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Example of Make-Up Pay (Income Tax Option) Calculation

If your Notice of Assessment (NOA) for the year of your Operationally Ready National Service (ORNS) activity is not available at the time of your Make-Up Pay claim submission, a provisional payment will be made based on your latest available trade income.

An adjustment will then be made when the trade income for the year of your ORNS activity is available. If the adjustment results in an underpayment, arrears will be paid to you. But if the adjustments result in an overpayment, it will be recovered from you. If there are any additional claims, the overpayment will be offset first.

The trade income for the provisional payment and subsequent adjustment will be obtained directly from IRAS for claimants who choose to claim under this option.


This calculation of Make-Up Pay under this claim option is based on the number of calendar days there are in the year of your ORNS activity, except for remisiers and SGX traders, excluding weekends and public holidays.

The following is an example of how your Make-Up Pay is calculated:

Occupation: Sole proprietor of a business
Period of ORNS activity: 1 to 20 November 2017
Duration: 20 days
Total days in November: 30 days

Monthly Service Pay of an Infantry 3SG = $990
Service Pay for this period:
= 20/30 days x $990
= $660

Since the trade income for the year of your ORNS activity will not be available at the time of your claim submission, a provisional payment will be made based on your latest available trade income.

NOA 2017 (your income earned in 2016): Trade income = $24,000

Pro-rated provisional income loss due to your ORNS activity, based on your latest available trade income:
= (Trade income / total days in 2016) x ORNS activity duration
= ($24,000 / 365) x 20
= $65.57 x 20
= $1,315

Result: Your provisional Make-Up Pay for this period:
= Your loss in civilian income – Service Pay for the duration of your ORNS activity
= $1,315 – $660
= $655

 

a. If your pro-rated adjusted income for the year of your ORNS activity is more than your provisional Make-Up Pay

NOA 2018 (your income earned in 2017): Trade income = $30,000

Pro-rated adjusted payment based on your latest available trade income loss due to your ORNS activity:
= [Trade income / (total days in 2017 – days where provisional income was claimed)] x ORNS activity duration
= [$30,000 / (365 – 20)] x 20
= $86.96 x 20
= $1,739.20

Therefore, arrears owed to you after adjustment:
= (Adjusted income loss – Service Pay for the duration of your ORNS activity) – Provisional Make-Up Pay
= ($1,739.20 – $660) – $655
= $424.20

 

b. If your pro-rated adjusted income for the year of your ORNS activity is less than your provisional Make-Up Pay

NOA 2018 (your income earned in 2017): Trade income = $20,000

Pro-rated adjusted payment based on your latest available trade income loss due to your ORNS activity:
= [Trade income / (total days in 2017 – days where provisional income was claimed)] x ORNS activity duration
= [$20,000 / (365 – 20)] x 20
= $57.97 x 20
= $1,159.40

Therefore, outstanding payment you owe MINDEF after adjustment:
= Provisional Make-up Pay – (adjusted income loss – Service Pay for the duration of your ORNS activity)
= $655 – ($1,159.40 – $660)
= $155.60


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Last update: 10 Nov 2017

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