It’s no secret that the digital age has brought new income opportunities to people around the world — perhaps most notable is the ‘gig economy’ which allows people to work wherever and whenever they want, as a supplement to their income, or as a full-time job.
Now of course with this comes new territory with blurred lines. How much are you allowed to earn online? Is it actually a job? How much tax do you have to pay?
These added complexities have become prevalent enough for the Inland Revenue Authority of Singapore (IRAS) to establish some ground rules to help digital entrepreneurs have some clarification in terms of income and taxation.
So firstly, let’s go through the basics.
- All payments and benefits that come from “blogging, advertising and any other activity performed on social media platforms as a trade or business” are seen as profits from a trade or business under the Income Tax Act.
- Payments can take the form of money, goods, or services.
- All monetary and non-monetary payments and benefits are taxable if they are received in exchange for your work.
- The above also applies if the monetary and non-monetary payments and benefits go to your friends or family.
- Bloggers and social media influencers won’t need to declare non-monetary benefits if these two conditions are met:
- The product or service is given on an ad-hoc basis for one-off consumption or testing.
- The value of each product or service is not more than $100
- If the value of the product or service is more than $100, the full value of that product or service should be declared in your tax filing
- You can claim certain expenses that are “wholly and exclusively incurred in the production of income”, as well as capital allowances on machinery and office equipment, e.g. computers, coffee machines etc. You can find a full list of your claim allowances on the IRAS page Capital Allowances and Who Can Claim.
Now that we have that out of the way, let’s ask some common questions, and see what IRAS require of you if you earn money from blogging or social media. Each question will use a different activity as an example (blogging, social media influencing etc., but it will cover all online activity.
Related Read: How Taxation Works in Singapore
Social media influencing is really just a hobby for me. I don’t earn much money, I only get products to review occasionally. Is my hobby considered a business?
If it’s just a sporadic hobby, then no, it is generally not considered a business. However if your social media influencing is done regularly, and you receive money or goods to the net value of $6,000 or more, you are considered a business, and you need to declare this income as self-employed income.
I have a full-time job, but I do some part-time blogging. Will I have to pay tax for my income from blogging?
Yes, the income you receive from your social media and blogging activity is considered self-employed income so you will have to pay tax on it.
Does blogging just refer to the writing and updating of posts, or marketing products on my blog/website?
No, it actually covers a lot more than that. If you receive income from places like Facebook, Youtube, Twitter, Instagram etc., you should declare it as self-employed income.
I get sponsored by companies to do my Instagram posts. How do I declare my sponsorships?
If you get sponsored by a company for any online activity, both the sponsorship money/goods you received, and the income resulting from your posts need to be considered as self-employed income. IRAS suggests you keep a good record of all of your sponsorship related income for your annual income tax filing.
I have been reviewing/promoting a product/service for a company. Do I have to pay tax on my monetary/non-monetary income even though I didn’t sign a contract with that company?
Yes, you still have to pay tax on your income whether it was monetary or non-monetary, regardless of whether you had a contract with the company or not.
I don’t get income directly from the company I was reviewing or promoting, but I do from ads on my blog etc. Do I have to pay tax on that income?
Yes, you have to pay tax on that income, no matter where it came from, whether it be through ads or a social media management company.
How do I value the non-monetary income I receive?
In general, the taxable value of your non-monetary income (e.g. products or services you review), will be the market value of those products or services. If that product or service hasn’t been launched (and therefore there is no market price), use a similar in-market product or service’s value in its place. If there is no similar product in-market, get the value from the suppliers.
I reviewed a product or service and got a blogging fee and sample products/services in return. Are these sample products/services received taxable?
Yes, but you don’t need to declare if:
- The product or service is given on an ad-hoc basis for one-off consumption or testing.
- The value of each product or service is not more than $100.
If it is worth over $100 however, you need to declare the full value for your tax filing.
Here are some examples:
|Free Items Received for Product/Service Review||Tax Treatment|
|Cosmetics with market value of $39.||You do not need to declare, as its value is under $100.|
|A saxophone with market value of $250.||You do need to declare as its value exceeds $100.|
|Concert tickets worth $70.||You do not need to declare, as its value is under $100.|
|A meal priced at $9.||You do not need to declare, as its value is under $100.|
|Airfares valued at $100.||You do not need to declare, as its value does not exceed $100.|
|10 ebooks given upfront, each with market value of $10.||You do not need to declare, as its value does not exceed $100, and is not a recurring supply.|
|A box of 4 cakes and the market value of the whole box of cakes is worth $75.||You do not need to declare, as its value is under $100.|
|A musical instrument with a market value of $200.||You do need to declare as its value exceeds $100.|
|A 3-course meal given by a restaurant, and the bill adds up to $187||You do need to declare as its value exceeds $100.|
|All-inclusive trip including airfare, transport/transfer cost, accommodation, meals, etc. valued at $600||You do need to declare as its value exceeds $100.|
|Recurring Supply of Products/Services Provided Over Time|
|6-month app subscription, each with market value of $15||You do need to declare, as it is given over a period of time.|
|5 yoga classes worth $25 each.||You do need to declare, as it is given over a period of time.|
|One year of complimentary meals at a restaurant.||You do need to declare, as it is given over a period of time.|
|4 cooking classes worth $200||You do need to declare, as it is given over a period of time.|
After reviewing headphones worth $98, I was given a microphone worth $98 in exchange. Do I have to declare the $98?
All payments whether monetary or non-monetary have to be declared for your tax filing, given they are given in exchange for your services. In this particular case, you have to declare the $98, because that microphone is not for one-off consumption or testing.
Sometimes I get complimentary items/gifts/products, even though there was no obligation to write about them or review them. Do I need to declare these items?
If it’s given to you on an ad-hoc basis, and its value does not exceed $100, you do not have to declare the item/gift/product.
Let’s have a look at some examples:
|Items received for review||Tax Treatment|
|A gift worth $130 received during a service launch event.||You need to declare, as its value exceeds $100.|
|An unrequested gift worth $35 received in the post or through your social media management company.||You do not need to declare, as its value does not exceed $100.|
I’m a food blogger and I was invited to food tasting with two of my friends. The total bill for the food tasting was $95. Do I have to declare that $95?
No, you don’t have to declare it, since it was under $100 in value, and was given to you on an ad-hoc basis.
What expenses can I claim for my work online?
You can only claim for expenses that are “wholly and exclusively incurred in the production of income”. These expenses might be maintaining your website, payments to photographers, etc. Things like private car expenses are not claimable.
You can find a full list of your claim allowances on the IRAS page Capital Allowances and Who Can Claim.
I’m being paid to review video games, can I claim the expenses on the new graphics card I bought to play the game?
As mentioned earlier, only expenses that are wholly and exclusively incurred in the production of income are eligible for tax deduction. In this case, as your graphics card was necessary to perform your job, that expense is deductible.
I review video games, but I don’t get paid for it. Can I claim the expenses on the new graphics card I bought to play the game?
As mentioned earlier, only expenses that are incurred in the production of income are eligible for tax deduction. In this case, your graphics card expense is private in nature and not deductible unless you are receiving income from your video game review.
Where to next with your Blogging and Social Media income?
We’ve done our best to help you understand how IRAS views your blogging and social media income, however it’s obviously a new landscape to navigate.
With that in mind, everyone will have different needs when it comes to figuring out their tax requirements with blogging and social media income.
If you have any questions at all about how to figure out this new form of income, please do contact us — it’s both our job and pleasure to assist.