Freight, customs duties, packaging, etc.
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Cost of Goods Sold
$105,000.00
Gross Profit
$95,000.00
Gross Margin
47.5%
Inv. Turnover
4.7x
Key COGS concepts for Singapore businesses
What is COGS?
Cost of Goods Sold (COGS) represents the direct costs attributable to the production of goods sold by a business. The formula is: Opening Inventory + Purchases + Direct Costs - Closing Inventory = COGS. For Singapore businesses, COGS is deductible from revenue to determine gross profit for tax purposes.
What to include in COGS
COGS includes: raw materials and components, direct labour costs (factory/production workers), freight and shipping for inventory, customs duties on imported goods, packaging materials, and factory overheads directly tied to production. It excludes: marketing, administrative salaries, office rent, and selling expenses.
Inventory valuation methods
Singapore follows the Singapore Financial Reporting Standards (SFRS), which allow FIFO (First-In, First-Out) and weighted average cost methods. LIFO is not permitted under SFRS. The method chosen affects COGS and consequently your taxable profit. Consistency in inventory valuation is required by IRAS.
Note: COGS figures directly impact your corporate tax liability. Ensure your inventory records comply with IRAS requirements. For businesses with complex inventory, consult a qualified accountant.
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Disclaimer: This calculator provides estimates based on current IRAS (Inland Revenue Authority of Singapore) rates and thresholds for Year of Assessment 2026. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms