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F.A.Q.: Frequently Asked Questions - Money Matters PDF Print E-mail
Frequently Asked Questions - Money Matters

Question:My employer is proposing to split my 'required' salary into a salary and then the remainder into a housing allowance. From what I've read, the allowance would simply be added to my salary for tax purposes BUT my employer seems to think that it's only chargeable at a flat rate of 10%. Has anyone come across this before? I will try other resources (my firm is a MNC and we have (somewhere) a person who apparently can answer my question - but try to track them down!), but I'm hoping someone can give me the scoop on the treatment of their housing allowance.

Answer:It really is best to talk to a CPA, but here it goes. If the housing benefit is given to you in cash,the entire sum is taxable. If the housing is a Benefit-in-Kind, that is, if the company rents the place for you and pays the landlord, (you may have your portion deducted out of your salary), the income to you is calculated as the lower of 10% of your income or the annual value of the premise. Since the annual value is almost always higher, yeah, your housing allownace is considered to be10% of your income. (all this is assuming you are not a director.)


Question: Can you provide any links to salary sites for professions in Singapore, such as IT ?

Answer: Certainly - here are two.  Keep in mind, though, that you may well be offered less than the figures stated here - they are not intended to be any more than a rough guide.

Question: As a foreigner with an employment pass, what are the typical costs that I should expect for basic services eg examination. Similarly for dental, pediatrics, optometry, family doctor, and obgyn. Will I need to get private insurance, and if so what are the costs involved?

Answer: In general, there is no discrimination between local and foreign patients for private hospitals. That is the costs are the same. It is true that citizens may get preferential treatment in govt hospitals. But I would not encourage you to go to the govt hospitals as in exchange for a slightly lower price you wait a lot longer.

On private medical insurance, it would be wise to have it if you have young children, say up to 7 years or so. That is when medical bills seem to be high. Otherwise, most Singaporeans do not have medical insurance. (It is tough to find these guys selling medical insurance. Last time I used them in 1992, there were only 2 such companies around. The situation may have changed since.)
I can appreciate your concern, coming from Canada. But I would not be unduly worried about medical expenses unless you have some chronic health problems. As a grad student, in my final year in the US in 1991, my wife and I paid US$1,600 for medical insurance. That is around S$2,500 a year. Since my return, we have never come anyway close to that amount except for last year when my daughter had to go for some minor surgery. (BTW, I took up medical insurance that cost S$1,600 for a year for the two of us after our return. Because our medical bill did not come up to S$1,000 we gave it up the second year.)

Question: What is the salary range of someone with a Ph.D. degree and more than 10 years working experience? What other benefits should one ask for?

Answer: We do not normally comment on salary ranges or the perks that one should be looking at. We do however have an article on our site briefly mentioning the 'expat package' which we recommend reading : The rest of it, we feel, should be left to the individuals who would have an idea of what he or she wants, the expertsise or skills that come from one's training or acquired work experience, as well as the trade-offs one will invariably have to consider, such as better pay but greater 'hardship' in more 'difficult' locations.

A word of caution: many companies in Singapore are cutting down on expat packages and perks as many find they cannot afford to do so in these economically difficult times.

Question: I gather that Singapore has a tight labour market. Does this mean I can push my case for pay?

Answer: It depends on your area of work. Find out if your area of work has more than a handful of employers. If there is only so much action in Singaporein your area of work, there will be a bit of take-it-or-leave-it on the part of the hirer. In such a case, if you really want the job, do not push the bargain too hard.

Question: I arrived in Singapore in December last year, while my friend arrived last August.  Why are we taxed

Answer: Well, the tax rules in Singapore mean that every April 15, you have to submit a tax return on the income you earned in the last year.  So April 15 2000 is concerned with the income of 1999 in other words.   The rules for foreigners are as follows:

a.   If you earned a total of less than S$8000 in the past year (or part thereof) then you do not have to pay any tax because this amount is the amount of allowance or tax-free entitlement which you are permitted by the government.

b.   If you earned more than S$8000 but were resident in Singapore for less than 60 days in the past calendar year (i.e. you may have arrived in December), you are treated as a non tax resident and do not have to pay any tax on this income.  Depending on your country of origin though, legalities could mean you owing tax to them although whether you settle it or not is up to you!

c.   If you earned more than S$8000 and were in Singapore for between 60 and 183 days, then you are still treated as a non tax resident but you will be taxed on your emplyment income at 15% or resident rates - whichever gives rise to higher tax.

d.   If you earned more than S$8000 and were in Singapore for more than 183 days, you are treated as a tax resident and taxed in the normal way - tax rates from 2 to 28%.

The following section of the IRAS website should help you make sense of all this if you are still feeling confused:

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