$0 income tax 2019
Personal Finance

How I managed to pay $0 in income taxes for 2019

Income tax season in Singapore is over and I just received my first ever notice of assessment. It came up to a grand total of $0 due!

Source: IRAS account statement

Let me preface this post by saying that everything I’ve done is perfectly legal and I do not condone nor encourage any form of tax evasion.

How did I do it?

We will first have to talk about the income tax system in Singapore. It is a tiered progressive tax system, meaning if you earn more, you pay more.

Source: IRAS

I’ve omitted the later portions as my income for 2019 is not even anywhere close to those numbers. As we can see, the magical number to reach is $20,000 where you won’t have to pay a single cent to IRAS.

For the year of 2019, it was the year when I first started work in June. Therefore I did not actually have a full year of salary. CPF contributions are also not included in tax calculations. This helped a lot in reducing my chargeable income for the year.

The magic here to reducing my chargeable income is deductions!


My assessable income for the year was about $40,000. Almost 2 times that of the $20,000 target I wanted to reach. I made use of the various deductions that are available to me to reduce my chargeable income.

The first was as mentioned earlier, CPF deductions. 20% of my salary is automatically deposited into my CPF account every month. That also effectively reduced my chargeable income by 20%.

The second was NSman deduction. Having spent 2 years of my life serving in the military and a week for reservist last year, I’m given $3,000 of deduction off my taxes.

The biggest reduction in my chargeable income would be the parents relief! As my parents are retired and not working now, I’m able to put them as my dependent and take $9,000 off my chargeable income.

This effectively took my $40,000 to just below the $20,000 target that I was aiming for.

my total income tax in singapore for YA 2019
Source: IRAS Notice of Assessment

The magic number of $0!

Next year’s tax season

For Year of Assessment 2020, it’ll definitely be a lot harder to reach $0 as compared to 2019 as I would have worked a full year. I would also have to take into account the bonus I received this year for last year’s performance at work.

There are still multiple ways of reducing taxes that I’ve yet to explore such as topping up of my CPF Special Account which I’ll definitely look into next year.

For anyone reading, I hope that this can be an inspiration to you to do some homework and lower your payable taxes for the next year. Even though Singapore has one of the lowest income tax rates in the world, it wouldn’t hurt to still lower that further. You can start to do some planning this year to lower your income taxes for next year!

If you’re interested to follow my financial journey, check out how much my net worth has grown over the first year of work here!

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