Singapore to include non-wage income in annual household income report going forward

SINGAPORE – Income from streams other than employment will be factored into the Government’s annual household income trends report going forward, the Department of Statistics (DOS) said on Feb 9.

The change means income sources such as investments, rental properties, pensions, annuities and insurance payouts will be accounted for in the

annual Key Household Income Trends report

, under a broader measure termed household market income.

At the same time, the scope of analysis has been widened to cover all resident households, when previous reports had focused solely on resident households with at least one employed person, said DOS.

In an occasional paper released on Feb 9, the Ministry of Finance (MOF) said Singapore’s Gini coefficient – a measure of income inequality – was higher when measured by market income.

The Republic’s 2025 Gini coefficient by household income per member before taxes and transfers was 0.426 under the old tabulation that used only employment income, and 0.452 when measured by market income.

The report said that while the addition of non-employment income sources resulted in a more even income distribution, the expansion of coverage to all resident households, including non-employed households, resulted in a higher Gini.

Figures under both new and old methodologies show that Singapore’s income inequality is at its lowest since records on household market income began in 2015.

The new method was introduced to account for the growing number of households here comprising solely older, retired people with no income as Singapore ages. This group accounts for half of all resident households in the lowest income decile.

One in five, or 20 per cent, of households in the lowest income decile employed a domestic worker, while 6.7 per cent live in private housing, and 5.5 per cent own a car.

“Market income provides a more complete picture of the income distribution and income growth trends of Singapore resident households,” said the report.

In a statement on Feb 9, DOS said the new data series based on the expanded income coverage and all resident households began from 2015. It enables a more comprehensive analysis of household income trends compared with just using employment income for employed households.

However, MOF said it is challenging to capture non-employment income comprehensively.

DOS collects non-employment income data through surveys, such as the five-yearly Household Expenditure Survey, and supplements it with administrative data where available.

“Survey respondents may under-report, resulting in underestimated asset incomes, particularly for higher-income households that earn more from investments, including overseas assets,” said the ministry.

DOS will continue to improve the quality of the data, it added.

Compared with other countries, Singapore’s level of income inequality before taxes and transfers is at the lower end of the range among advanced economies, said MOF. 

Based on the latest available data, the Gini coefficient of the United Kingdom based on the square root scale was 0.522, France’s was 0.517, while Japan’s was 0.513. Singapore’s came in at 0.406.

After taxes and transfers, Singapore’s income inequality was comparable to that of other developed Asian economies, noted MOF.

It was 0.367 for the UK, 0.299 for France, and 0.338 for Japan. Singapore’s Gini coefficient after taxes and transfers was 0.340.

A lower Gini coefficient indicates greater income equality in an economy, while a higher number means greater income inequality.

The larger reduction in the Gini coefficient observed in the Nordic economies (such as Sweden, Denmark and Norway) is associated with higher overall tax burdens on the population and more extensive transfers to those of lower income, said MOF.

Singapore has taken a different approach, maintaining a relatively low overall tax burden for the majority of Singaporeans while providing targeted support to those who need it most, it added.

This is borne out by Singapore’s tax-to-income ratio per household member, said the ministry. About 11 per cent of incomes go towards direct and indirect taxes here, compared to 39 per cent of incomes in the UK and 45 per cent of incomes earned in Finland.