What you keep from a bonus.
Net bonus
—
Employee CPF (20%)
—
Income tax
—
Your breakdown
Updates live as you type| Step | Amount |
|---|
Why your bonus shrinks before it reaches you
A bonus in Singapore is not a separate kind of money with its own special rate. It is ordinary employment income, so it stacks on top of everything else you earned that year and is taxed at your marginal rate under the resident scale that runs from 0 to 24 percent. What makes a bonus feel smaller than the headline figure is the order of the deductions. CPF comes off first, then income tax is assessed on what is left. This tool reproduces that exact sequence, which is why the net it shows is lower than simply applying your tax rate to the gross.
One quirk works in your favour. Compulsory CPF on the bonus is tax exempt, so the taxman never sees the slice that goes into your CPF accounts. You are taxed only on the post CPF amount. People who forget this overestimate their tax bill every March.
A $24,000 thirteenth-month plus performance bonus
Suppose you are 38, earn a comfortable salary, and a strong year lands you a $24,000 bonus that pushes your top dollars into the 11.5 percent band. Assume CPF still applies, meaning you are within the annual salary ceiling of $102,000 across wages and bonus. The employee CPF rate below age 55 is 20 percent. Here is the cash, step by step.
So out of $24,000, you keep $16,992 as cash and $4,800 lands in your CPF accounts where it earns the floor interest rates. Only $2,208 is genuinely lost to tax. The chart below shows where each slice of the $24,000 ends up.
The Additional Wage ceiling, the trap most people miss
CPF treats a bonus as Additional Wage, and Additional Wage is capped. The formula is the annual ceiling of $102,000 minus the Ordinary Wages already subject to CPF for the year. If your monthly salary is high enough that your Ordinary Wages have already used most of that $102,000, only part of your bonus attracts CPF, and the rest is CPF free. In that situation, untick the CPF box for the uncovered slice, because applying 20 percent CPF to a bonus that has breached the ceiling will understate your real take-home. A practical tip: someone on a monthly salary above $8,500 will usually find that a large year-end bonus is at least partly above the ceiling, so the cash they keep is higher than a naive 20 percent CPF assumption suggests.
Does my employer withhold tax from my bonus?
No. Singapore does not operate pay-as-you-earn withholding for most resident employees. Your employer pays the full post CPF bonus into your account, and you settle the income tax later when IRAS issues your assessment, typically the following year. Set the tax figure this tool shows aside so the bill is not a surprise.
Can I reduce the tax on my bonus?
You cannot change the marginal rate, but you can lower the chargeable income the bonus sits on top of. A cash top-up to your CPF SA or RA, or an SRS contribution of up to $15,300 for citizens and PRs, both cut your assessable income in the same year, subject to the overall $80,000 personal relief cap. If the bonus has pushed you into a higher band, that is precisely the year a relief delivers the most value.