Singapore Tax Guide for Self-Employed, Freelancers & Sole Proprietors 2026

Stepping into the world of self-employment, freelancing, or starting your own sole proprietorship in Singapore offers unparalleled freedom and flexibility. Whether you are driving for a ride-hailing app, delivering food, building software, or running a boutique consultancy, you are part of a vibrant and growing gig economy. However, with this freedom comes a significant administrative burden: navigating the complexities of the Inland Revenue Authority of Singapore (IRAS) tax system.

If you operate as a freelancer, sole proprietor, partner, private-hire car driver, food delivery rider, or independent contractor in Singapore, IRAS classifies you as a Self-Employed Person (SEP). You are taxed on your Net Trade Income at the same progressive personal tax rates (0% to 24%) that apply to salaried employees. But unlike employees who have their taxes neatly pre-filled and CPF deducted automatically, you are entirely responsible for tracking your revenue, claiming allowable expenses, and filing Form B accurately.

This comprehensive 2026 guide is designed to demystify the self-employed tax landscape, transforming compliance from a source of anxiety into a manageable, routine part of your business.

1. Who is Classified as Self-Employed by IRAS?

The classification of a Self-Employed Person (SEP) in Singapore is broad. IRAS considers you self-employed if you earn income from a trade, business, profession, or vocation for your own account, rather than as an employee of a company. You bear the financial risk of your enterprise and generally provide your own equipment.

Common categories of self-employed individuals include:

• Sole Proprietors & Partners: Business owners registered with the Accounting and Corporate Regulatory Authority (ACRA).
• Freelancers & Independent Contractors: Graphic designers, software developers, copywriters, and consultants who take on project-based work.
• Gig Economy Workers: Ride-hailing drivers (Grab, Gojek, Tada) and taxi drivers.
• Delivery Riders: Food delivery riders (Foodpanda, GrabFood, Deliveroo) and logistics couriers.
• Commission-based Agents: Real estate agents, insurance brokers, and financial advisors.
• Educators & Coaches: Private tuition teachers, fitness instructors, and sports coaches running their own classes.

Even if you hold a full-time salaried job but run a side hustle (e.g., selling baked goods online or doing weekend photography), the income from your side hustle is considered self-employed trade income and must be declared to IRAS.

2. Calculating Net Trade Income (NTI)

As a self-employed individual, you do not pay tax on every single dollar you collect from your clients. Instead, you pay tax on your Net Trade Income (NTI). This is a crucial concept to grasp because accurately calculating your NTI ensures you do not overpay your taxes.

The formula for computing Net Trade Income is straightforward:

• Gross Business Revenue: The total sum of all invoices paid, cash received, and payments transferred to you for your services or products throughout the calendar year (January 1 to December 31).
• Allowable Business Expenses: The day-to-day running costs incurred wholly and exclusively for the purpose of producing your business income.
• Capital Allowances: Deductions you can claim for the wear and tear of fixed assets bought for business use, such as laptops, office furniture, or machinery.

3. Allowable vs. Non-Allowable Expenses

One of the most common areas of confusion and anxiety for self-employed individuals is determining which expenses can be legally deducted to lower tax liability. Overclaiming can trigger audits and penalties, while underclaiming means leaving money on the table.

Examples of Allowable Expenses

• Operating Costs: Office rent, co-working space fees, and utilities (if operating from a separate office).
• Digital & Software: Web hosting, domain renewals, accounting software subscriptions (e.g., Xero, QuickBooks), design tools (Adobe Creative Cloud), and business broadband.
• Marketing & Advertising: Social media ad spend, SEO services, printing of name cards, and business networking events.
• Transport Costs: Public transport, taxi fares, or private hire rides incurred strictly for business purposes (e.g., travelling from your office to a client's site). Note: Travel from your home to your primary place of business is considered private commuting and is not allowable.
• Home Office Apportionment: If you work from home, you can claim a portion of your home utilities and internet bills. The apportionment must be reasonable (e.g., based on the floor area used for business or the number of hours worked).

Examples of Non-Allowable Expenses

IRAS strictly forbids claiming expenses that are personal in nature or not directly related to revenue generation:

• Personal meals or entertainment (unless it is explicitly business entertainment for clients, which has strict rules).
• Traffic fines, parking fines, or penalties.
• Medical expenses for yourself as a sole proprietor (only employee medical expenses might be deductible under certain caps).
• Income tax payments.
• Private transport costs (e.g., buying a personal car, road tax, or petrol for personal use).

4. Fixed Deemed Expense Ratios (Drivers & Agents)

Tracking every single receipt for petrol, ERP, car washing, and maintenance can be incredibly tedious. To reduce the record-keeping burden for certain self-employed vocations, IRAS offers a simplified scheme using prescribed Deemed Expense Ratios.

Under this scheme, you do not need to compile and tally up your actual expenses. Instead, you claim a fixed percentage of your gross income as a business expense.

For Drivers: If you earned S$50,000 in gross driving fares, you can automatically claim S$30,000 (60%) as deemed expenses. Your taxable Net Trade Income would be only S$20,000. This 60% covers all driving-related expenses including fuel, rental, insurance, and road tax. You cannot claim any other actual expenses on top of this 60%.

For Commission Agents: The 25% deemed expense is only applicable if your gross commission income is S$50,000 or less. If your commission exceeds S$50,000, you must claim your actual business expenses based on actual receipts.

5. Form B e-Filing Process & Record Keeping

As a self-employed individual, you must file your income tax return via Form B (or Form B1 for those with mixed income types) on the myTax Portal. The e-filing window typically opens in early March, and the mandatory deadline is April 18 every year.

During filing, you will be required to declare your business income using a Statement of Accounts:

• 2-Line Statement: If your business revenue is S$200,000 or less, you can file a simplified 2-line statement detailing only your Gross Revenue and Adjusted Profit/Loss.
• 4-Line Statement: If your revenue exceeds S$200,000, you must provide a 4-line statement detailing Revenue, Gross Profit, Allowable Business Expenses, and Adjusted Profit.

The 5-Year Record Keeping Rule

IRAS takes record-keeping seriously. You are legally required to retain all business records, bank statements, invoices, and expense receipts for a period of 5 years from the relevant Year of Assessment. You do not need to submit these documents when you file your tax return, but you must be able to produce them immediately if IRAS selects you for a random audit or review. Maintaining a digital archive (scanning receipts or using apps like Receipt Bank) is highly recommended.

6. Tax Reliefs & Handling Business Losses

Unlike employees who get automatic CPF tax relief, self-employed persons must actively plan their tax reliefs to lower their chargeable income. Consider these two powerful strategies:

• Voluntary CPF Contributions: You can make voluntary contributions to your CPF Ordinary, Special, and MediSave accounts to build your retirement nest egg. These contributions are tax-deductible up to the prevailing CPF Annual Limit (S$37,740).
• Supplementary Retirement Scheme (SRS): Contributing to an SRS account provides dollar-for-dollar tax relief up to S$15,300 per year for Singaporeans/PRs (or S$35,700 for foreigners). The funds can be invested and are only taxed at 50% upon withdrawal at retirement age.

Handling Business Losses

Not every year is profitable. If your allowable business expenses and capital allowances exceed your gross revenue, you will incur an Adjusted Trade Loss. The good news is that IRAS allows you to offset this loss against your other sources of income (such as employment income or rental income) in the same year. If the loss cannot be fully absorbed, the unutilized business losses can be carried forward indefinitely to offset future years' statutory income, provided you meet the shareholding test (for companies) or remain in the same trade (for sole proprietors).

7. Mandatory Self-Employed MediSave Contributions

A common misconception is that self-employed individuals do not have to worry about CPF. While contributions to the Ordinary Account (OA) and Special Account (SA) are completely voluntary for SEPs, contributions to your MediSave Account are legally mandated by the CPF Board.

Self-employed Singapore Citizens and Permanent Residents who earn an annual Net Trade Income exceeding S$6,000 are required to make mandatory MediSave contributions. The contribution rate depends on your age and your NTI bracket, generally ranging from 4% to 10.5%.

After you file your income tax with IRAS, IRAS shares your NTI data with the CPF Board. The CPF Board will then send you a Notice of Computation (NOC) outlining your required MediSave contribution amount. You can choose to pay this in a lump sum or via GIRO installments to ease cash flow.

Calculate your personal tax rates and obligations with our Singapore Personal Tax Calculator.

8. Frequently Asked Questions (FAQ)