The Department of Statistics (DOS) said on Monday, February 9, that income from sources beyond wages will be incorporated into the government's annual household income trends report from this year, in a move aimed at providing a more comprehensive picture of income distribution in Singapore.
Under the revised approach, income from investments, rental properties, pensions, annuities and insurance payouts will be included in the annual Key Household Income Trends report.
These sources will fall under a broader measure known as household market income. At the same time, the scope of the analysis will be expanded to cover all resident households, instead of only those with at least one employed member, which was the focus of previous reports.
In an occasional paper released on the same day, the Ministry of Finance (MOF) said Singapore's Gini coefficient – a commonly used measure of income inequality – is higher when calculated using market income.
For 2025, the Gini coefficient by household income per member before taxes and transfers was 0.426 based on employment income alone but rose to 0.452 when non-employment income was included.
The report explained that while the inclusion of non-employment income sources tends to produce a more even income distribution, the wider coverage of all resident households, including those without any employed members, pushes the overall Gini coefficient higher.
Even so, figures based on both the old and new methodologies indicate that Singapore's income inequality is at its lowest level since household market income records began in 2015.
The new methodology was introduced to better reflect demographic changes, particularly the growing number of households made up solely of older, retired residents with no employment income.
Such households account for about half of all resident households in the lowest income decile. Despite being in this group, one in five of these households employs a domestic worker, 6.7% live in private housing, and 5.5% own a car.
"Market income provides a more complete picture of the income distribution and income growth trends of Singapore resident households," the report said, as reported by The Straits Times.
DOS added that the expanded data series, which starts from 2015, allows for more comprehensive analysis than approaches that focus only on employment income.
However, MOF acknowledged that capturing non-employment income comprehensively remains challenging. DOS relies on surveys such as the five-yearly Household Expenditure Survey, supplemented by administrative data where available. Survey respondents may under-report such income, particularly higher-income households that derive substantial earnings from investments, including overseas assets. DOS said it will continue efforts to improve data quality.
In international comparisons, MOF noted that Singapore's income inequality before taxes and transfers remains at the lower end among advanced economies. Based on the latest available data, the Gini coefficient stood at 0.522 in the United Kingdom, 0.517 in France and 0.513 in Japan, compared with 0.406 for Singapore.
After taxes and transfers, Singapore's income inequality is comparable with that of other developed Asian economies. The post-tax and transfer Gini coefficient was 0.367 in the UK, 0.299 in France, 0.338 in Japan and 0.34 in Singapore. MOF said the sharper reductions seen in Nordic countries are linked to higher overall tax burdens and more extensive transfers.
Singapore has instead adopted an approach that keeps the overall tax burden relatively low for most residents while providing targeted support to those who need it most. This is reflected in its tax-to-income ratio per household member, with about 11% of incomes going towards direct and indirect taxes, compared with 39% in the UK and 45% in Finland, the ministry added.
