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Getting Paid in USD or Singapore Dollar?

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just2019
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Getting Paid in USD or Singapore Dollar?

Postby just2019 » Wed, 30 Jan 2019 2:31 pm

Hi,

I'm going to be working for US company in Singapore helping them launch their business. We've agreed to a number in USD, what the best way to get paid?

1. Do I set up an account at a Singapore bank and have that be my direct deposit? If so when does the USD get translated to Singapore dollar?

2. Do I get paid in USD at US bank then transfer to a Singapore bank?

Just trying to understand the options here, I'll be living in Singapore full time, the company is primarily based in US but has a license and will be building its presence in Singapore.

3. How does the US government know to not tax you on the first $102K when living abroad? Or do you pay it all with each check then in April, request a refund? Thank you so much!

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Re: Getting Paid in USD or Singapore Dollar?

Postby Strong Eagle » Wed, 30 Jan 2019 11:46 pm

  1. I assume that your US company has established the appropriate legal entity to have you working in Singapore, in all likelihood, a private limited company. If not, all remaining comments are null and void.

  2. As a result of a) above, you will have been issued and employment pass (EP) to legally live and work in Singapore. If this is not the case, then all remaining comments are null and void.

  3. With your EP, you are legally resident in Singapore for earned income tax purposes. It does not matter what currency you are paid in, nor does it matter which bank receives your pay, nor the country in which the bank is located. Because you are legally resident in Singapore, you will pay Singapore income tax.

  4. The US company will NOT file a W2 for you, nor will they take out social security or withholding because you are working for a foreign branch of the company. There are rare exceptions to this point; it would be highly unusual for you to have either of the above taken from your paycheck.

  5. Your Singapore employer will report your earned income to IRAS on form IR8A. You can use this form (translated to USD) as proof of your overseas earnings when filing your US return to claim your earned income exemption and pay taxes on non exempt earnings, but be clear that in the 8 years Iived in Singapore, I filled out US tax returns but I never once showed proof of overseas earned income. I was never asked.

  6. As for your questions about Sing $$ vs US $$, it all comes down to three things: What is the best exchange rate you can get, what currency will you do most of your spend with, and how worried are you about exchange rate fluctuations. In my experience, most people opt to be paid in SGD into a Singapore based bank account because it's easier and gives you a financial history in Singapore for the purposes of credit cards, etc... no... Singapore banks don't give a shit about your USA credit reports.

just2019
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Re: Getting Paid in USD or Singapore Dollar?

Postby just2019 » Thu, 31 Jan 2019 12:02 am

Thank you so much, this is very helpful!

If I’m reading this correctly my best bet is to have my company do a one time pharmac thank you so much, this is very helpful!

If I’m reading this correctly my best bet is to have my company do currency conversion and then get paid into a SG bank. This will allow for greater credit history as I spend more time in Asia.

Is it normal to have my company reassess the currency’s if the Singapore dollar happens to go down or up during my bi-weekly payments?

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Re: Getting Paid in USD or Singapore Dollar?

Postby Strong Eagle » Thu, 31 Jan 2019 2:52 am

just2019 wrote:Thank you so much, this is very helpful!

If I’m reading this correctly my best bet is to have my company do a one time pharmac thank you so much, this is very helpful!

If I’m reading this correctly my best bet is to have my company do currency conversion and then get paid into a SG bank. This will allow for greater credit history as I spend more time in Asia.

Is it normal to have my company reassess the currency’s if the Singapore dollar happens to go down or up during my bi-weekly payments?


Assuming your company doesn't care... and I don't know if that's a fair assumption giving that most global companies of any size have process in place to deal with currency fluctuations... you need to decide if you want to be paid in US dollars or Sing dollars.

If your salary is set in US dollars and you are paid in US dollars, deposited into a Sing dollar denominated bank account, your pay will be converted at whatever the current exchange rate is, that is, it will vary. Historically, SGD/USA exchange rates have been fairly stable... you can look at xe.com to see the history. You essentially assume the exchange rate risk.

If your salary is set in Sing dollars and you are paid into a Sing dollar bank account, then the company assumes the exchange rate risk and you are always paid the same amount each month.

It is also possible to be paid in US dollars into a US dollar denominated bank account in Singapore. This is great so long as you don't need to access US dollars, as there is no exchange rate risk involved. But, if you need Sing dollars, you need to convert from your US dollar account. AFAIK, Citibank is the big player in US dollar accounts and their exchange rates suck. Some people take out US dollars and go get them changed at Raffles Plaza where the most competitive money changers do business.

You can ask for anything you want in your contract but I've never seen an exchange rate guaranteed contract. You choose your currency and takes your chances. Choose SGD and the currency goes down, it doesn't matter for local purchases but your value against USD goes down. Protecting against exchange risk is very difficult for an individual to do.


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