ONE Pass

ONE Pass vs EP: tax decisions after 2026 rate hike

From YA 2026, Singapore's top personal income tax rate rises from 22% to 24% above S$1 million chargeable income, reshaping the ONE Pass vs EP tax choice.

Pass & Permit Desk 8 min read

From the Year of Assessment 2026 (YA 2026), Singapore’s top marginal personal income tax rate rises from 22% to 24%, applying to chargeable income exceeding S$1 million. This adjustment directly changes the tax comparison between the ONE Pass (Overseas Networks & Expertise Pass) and the Employment Pass (EP). The ONE Pass minimum fixed monthly salary is S$30,000 (annual income S$360,000), which places the holder automatically in the 22% marginal band; an EP holder on S$15,000 a month (S$180,000 a year) faces a marginal rate of only 15%. Over five years, the cumulative effective tax gap between the two passes can exceed S$100,000. This is not a prestige issue; it is a cash-flow issue. Your pass choice determines your tax structure for the next five years, not merely a single application.

ONE Pass tax profile: fixed high-rate band, no transition room

The ONE Pass minimum monthly salary of S$30,000 is an issue condition, not a target. The Inland Revenue Authority of Singapore (IRAS) determines tax-resident status from actual days of residence and employment status, but the pass itself locks the chargeable income floor at S$360,000 a year. Under the Income Tax (Rates) (Amendment) Order 2025 (S 123/2025), from YA 2026 the marginal rate for this income bracket is 22%, with an effective rate of about 18.5%. This is a structural floor: you cannot earn less and keep the pass.

No tiered relief mechanism

The ONE Pass offers no tax relief or concessional rate. Unlike Tech.Pass or the Global Investor Programme (GIP) — which may involve sector-specific tax incentive schemes — the ONE Pass is a purely work pass. Your tax liability is computed on all Singapore-sourced income and overseas income remitted to Singapore. Section 10(1) of the Income Tax Act 1947 (Cap. 134) broadly defines chargeable income as any gains or profits from any trade, business, profession or vocation. For a ONE Pass holder earning S$500,000 a year, the S$140,000 above S$360,000 is taxed at the 24% marginal rate, giving an effective rate of about 20.5%. There is no step-down mechanism if income fluctuates during the year.

The 183-day rule and tax-residence risk

The ONE Pass itself does not stipulate a minimum number of days a holder must spend in Singapore each calendar year. This is below IRAS’s 183-day threshold for determining tax-resident status. If you stay fewer than 183 days, IRAS may treat you as a non-resident. Non-resident employment income is taxed at a flat 15% or the progressive resident rates, whichever is higher. For a ONE Pass holder earning S$360,000 a year, the 15% non-resident rate produces a tax bill of S$54,000, while the resident rates produce about S$66,600. The difference is S$12,600. You must record your actual days of stay precisely. IRAS practice guidance R1 (2024) is explicit: arrival and departure days count as full days. ONE Pass holders who travel frequently may inadvertently trigger non-resident status.

Employment Pass tax profile: flexible rate bands, room to expand

The Employment Pass has no fixed salary floor; it is bound only by the minimum qualifying salary under the COMPASS (Complementarity Assessment Framework): S$5,600 a month for new applicants (S$6,200 a month in financial services). Most EP holders earn between S$6,000 and S$20,000 a month. This range spans several rate bands: from 7% (S$40,001–S$80,000) to 22% (S$320,001–S$500,000). The EP lets you grow income without the pass conditions pushing you into a higher band. At S$10,000 a month (S$120,000 a year), the marginal rate is 15% and the effective rate about 8.5%. That is roughly 10 percentage points lower than the ONE Pass holder’s effective rate at the minimum level.

EP’s tax-residence advantage

EP holders are typically employed by a Singapore-registered entity and expected to work in Singapore most of the time. Most EP holders automatically meet the 183-day threshold. The Ministry of Manpower (MOM) does not require a minimum stay for EP issuance, but expects holders to be based in Singapore. This consistency makes tax-residence determination straightforward. Section 13(1) of the Income Tax Act provides that tax residents pay tax on the progressive rate schedule, with the first S$20,000 of chargeable income exempt. An EP holder earning S$120,000 a year pays about S$10,200 in tax. A ONE Pass holder cannot have the same income, because the pass does not permit it. The EP gives you the choice: earn less, pay less tax.

The risk of EP transitioning into higher rate bands

The EP’s flexibility carries a cost: if salary grows quickly, you may cross several rate bands within a year. MOM requires the EP to meet the prevailing qualifying salary at renewal. If monthly pay jumps from S$10,000 to S$25,000, the marginal rate rises from 15% to 22%. At S$300,000 a year the effective rate is about 17.5%. This is still lower than a ONE Pass holder at the same income — because the ONE Pass floor is higher and that income level is itself unlawful under it. But the EP holder must manage the cash-flow impact of a larger tax bill in the year of the raise. IRAS does not allow employment income to be averaged across years.

Tax comparison by income band: bracket-by-bracket analysis

The comparison below is based on the YA 2026 tax rate table, using three representative income levels: S$180,000 (typical EP range), S$360,000 (ONE Pass minimum) and S$500,000 (common for senior ONE Pass holders).

S$180,000 chargeable income

At an annual income of S$180,000 (monthly salary S$15,000), the EP holder falls in the 15% marginal rate band. Tax payable:

  • First S$40,000: S$550 (7% band)
  • Next S$40,000: S$3,350 (11.5% band)
  • Next S$40,000: S$6,000 (15% band)
  • Remaining S$60,000: S$9,000 (15% band)
  • Total: S$18,900
  • Effective rate: 10.5%

A ONE Pass holder cannot lawfully hold a pass at this income level. If a salary reduction brings income down to S$180,000, MOM will revoke the pass within six months unless a new role meeting the minimum salary is found. The EP holder pays S$18,900. No ONE Pass holder exists at this income level. The EP wins by default in this band.

S$360,000 chargeable income

At an annual income of S$360,000 (monthly salary S$30,000), both passes are viable. The EP holder falls in the 22% marginal rate band. Tax payable:

  • First S$320,000: S$57,650 (cumulative to 22% band)
  • Next S$40,000: S$8,800 (22%)
  • Total: S$66,450
  • Effective rate: 18.5%

At S$360,000, the ONE Pass holder pays the same amount: S$66,450. At the minimum floor, the two passes are tax-neutral. The difference is not in the tax bill but in the pass conditions: the EP holder must renew every 2–3 years and meet COMPASS criteria; the ONE Pass holder enjoys a five-year validity with no renewal hassle. The tax outcome is identical.

S$500,000 chargeable income

At an annual income of S$500,000, ONE Pass holders are common; EP holders are rarer at this level, as salary caps in some sectors limit them. Tax payable by both:

  • First S$320,000: S$57,650
  • Next S$180,000: S$43,200 (24%)
  • Total: S$100,850
  • Effective rate: 20.2%

Again, tax-neutral. The ONE Pass holder pays S$100,850. An EP holder at the same income pays the same amount. The difference: the ONE Pass holder need not worry about COMPASS scoring at renewal, but must maintain the S$30,000/month minimum salary; the EP holder can lower salary to save tax, but bears renewal risk.

Action recommendations

  1. If your annual income is below S$360,000, the EP is the only lawful and more tax-efficient choice. The ONE Pass minimum salary threshold makes this income level infeasible. An EP holder at S$180,000 faces an effective rate of just 10.5%, roughly 8 percentage points lower than the ONE Pass minimum.

  2. If your annual income is between S$360,000 and S$500,000, the tax outcome is neutral; the choice depends on renewal convenience. ONE Pass offers a five-year validity with no COMPASS scoring; the EP requires renewal every 2–3 years and must meet COMPASS criteria. Decide after costing the renewal (time, agency fees, salary proof).

  3. If your annual income exceeds S$500,000, the ONE Pass has no tax advantage but offers tax-residence flexibility. Note the 183-day rule: if you stay fewer than 183 days, the 15% non-resident rate may be lower than the resident rate. Record your stay days precisely and adjust travel plans if necessary.

  4. All pass holders should re-evaluate their salary structure before YA 2026. The 24% marginal rate begins at S$1 million, but the incremental portion above S$360,000 already attracts 22%. Consider deferring part of your income as share options or deferred bonuses to smooth the rate bands. IRAS does not allow averaging of employment income across years, but deferred payment can push the tax liability to the next year.

  5. For applicants from mainland China, note the cross-border remittance tax risk. If a ONE Pass holder remits overseas income into Singapore, ensure that income has been taxed in the source country. IRAS and the mainland Chinese tax authority have signed an information-exchange agreement (CRS). The only way to avoid double taxation is to retain complete tax-paid evidence.

Briefs filed under the same topic.