Section 19/19A capital allowances on plant and machinery.
Take Home
$94,588.90
Income Tax
$5,551.10
Eff. Rate
5.3%
MediSave
$4,860.00
How sole proprietorships are taxed
A sole proprietorship is not a separate legal entity. Business profits are taxed as personal income at progressive rates from 0% to 22%. You must file Form B and declare all business income. Capital allowances under Sections 19 and 19A can be claimed for plant and machinery.
Compulsory MediSave
As a sole proprietor, you must make compulsory MediSave contributions based on your net trade income. This is separate from voluntary CPF contributions. The contribution rates are age-dependent and range from 4% to 10.5% of net trade income.
IRAS-Aligned: Uses YA 2025 rates. Consult a tax professional for complex situations.
How sole proprietors pay tax, what you can deduct, and how IRAS treats your business income
How is a sole proprietorship taxed in Singapore?
A sole proprietorship is not taxed separately — all business profits are treated as your personal income and taxed at progressive rates from 0% to 24%. If your business earns S$100,000 profit, it is added to any other income you have and taxed together. There is no corporate tax rate for sole proprietors; you file personal income tax (Form B) with IRAS.
How do you register a sole proprietorship?
Register with ACRA (Accounting and Corporate Regulatory Authority) online via BizFile+. It costs S$100 for one year or S$160 for three years. You need to choose a business name, provide your personal details, and describe your business activity. Registration takes about 15 minutes if the name is approved instantly. You receive a UEN (Unique Entity Number) for business use.
What expenses can a sole proprietor deduct?
You can deduct any expense that is wholly and exclusively for earning your business income. Common deductions: rent, utilities, equipment, stock purchases, marketing, insurance, professional fees, transport, and staff wages. If you work from home, claim a reasonable portion of rent and utilities. Keep receipts for at least five years — IRAS can ask for proof at any time.
Does a sole proprietor need to pay CPF?
You must contribute to MediSave if your net trade income exceeds S$6,000 per year. The rate is 8% to 10.5% depending on your age and income. You can also make voluntary CPF contributions to the Ordinary and Special Accounts for housing and retirement benefits. Voluntary contributions are tax-deductible. Unlike employees, there is no employer share — you pay everything yourself.
When does a sole proprietor need to register for GST?
You must register for GST if your taxable turnover exceeds S$1 million in any 12-month period. Below that threshold, registration is voluntary. Once registered, you charge 9% GST on your sales and file quarterly returns. You can also claim back GST on business purchases. Most small sole proprietors are below the threshold and do not need to register.
How do you file taxes as a sole proprietor?
File Form B with IRAS by 15 April (paper) or 18 April (e-filing). If your revenue is under S$200,000, use the simplified two-line statement (revenue and adjusted profit only). Above S$200,000, use the four-line statement with more detail. IRAS will send a Notice of Assessment with your tax bill, usually within a few months. Pay via GIRO to spread the cost.
What are the disadvantages of a sole proprietorship compared to a company?
The main downside is unlimited personal liability — if your business cannot pay its debts, creditors can come after your personal assets. You also miss out on the corporate tax rate (17% with partial exemptions for new companies). Sole proprietors cannot retain profits in the business at a lower rate. However, sole proprietorships are simpler and cheaper to run — no annual returns, audits, or company secretary required.
IRAS-Aligned: Based on 2025 IRAS rates and thresholds. For personal advice, speak to a qualified tax professional.
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Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms