Skip to content

ExpatSingapore

Home Message Board Contact Us Search

ExpatSingapore Message Board 29 April 2017, 19:16:38 PM *
Username: Password: (or Register)
 
Pages: [1] 2
  Reply  |  Print  
Author Topic: Singapore Tax and allowances  (Read 14234 times)
Geezer
Guest
« on: 03 May 2001, 14:22:00 PM »
Reply with quoteQuote


I hope someone can help answer some questions regarding the tax structure in Singapore.

I am currently negotiating my contract with my employer.

They are offering a housing allowance of S$3500 per month. This is to be paid in addition to my basic salary and I am to pay the landlord direct every month.

They are also offering to pay me an additional S$2000 to be used for transportation. I intend to lease a car, pay for insurance, maintenance and petrol out of this allowance. Again all in my name, not the company.

My question is will I be required to pay tax on my Housing and Transportation allowance?

Will these allowances be considered as my overall income?

If so, will this mean I fall into a higher tax bracket?

Any idea's what my average overall tax rate be?

I hope someone can help clarify

Thanks

Logged


taxes
Guest
« Reply #1 on: 03 May 2001, 14:35:00 PM »
Reply with quoteQuote

Go to the Inland Revenue Authority of Singapore website "www.iras.gov.sg". Look under "Tax Information".
Logged
Geezer
Guest
« Reply #2 on: 03 May 2001, 14:53:00 PM »
Reply with quoteQuote

Yeah, I did that earlier but the info didn't really answer my concerns.

I've e-mailed them but was hoping someone who's actually got a similar arrangement could tell me how it works for them....

If housing allowances are taxable (an it looks like they are) does it raise my tax bracket? If so what to? The site has all the tax breaks on it but the rates they quote are from 1997. I was wondering if there was an average I could use...

They also mention car allowances but only if the company leases them. I was wondering if I submitted receipts for this would it be tax deductable.

Hope someone can help...

Logged
Response
Guest
« Reply #3 on: 03 May 2001, 15:01:00 PM »
Reply with quoteQuote

I'm in a similar boat and I recently spent a long time trying to figure all of this out. You will be in a higher tax bracket, but not by much. All of these are Benefits-in-Kind. You will likely be taxed an additional 10% for the housing subsidy and a fractional increase for all the rest (I will not be getting a car allowance, so I didn't work that part out). Unlike the US, where I am, in Sg. you are not taxed as if these benefits were straight income. In my own case, (S90,000 + housing + schooling, etc.,) my taxes were only a few thousand more. Good Luck.
Logged
MD
Guest
« Reply #4 on: 03 May 2001, 15:56:00 PM »
Reply with quoteQuote

I am getting a housing allowence from my employer. Although I have yet to receive my tax bill I was told the allowences will be added to your salary and treated the same. My advice is to try to get the employer to put his name on the lease. I tried but told NO.
Good luck
Logged
Mark D
Full Member
***
Posts: 34


View Profile
« Reply #5 on: 03 May 2001, 16:56:00 PM »
Reply with quoteQuote

As far as I am aware, the tax situation is as follows;
If the housing allowance is paid to you direct (eg like salary) then it is taxed at your highest marginal rate
If the housing allowance is paid DIRECT to the landlord, and the property is leased in your employers name rather than yours, you will be taxed on 10% of the rental value of the property. Eg if the annual rent is $40,000 the taxable benefit is $4000 and you pay tax at your highest marginal rate on that. Additionally the taxable benefit goes up depending on numbers of a/c units and whether the property is furnished.
Car allowances are just taxed as straight salary.
Therefore it is preferable to get your housing allowance paid direct to the landlord and the property leased by your employer.
By the way the tax rates on the IRAS web site are still valid, although the rates go down in 2002. You can use the table to calculate your overall tax fairly easily.

[This message has been edited by Mark D (edited 03-05-2001).]

Logged
Spot on
Guest
« Reply #6 on: 03 May 2001, 18:17:00 PM »
Reply with quoteQuote

Mark D, you are spot on. I am doing the same and the other benefit of getting the employer to sign the lease you are saving money by not having to pay the lease and security deposits and in case you loose your employment you won;t have to worry about having to get rid of the property....
Logged
Response
Guest
« Reply #7 on: 04 May 2001, 14:11:00 PM »
Reply with quoteQuote

I am not sure about this advice and would check it out. I did an actual practice return last week and the form gives one of two choices: 1) tax on the whole amount or 2) tax on 10% of your income (NOT the amount of the housing allowance). For example, if you make S$ 100,000 and your rental allowance is S$ 40,000, you have the choice of being taxed on 10% of 100,000 (S10,000) or the full amount. Of course (and the instructions say) to go with the lower number.
Logged
Response
Guest
« Reply #8 on: 04 May 2001, 14:16:00 PM »
Reply with quoteQuote

I should add that if you are being paid DIRECT (like salary) even if it is to be USED for rent, then I can see how this would be taxed as straight salary (my employer will subsidize my apartment directly so it will not count as income).  
Logged
Response
Guest
« Reply #9 on: 04 May 2001, 14:42:00 PM »
Reply with quoteQuote

This is the IRAS link that answers this:
http://www.iras.gov.sg/TaxInfo/Income/iitemply8.htm
Logged
Mark D
Full Member
***
Posts: 34


View Profile
« Reply #10 on: 04 May 2001, 15:15:00 PM »
Reply with quoteQuote

Sorry, I think Response is right. Housing allowance would be taxed on 10% of your income not the allowance, assuming this produces lower tax.

For example. Assume your income is $100k pa and your housing allowance is $40k. Your taxable income would be assessed at $110k (ie your salary + 10% of your salary for your housing allowance). If your place is furnished your taxable income would be further increased eg $10 per month for a fridge, $15 per month for a washing machine.

This is based on the assumption that your employer pays rent to your landlord direct. If it is paid to you it would be regarded as salary and your taxable income would be $140k in the examaple above, hence you would pay more tax.

Logged
et
Full Member
***
Posts: 36


View Profile
« Reply #11 on: 04 May 2001, 17:44:00 PM »
Reply with quoteQuote

Taxation in Singapore can get rather complicated, but I will try and answer with the available info.

>They are offering a housing allowance of S$3500 per month. This is to be paid in addition to my basic salary and I am to pay the landlord direct every month.

Ans: Taxable value (to be added to your taxable income) = [Lower of (10% x employment income or ($3500x12)] - Actual rental paid

>They are also offering to pay me an additional S$2000 to be used for transportation. I intend to lease a car, pay for insurance, maintenance and petrol out of this allowance. Again all in my name, not the company.

Ans: Whatever you incurred for course of business is deductible against the allowance, and the net amt taxable.

My question is will I be required to pay tax on my Housing and Transportation allowance?
Ans: Yes

Will these allowances be considered as my overall income?
Ans: Yes (but not 100% of it, see above)

If so, will this mean I fall into a higher tax bracket?
Ans: It may and probably will.

Logged

~ et
dihult
Guest
« Reply #12 on: 04 May 2001, 23:46:00 PM »
Reply with quoteQuote

All this information is really good to know yet I need to ask about the tax liability that US citizens are faced with.

I've read on this board about tax equalisation yet my employer states they don't do that. End result is that I will be liable for US taxes as well...right?

I think I read there is an exemption of $80,000 usd and everything beyond that, including fringes, which add up to a sizable amount, are taxed at a fixed rate and goes to Uncle Sam.

My question is how do I minimize this burden concerning US taxes? I've sold my US residence so I can't deduct that. My kids are getting older so there goes another dedcution.
Please, someone throw me a rope with some advise. I contacted my financial adviser yesterday in the US to see what he had to say but he was unaware and needed to research further. Perhaps one of you out there has the answer.

Thanks.

Logged
Response
Guest
« Reply #13 on: 05 May 2001, 0:49:00 AM »
Reply with quoteQuote

et is correct if the housing allowance is added to your salary. But what if your employer leases the property and your allowance is simply a break in rent? One would think that it is the same from the iras link above -but others on this message board appear to have a different view. Does anybody know?
Logged
KC
Guest
« Reply #14 on: 06 May 2001, 17:02:00 PM »
Reply with quoteQuote

Housing allowance:
only when the employer takes over the lease and pays the landlord directly will the housing allowance be added to your income according to following rule (value of benefit of kinds house)= 10% of employment income OR the annual value of premises. Note employment income is sum of salary+bonus+allowances. If for example the rent is 4500 and your employer only gives you housing of 4000, than the difference in rent (12*500) can be deducted from the taxable value. If the employer DOES NOT take over the lease, but pays the allowance directly to employee, than the allowance will be added as income. So make sure that they will take the lease, otherwise you will be taxed on the full amount.

Car allowance:
same thing. Company has to lease the car. If cost of petrol is borne by employer, value of car benefit that is added to your income= (3/7 x rental cost incurred by employer)+($0.10 per km x private mileage if cost of petrol is borne by employer) or (3/7xrental cost incurred by the employer) if cost of petrol is borne by employee. The formula gets a bit more complicated if the company buys a car instead of leasing.
www.iras.gov.sg/TaxInfo/Income/iitemply8.htm  for detailed info on accomodation benefits and www.iras.gov.sg/TaxInfo/Income/iitemply4.htm  taxable car benefits.

It comes down to this: if the company pays out the allowances directly to you, regardsless whether you pay the rent of house and car, the allowances will be taxed at full amount. If the company takes over the rental agreements and pays direct, the value of the allowances will be taxed at a lower amount.

Logged
Pages: [1] 2
  Reply  |  Print  
 
Jump to:  

Powered by SMF 1.1.20 | SMF © 2013, Simple Machines