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Rent and school fees included in salary?

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zaarahary
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Rent and school fees included in salary?

Post by zaarahary » Wed, 30 Dec 2020 7:12 pm

Possible that the company offers a salary inclusive of rental and school fees? What are the advantages or disadvantages, I just think it's rare?

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PNGMK
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Re: Rent and school fees included in salary?

Post by PNGMK » Thu, 31 Dec 2020 8:47 am

It's common for true expats who are here normally for a few years at most (as well as diplomats etc). However most expats are now "localized" meaning that they get a salary and are expected to cover all local costs out of it.

My employer pushes expats onto local deals now if they are here for more than 2 - 3 years. IT can be painful for some but others see it as a way of investing and integrating into Singapore.

True expats would expect much more to be covered including but not limited to free club membership, maids provided, car for both husband and wife (with driver), gardener, bungalow level housing, a governess for their kids if needed, free flights home once a year, free phones, a booze and entertainment allowance, pension fund contributions, income tax paid etc. You may laugh but there are some CEO's and diplomats who still live at that level. (Oh I forgot to include on site security in the case of diplomats).

The advantage is obviously a cost saving. The disadvantage is that is can be snatched away from you in an instant. As a localized expat I've seen many overpaid, overfed and oversexed expats over here sent back with a days notice while I just continue on in my crappy condo with an ancient car and no maid with my kids going to a local school or poly while I accumulate savings and CPF. (I do get a free phone and car allowance though).

It's a classic risk vs reward scenario.
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malcontent
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Re: Rent and school fees included in salary?

Post by malcontent » Fri, 01 Jan 2021 1:08 am

zaarahary wrote:
Wed, 30 Dec 2020 7:12 pm
Possible that the company offers a salary inclusive of rental and school fees? What are the advantages or disadvantages, I just think it's rare?
Understand that expat packages are for those who are sent here against their will... even if they don’t mind coming — it is the company who needs them here. Usually they are sent from the head office of a major multinational company in a first world country. The purpose of an expat package is to at least “keep the employee whole” in terms of the lifestyle they were able to enjoy back home. This is both out of fairness and as an incentive to take a job in a distant land, far from family and friends.

My company used to have a watered down quasi-expat package, it was selectively offered to promising foreign employees hired locally or regionally in areas of acute business need. That included some basic housing & educational support, but that was phased out years ago. Nowadays such packages are about as easy to find as hen’s teeth.

Sometimes you just have to vote with your feet and leave if the remuneration is insufficient to sustain a reasonable existence here, and housing and schooling are often key to that.

Myasis Dragon
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Re: Rent and school fees included in salary?

Post by Myasis Dragon » Fri, 01 Jan 2021 3:12 am

zaarahary wrote:
Wed, 30 Dec 2020 7:12 pm
Possible that the company offers a salary inclusive of rental and school fees? What are the advantages or disadvantages, I just think it's rare?
It doesn't matter, for income tax purposes whether you receive a salary of X dollars, school allowance of Y dollars, and housing allowance of Z dollars; or if you simply receive a total salary of X+Y+Z dollars. You will be taxed the same way by Singapore IRAS because virtually all allowances that an expat might receive (including club fees) are simply treated as taxable income.

There is one exception to this rule, and that is if your company supplies you with housing, that is, your company rents the house and lets you live in it. Then there is some tax advantage as to the amount of rental you must declare as income.

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PNGMK
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Re: Rent and school fees included in salary?

Post by PNGMK » Fri, 01 Jan 2021 8:48 pm

MD - correct but OP should be aware that these arrangements are important for country of origin tax - I'm thinking of Americans in particular. You would want as many benefits provided as possible as an American and minimum cash if the company doesn't have you on a hypo tax arrangement.
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!

Myasis Dragon
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Re: Rent and school fees included in salary?

Post by Myasis Dragon » Sat, 02 Jan 2021 6:52 am

PNGMK wrote:
Fri, 01 Jan 2021 8:48 pm
MD - correct but OP should be aware that these arrangements are important for country of origin tax - I'm thinking of Americans in particular. You would want as many benefits provided as possible as an American and minimum cash if the company doesn't have you on a hypo tax arrangement.
That is true. For the USA, all allowances are treated as earned income so it doesn't matter which way you are paid.

Cost of living
Overseas differential
Family
Education
Home leave
Quarters
Moving (unless excluded from income)

https://www.irs.gov/individuals/interna ... ned-income

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PNGMK
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Re: Rent and school fees included in salary?

Post by PNGMK » Sat, 02 Jan 2021 5:16 pm

Myasis Dragon wrote:
Sat, 02 Jan 2021 6:52 am
PNGMK wrote:
Fri, 01 Jan 2021 8:48 pm
MD - correct but OP should be aware that these arrangements are important for country of origin tax - I'm thinking of Americans in particular. You would want as many benefits provided as possible as an American and minimum cash if the company doesn't have you on a hypo tax arrangement.
That is true. For the USA, all allowances are treated as earned income so it doesn't matter which way you are paid.

Cost of living
Overseas differential
Family
Education
Home leave
Quarters
Moving (unless excluded from income)

https://www.irs.gov/individuals/interna ... ned-income
Hypo tax fixes this - many American and Euro expats in the OnG industry are on a hypo tax system of 15% or so where the company bears all their incomes tax cost (both home and abroad) for a charge of a flat 15% of their income.
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!

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