taxable in Singapore. Capital gains from the sale of shares or property (unless you are trading in shares or property as a business) are generally not taxable. Dividends from Singapore-resident companies are tax-exempt due to the one-tier corporate tax system. Interest from approved bank accounts and government securities is also exempt for individuals. Winnings from lotteries and betting are not taxable.
Do I Need to File if My Side Income Is Small?
There is no minimum threshold below which side income is automatically exempt. Unlike the UK (which has a £1,000 trading allowance), Singapore does not have a blanket de minimis exemption for side income. If you earn any amount of taxable side income, you are technically required to declare it.
In practice, if your total annual income (including employment and side income) is below S$22,000, you may not need to file a tax return. IRAS generally does not require individuals with annual income below S$22,000 to file, provided they have no other conditions that trigger a filing obligation (such as being a sole proprietor). However, if IRAS sends you a filing notification, you must file regardless of your income level.
For employees under the No-Filing Service (NFS), your employment income is automatically reported by your employer. But NFS does not cover side income. If you have side income that is not reported through NFS, you must file a tax return to declare it — even if you would otherwise qualify for NFS.
How to Declare Side Income
Side income is declared in your annual tax return through myTax Portal. The specific section depends on the type of income:
- Trade, business, profession or vocation: If your side income is from freelancing, a side business, or self-employment, declare it under "Trade, Business, Profession or Vocation" using the two-line statement (revenue and expenses) if your annual revenue is S$500,000 or less.
- Rental income: Declare under "Rent from Property" with details of the property, gross rent, and allowable expenses.
- Other income: Director fees, commission income, and other miscellaneous income go under "Other Income."
If you earn income from multiple side activities, you need to declare each one separately under the appropriate category. Keep track of income and expenses for each activity throughout the year so that filing is straightforward.
What Expenses Can You Deduct?
If your side income is from a trade or business, you can deduct expenses that are wholly and exclusively incurred in earning that income. This is one of the key advantages of properly declaring your side income — the deductions can significantly reduce your tax liability.
Common deductible expenses for side businesses include:
- Cost of goods sold (materials, inventory, packaging)
- Platform fees and commissions (Grab's service fee, Shopee's commission)
- Transport costs directly related to the business (petrol, parking, ERP for delivery drivers)
- Equipment and tools (camera for content creation, cooking equipment for a home bakery)
- Software subscriptions (accounting software, design tools, website hosting)
- Marketing and advertising costs
- Home office expenses (proportionate share of rent, utilities, internet)
- Professional development (courses related to the side business)
Keep receipts and records of all expenses. IRAS may request supporting documentation during a review, and claims without evidence will be disallowed.
MediSave Obligations
If your net trade income from self-employment activities exceeds S$6,000 per year, you are required to make MediSave contributions. This applies even if you are also an employee making CPF contributions through your day job. Your MediSave obligation as a self-employed person is calculated separately based on your net trade income.
However, there is an important interaction. If your total CPF contributions from employment already reach the CPF Annual Limit, your additional MediSave obligation from self-employment may be reduced or eliminated. The CPF Board coordinates this to ensure you do not over-contribute.
Platform Economy and Tax Compliance
IRAS has been paying increasing attention to the platform economy. Since 2022, major platforms operating in Singapore have been required to submit information about their sellers and service providers to IRAS. This means that if you earn income through Grab, Shopee, Carousell, or similar platforms, IRAS likely already knows about your earnings. Failing to declare this income is risky and increasingly easy for IRAS to detect.
For ride-hailing and delivery drivers, the platform typically provides an annual income summary that shows your total earnings and any fees deducted. This summary is a useful starting point for your tax declaration, but you should also track additional deductible expenses such as petrol, vehicle maintenance, and mobile phone costs that are not captured in the platform's summary.
What Happens If You Do Not Declare Side Income?
IRAS takes non-declaration of income seriously. If IRAS discovers undeclared income — through data matching with platforms, bank records, or third-party information — the consequences can include:
- A penalty of up to 200 per cent of the tax undercharged (though IRAS typically imposes lower penalties for voluntary disclosure)
- Interest on late payment of tax
- Criminal prosecution in serious cases of wilful tax evasion (with fines of up to S$50,000 and imprisonment of up to three years)
If you have failed to declare side income in previous years, IRAS operates a Voluntary Disclosure Programme that allows you to come forward with reduced penalties. It is always better to declare voluntarily than to be caught.
Practical Tips for Managing Side Income Tax
First, keep a separate bank account for your side income. This makes it much easier to track revenue and expenses. Second, set aside 15 to 20 per cent of your net side income for tax, so you are not caught short when the tax bill arrives. Third, track expenses throughout the year using a simple spreadsheet or accounting app — trying to reconstruct expenses at filing time is stressful and inaccurate. Fourth, consider whether your side activity has grown large enough to warrant registering a sole proprietorship or company, which may provide additional structuring options.
Final Thoughts
Side income is taxable in Singapore, and IRAS has increasingly sophisticated tools to detect undeclared earnings. The good news is that the filing process is straightforward, and the ability to deduct business expenses means you are only taxed on your net profit. Declare your income honestly, keep good records, and claim all legitimate deductions. Use our Singapore income calculator to see how your side income affects your overall tax position and plan accordingly.