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Salary component

Discuss about getting a well paid job or career advancement. Ask about salaries, expat packages, CPF & taxes for expatriate.

Sxw8181
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Salary component

Postby Sxw8181 » Tue, 02 Aug 2016 10:34 pm

Hi all,

I got a good offer package. At least it seem to me :)
But to be double sure, trying not to at the losing end.

1. Does most company also give a separate salary component for our accommodation?
Mine is IBM

2. After few years, if I decide to take PR.
Will the company deduct our basic salary?
As I learnt employer will need to contribute 17 percent.
Just afraid they will deduct this from our basic salary

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sundaymorningstaple
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Re: Salary component

Postby sundaymorningstaple » Tue, 02 Aug 2016 11:15 pm

If you take up PR they will have to deduct CPF @ 20% from your salary and the company also has to contribute at a rate of 17% (it is graduated rates the first two years of PR) and yes, you most assuredly would lose your housing allowance, or if it's built into the salary, maybe renego'd. So, if you have PR in your mind you better read your contract very carefully. A lot haven't and committed financial burdens that were onerous once they took up PR.

Sxw8181
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Re: Salary component

Postby Sxw8181 » Wed, 03 Aug 2016 7:13 am

Thanks.
I do not have the accommodation component. Should I re-negotiate? Is it common practice for big Mnc like ibm to provide?

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Re: Salary component

Postby PNGMK » Wed, 03 Aug 2016 7:22 am

It depends entirely on market supply and demand. Are you in a an industry sector where the employer is struggling to bring in people from abroad? If you're in a market sector that can be easily filled by Indians then probably not.
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Re: Salary component

Postby BBCWatcher » Wed, 03 Aug 2016 7:51 am

There used to be a tax advantage separating out the housing allowance from total cash compensation, and that's the primary reason why employers offered such allowances. No longer.(*) So just focus on the total cash compensation (plus other compensation elements, including some that are still tax advantaged, notably medical insurance). If you're satisfied with the total offer, great. If not, you can ask for more. Asking doesn't mean you'll get more.

You're years away from PR, at best, if ever, so I wouldn't worry about that. An employer is not obliged to keep you for any particular length of time -- you are an "at will" employee, I assume -- so in practice everything is negotiable anyway, at least over such time horizons. Your present arrangement will probably form the basis of any future arrangement -- will influence and inform the future -- but you wouldn't behave any differently in the present.

(*) There's a potential disadvantage in separating out a housing allowance. "Allowances" don't necessarily count toward fixed monthly salary thresholds that the Ministry of Manpower looks at when considering whether to approve DPs or PEPs, as examples. So it's in your and your prospective employer's mutual interest to avoid most separate allowances in favor of straight salary.


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