Singapore Expats

Getting Paid in USD or Singapore Dollar?

Discuss about getting a well paid job or career advancement. Ask about salaries, expat packages, CPF & taxes for expatriate.
Post Reply
just2019
Newbie
Newbie
Posts: 3
Joined: Wed, 30 Jan 2019 2:24 pm

Getting Paid in USD or Singapore Dollar?

Post by 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!

User avatar
Strong Eagle
Moderator
Moderator
Posts: 11618
Joined: Sat, 10 Jul 2004 12:13 am
Answers: 9
Location: Off The Red Dot
Contact:

Re: Getting Paid in USD or Singapore Dollar?

Post by 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
Newbie
Newbie
Posts: 3
Joined: Wed, 30 Jan 2019 2:24 pm

Re: Getting Paid in USD or Singapore Dollar?

Post by 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?

User avatar
Strong Eagle
Moderator
Moderator
Posts: 11618
Joined: Sat, 10 Jul 2004 12:13 am
Answers: 9
Location: Off The Red Dot
Contact:

Re: Getting Paid in USD or Singapore Dollar?

Post by 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.

just2019
Newbie
Newbie
Posts: 3
Joined: Wed, 30 Jan 2019 2:24 pm

Re: Getting Paid in USD or Singapore Dollar?

Post by just2019 » Thu, 14 Mar 2019 12:56 pm

Yea you're right, I'll definitely need to pick a currently.

What I'm thinking of doing is making 2 deposits from my monthly pay. 70% in SGD and the rest in USD both to a Citi bank in SG. This will allow me to easily transfer out the USD to my US Citi account to pay the IRS on a quarterly.

I'm hearing that I will still have to pay the IRS whiling living in SG quarterly, is that true or do I make a payment at the end of the year once I pay my SG tax payment too then subject the tax paid in SG to my US tax.. SG tax sounds easy but the US stuff is sounding to be difficult to keep up with.

Thank you!

User avatar
Strong Eagle
Moderator
Moderator
Posts: 11618
Joined: Sat, 10 Jul 2004 12:13 am
Answers: 9
Location: Off The Red Dot
Contact:

Re: Getting Paid in USD or Singapore Dollar?

Post by Strong Eagle » Thu, 14 Mar 2019 1:25 pm

just2019 wrote:I'm hearing that I will still have to pay the IRS whiling living in SG quarterly, is that true or do I make a payment at the end of the year once I pay my SG tax payment too then subject the tax paid in SG to my US tax.. SG tax sounds easy but the US stuff is sounding to be difficult to keep up with.

Thank you!
You may have to make quarterly estimated tax payments depending upon your circumstances.

If you Singapore earned income is equal to or less than the earned income exclusion, then you will owe no federal income tax on your Singapore earnings; hence, you would not need to worry about quarterly tax payments.

If you make more than the earned income exclusion then you owe tax on the amount above the exclusion at a rate as though the exclusion were not in place, ie, highest marginal tax rate. From this tax, you subtract Singapore tax paid on the same amount and this is your net earned income tax bill.

If it's around approximately a $1000 or so, then you won't need to make quarterly tax payments as they only kick in if you figure that you will owe more than $1000, AND, that federal withholding won't meet 90 percent of your tax obligation.

However, you must also take into account passive or unearned income such as interest, dividends, rents and such. These are also taxed at a rate as though the earned income exclusion were not in place, and again, the $1000 rule applies.

Bottom line: If you don't have passive income (or have relatively little of it) and your Singapore salary is somewhere around the earned income exclusion, then you won't incur enough income tax liability to have to make quarterly payments. If you have significant passive income subject to taxation, or you're making a really big honking salary, you'll want to make quarterly payments in the quarter that your passive/active income is paid. So, if you are getting a shitpot of dividend payments in the fourth quarter, you'd also make an estimated quarterly tax payment to cover those dividends.

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 40376
Joined: Thu, 11 Nov 2004 1:26 pm
Answers: 21
Location: Retired on the Little Red Dot

Re: Getting Paid in USD or Singapore Dollar?

Post by sundaymorningstaple » Thu, 14 Mar 2019 2:46 pm

And if anybody out there still does their own, other than myself, have a ball this year. I just finished up mine last evening and it takes 2x as long to do the same return and I got hit with an extra US$980 tax bill thanks to social security kicking in for the 1st full year (the year before was only 4 months) and MfS without any chillens in the house to bounce me into the HoH tax rates. CPF interest rates compounding isn't helping either! They have redone the whole 1040 and ancillary packages into a modular affair (so, as they claim, there will be less paperwork, but for us types, we still end up filling out (in my case) 5 of the 6 new Schedules 1-6). But the old forms are still there as well. Well and truly screwed this year (1st time I've been caught flatfooted with the IRS in the 54 years I've been filing). :-(
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

User avatar
Strong Eagle
Moderator
Moderator
Posts: 11618
Joined: Sat, 10 Jul 2004 12:13 am
Answers: 9
Location: Off The Red Dot
Contact:

Re: Getting Paid in USD or Singapore Dollar?

Post by Strong Eagle » Thu, 14 Mar 2019 8:10 pm

sundaymorningstaple wrote:And if anybody out there still does their own, other than myself, have a ball this year. I just finished up mine last evening and it takes 2x as long to do the same return and I got hit with an extra US$980 tax bill thanks to social security kicking in for the 1st full year (the year before was only 4 months) and MfS without any chillens in the house to bounce me into the HoH tax rates. CPF interest rates compounding isn't helping either! They have redone the whole 1040 and ancillary packages into a modular affair (so, as they claim, there will be less paperwork, but for us types, we still end up filling out (in my case) 5 of the 6 new Schedules 1-6). But the old forms are still there as well. Well and truly screwed this year (1st time I've been caught flatfooted with the IRS in the 54 years I've been filing). :-(
You can thank your good buddy for that!

Image

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 40376
Joined: Thu, 11 Nov 2004 1:26 pm
Answers: 21
Location: Retired on the Little Red Dot

Re: Getting Paid in USD or Singapore Dollar?

Post by sundaymorningstaple » Thu, 14 Mar 2019 8:16 pm

Actually, not. It was a case of purely my oversight on not allowing for the compounding interest of my CPF and primarily the 1st full year of drawing my social security both of which are taxed at the outside rates as neither of them are 'earned' income. Trump has SFA to do with it. Bzzzt! Fail. ;-)

Granted, the new forms are a mess, but that just entailed having to read the whole damned Pubs 17, 54, 501 & 915. bloody lot of reading for the little bit of changes (other than the forms and the Medicare tax - no impact there though).
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

User avatar
Strong Eagle
Moderator
Moderator
Posts: 11618
Joined: Sat, 10 Jul 2004 12:13 am
Answers: 9
Location: Off The Red Dot
Contact:

Re: Getting Paid in USD or Singapore Dollar?

Post by Strong Eagle » Thu, 14 Mar 2019 8:19 pm

SS as passive income... sounds about right... and with mandatory distributions, no fun at all.

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 40376
Joined: Thu, 11 Nov 2004 1:26 pm
Answers: 21
Location: Retired on the Little Red Dot

Re: Getting Paid in USD or Singapore Dollar?

Post by sundaymorningstaple » Thu, 14 Mar 2019 8:21 pm

Strong Eagle wrote:SS as passive income... sounds about right... and with mandatory distributions, no fun at all.
Tell me about it! (just glad I waited until 70 before starting to draw it.).
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

User avatar
PNGMK
Moderator
Moderator
Posts: 9076
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 10
Location: Sinkapore

Re: Getting Paid in USD or Singapore Dollar?

Post by PNGMK » Fri, 15 Mar 2019 3:04 pm

Maybank offer a USD current account that allows USD TT and bank draft deposits and withdrawals without a SGD forex translation. I know this as they have an AUD current account as well. Very handy if you don't want your foreign funds to go through an SGD conversion.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

ShwushennMak
Newbie
Newbie
Posts: 3
Joined: Thu, 14 Nov 2019 10:15 pm

Re: Getting Paid in USD or Singapore Dollar?

Post by ShwushennMak » Thu, 14 Nov 2019 10:31 pm

Dear all, thanks for sharing. It is really good information.

I would really like to seek your advice on my situation.
I am a singaporean and used to hold H1N visa and was getting paid via US system. Now, I am off H1B and back in Singapore working for the same company. They will be paying me via the singapore system beginning next year,2020 onwards . So I can I say that I am off the US system and won’t have to file for US taxes?
Since I will think I won’t get my W2 form.

Question #2- but I have stocks in US under my US account which I have been filing for taxes m. So I am wondering how does this work when my US employer doesn’t pay me through US system anymore and I am not holding H1B at this moment? Am I still consider a tax paying resident Ailen under IRS? I am quite confused.
If someone can offer me some advice it will be great or a direction for me to get help on this.

User avatar
PNGMK
Moderator
Moderator
Posts: 9076
Joined: Thu, 21 Mar 2013 9:06 pm
Answers: 10
Location: Sinkapore

Re: Getting Paid in USD or Singapore Dollar?

Post by PNGMK » Fri, 15 Nov 2019 9:22 am

1. Correct - no more US tax obligation on income. Make sure you file for the last year you earn income in the US tho.
2. You'll end up paying withholding taxes on the dividends (30%) and have to file a W-8BEN to reduce or register for this. As Sing / USA have a dual taxation treaty it may be worth looking at that. You are no longer resident and should use the W-8BEN I believe.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

ShwushennMak
Newbie
Newbie
Posts: 3
Joined: Thu, 14 Nov 2019 10:15 pm

Re: Getting Paid in USD or Singapore Dollar?

Post by ShwushennMak » Sat, 16 Nov 2019 6:20 am

Thanks for your reply.

Can I continue to file US taxes for the stocks instead of paying 30%?
How about the stocks in Roth IRA?

Post Reply
  • Similar Topics
    Replies
    Views
    Last post

Return to “Careers & Jobs in Singapore”

Who is online

Users browsing this forum: No registered users and 7 guests