Contractor vs Employee Calculator (Singapore)

Calculate your net salary, progressive income tax, social contributions (EPF/CPF/BPJS/EPFO), and examine cross-border compliance rules for Singapore.

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Singapore Financial Tools

Active 2026 tax engine configurations with local compliance factors.

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Utility Tool

Salary Tax Brackets Contractor

Gross Base Income

Specify salary rate

SGD / YEAR

S$ 12,000S$ 600,000

Residency & Tax Demographics

Fine tune statutory calculations

Singapore CPF Age Bracket35 years old

USD Benchmarking

1 USD = 1.34 SGD

Live Output Metrics

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Net Earnings Ratio

As Employee Net Pay77%

As Contractor Net Pay85%

Gross RemunerationS$ 84,000

Employment Option

Deducted (Tax + SS):-S$ 19,254

Net Pay:S$ 64,746

Contracting Option

Withholding Rate:15.0%

Withholding Tax:-S$ 12,600

Net Contract:S$ 71,400

Independent contractors do not receive automated employee protections or pension allocations. A withholding tax of 15% may apply when invoicing globally.

Calculated under YA 2026 progressive resident brackets. Monthly CPF wage cap SGD 8,000. Non-resident rate flat 24% with zero CPF.

Comparative Take-Home Pay (USD Equiv)

Detailed statutory analysis & overview

Going self-employed in Singapore costs you the employer's 17% CPF contribution and replaces it with a much smaller compulsory MediSave liability, and that asymmetry is the core of the comparison. A self-employed person is not required to contribute to the Ordinary or Special Accounts at all; only MediSave is compulsory, and only once net trade income exceeds SGD 6,000 for the year. Against that loss sits a genuine gain that employees cannot access: business expenses. Employment income in Singapore is effectively taxed gross, because the deduction test for employees is extremely narrow, whereas a sole proprietor deducts rent, equipment, subscriptions, professional fees, and a reasonable apportionment of home office costs before arriving at taxable profit. The administrative shift is from doing nothing to filing Form B with a statement of accounts, keeping records for five years, and monitoring the GST registration threshold. This tool prices the CPF gap against the deduction advantage so you can set a rate that is actually equivalent.

Key Regulatory Parameters & Frameworks (YA 2026)

Rule 01

Compulsory MediSave, Not Full CPF

Self-employed persons must contribute to MediSave once net trade income for the year exceeds SGD 6,000. The rate is graduated by age and income, running from roughly 4% up to around 10.5% of net trade income, applied to income up to the same annual CPF salary ceiling that applies to employees. There is no compulsory Ordinary Account or Special Account contribution, so retirement and housing savings must be self-funded through voluntary contributions if you want them.

Rule 02

Form B and the Statement of Accounts

Self-employed persons file Form B rather than the employee's Form B1, reporting trade income alongside any other income. Where annual revenue is SGD 200,000 or less you may submit a two-line statement of revenue and adjusted profit; above that a four-line statement showing revenue, gross profit, allowable business expenses, and adjusted profit is required. Business records must be retained for five years, and IRAS can and does request them.

Rule 03

GST Registration at SGD 1 Million

Registration becomes compulsory once taxable turnover exceeds SGD 1 million in a calendar year on a retrospective basis, or where you reasonably expect it to exceed that in the next twelve months on a prospective basis. Voluntary registration below the threshold is possible but commits you to at least two years of registration, quarterly returns, and the GST InvoiceNow requirement for newly incorporated registrants, so it is rarely worth it for a one-person practice.

Rule 04

No Employment Act Protection

The Employment Act covers employees, not independent contractors, so annual leave, sick leave, public holidays, notice periods, statutory maternity and paternity benefits, and protection from wrongful dismissal all fall away. Work injury compensation insurance obligations sit with an employer, not with a client, and there is no employer-funded group medical or insurance cover, so a contractor should price in personal accident, income protection, and hospitalisation cover directly.

Rule 05

Voluntary CPF and the Retirement Gap

A self-employed person may make voluntary CPF contributions, either to all three accounts under the Voluntary Contribution scheme subject to the annual CPF limit, or to MediSave alone, and the Matched MediSave Scheme provides government matching for eligible lower-income self-employed persons. Contributions attract tax relief within the relevant caps. The Supplementary Retirement Scheme is also open, allowing deductible contributions of up to SGD 15,300 a year for Citizens and Permanent Residents, which is the closest available substitute for the missing employer contribution.

Example Comparison: SGD 100,000 Salary vs. an Equivalent Contract

Scenario Context: Singapore Citizen aged 35 comparing an SGD 100,000 salaried role against a sole proprietorship billing the same headline figure, with SGD 12,000 of genuine deductible business expenses.

Calculation Stage	Computed Value
Employee: gross salary	SGD 100,000
Employee: employer CPF at 17% on wages up to the ceiling	Approximately SGD 16,320, paid on top of salary into your CPF accounts
Employee: total value of the package	Approximately SGD 116,320, plus paid leave, sick leave, and any group insurance
Contractor: gross business income	SGD 100,000
Contractor: less deductible business expenses	SGD 12,000, leaving SGD 88,000 of net trade income
Contractor: compulsory MediSave on net trade income	Roughly SGD 7,000 to SGD 9,000 depending on age band, against SGD 16,320 of employer CPF forgone
Contractor: unfunded items	Around 25 days of leave and public holidays, personal insurance, and any Ordinary or Special Account savings

Final Deducted Result:The contractor is taxed on SGD 88,000 rather than SGD 100,000 thanks to expense deductions, which is worth roughly SGD 1,400 of tax at this level, but forgoes about SGD 16,320 of employer CPF and replaces it with a much smaller compulsory MediSave amount. Once unpaid leave and self-funded insurance are added, a contract rate typically needs to be 20% to 25% above the equivalent salary to leave you in the same position, with the deduction advantage growing if you have genuinely high business costs.

Frequently Asked Questions (FAQ)

Do contractors get paid leave or sick leave?▼

No. The Employment Act applies to employees, and an independent contractor sits outside it entirely, so annual leave, paid sick leave, public holidays, notice periods, and wrongful dismissal protection are all unavailable. The practical effect is that roughly 25 non-worked days a year, about 10% of the working year, are unfunded, which is why a like-for-like contract rate has to exceed the salary it replaces before you even reach the CPF question.

Is GST registration required for contractors?▼

Only once taxable turnover exceeds SGD 1 million in a calendar year, or where you expect to exceed it in the coming twelve months. Voluntary registration below that is possible but binds you for at least two years and brings quarterly filing obligations. Because the threshold is high, most individual contractors in Singapore never register, which also means they cannot reclaim GST on their own business purchases.

How much MediSave do I actually have to pay?▼

MediSave becomes compulsory once net trade income exceeds SGD 6,000 for the year. The contribution rate is graduated by both age and income level, broadly from around 4% up to about 10.5% of net trade income, applied to income up to the annual CPF ceiling. CPF Board issues a Notice of Computation after IRAS assesses your income, and the amount can be paid in one go or by GIRO instalments. It is deductible against your trade income.

Can IRAS treat me as an employee even though I invoice?▼

Yes. IRAS looks at the substance of the arrangement rather than the label, weighing control over how and when work is done, who provides the equipment and premises, whether you bear financial risk and can profit from your own efficiency, whether you can send a substitute, and how integrated you are into the client's organisation. A person working set hours exclusively for one former employer using their laptop is vulnerable to recharacterisation, which brings CPF liability for the client on top of any tax adjustment.