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Employer converting my UK £ pay

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chromesmic
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Employer converting my UK £ pay

Post by chromesmic » Sat, 10 Jan 2009 11:20 pm

Hi

This site is fantastic, I have only just found out that I have been accepted for a role in Singapore and am looking forward to it so much more after spending most of yesterday's evening on this forum.

I have taken a lot of time to look for a similar query to mine but cannot find one. My potential employer is going to convert my salary to SGD and then just pay me the equivalent so the theory is that I will not lose out on my UK salary but will not gain the benefits of the exchange rate.

Is this normal practice? I really was hoping to gain with the exchange rate approx 2-1.

My salary is going to be £65,000 pounds - if they use this formula will it be a comparative living to the UK?

Would love to hear any advice on this and any other UK expats so as I can help to negotiate my relocation benefits.

many thanks in advance.

m

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durain
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Post by durain » Sun, 11 Jan 2009 1:24 am

this is where you got to decide yourself if you are getting a good deal because no one will know what's the fx will be in the long run. it's a bit of a gamble, you could gain or you could lose.

6 months ago, the rate was SGD2.85 to 1GBP and now it is SGD2.25 to GBP1. the lowest was SGD2.11.

generally, the cost of living in singapore will be cheaper than UK. for 65k, you should be OK.

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ksl
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Post by ksl » Sun, 11 Jan 2009 4:29 am

I would say your company is edging its bet, so they do not lose out, because it doesn't want to over pay you in a recession. It used to be 3$ a year ago and now 2.25.

I have seen guys on 150k, at a 3 to 1 exchange, 145k is good under the economic circumstances.

My bet is you will benefit anyway, because the UK is in dire straights along with the US, if they are both not bankrupt, then I'll be very surprised.
We are looking at the UK which is no longer an industrial Country, throw in a couple of wars, and dads your uncle, the USA too, is in enormous trouble. 145K is a lot of money, you will adapt to a good life style. With Singapore quality of life at number 11 and the UK at 29.

What will happen in the coming months is anyone's guess, but i would rather be in Singapore on that income, than be in the UK. I expect the £ & $ to suffer much more this year, don't you?

chromesmic
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Post by chromesmic » Sun, 11 Jan 2009 6:06 am

Thank-you both for taking the time to respond. My employer has sent me this through, I would appreciate your thoughts on it if you have the time.

Salary Comparison:
The current exchange rate is £1 =$2.20

Here is a sample comparison of how much a salary in the UK equates to in Singapore.

* UK tax rate is about 27.5% so if your gross salary in UK is £40k, net salary is £29k.

*Singapore tax rate starts from 3.5% and the highest is at 20% so if your gross pay in Singapore is $88k ($40k), net salary is $81.7k (37k)

*This means that a £40k gross pay in UK is equivalent to almost £53k in Singapore.

Personal income tax in Singapore is significantly lower than in the UK. It is lower by about 12% at an average. That is why even though your salary in Singapore is lower that your pay in London, your spending power is still higher.

My query/worry with this is I don't really want to spend all of my salary in Singapore, I will have a mortgage still to take care off in the UK. Maybe I have not worked it out properly but i got the impression they were wanting to pay me less based on the benefit of the spending power in Singapore.

Maybe it is the exchange rate I just need to watch what that is set out for the conversion does that ever keep to a formula or is it simply converted at what it is at the time? Can this be reviewed on yearly basis for example.

Once again thanks in advance for any help you could give me.

Kind Regards

jfd
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Post by jfd » Sun, 11 Jan 2009 10:03 am

While it is true that the exchange rate is down compared to what it has been in the past, if you are getting your UK salary converted straight to S$, then you are lucky!

Normally cost of living and tax rates are taken into consideration when moving to another country, so, if your UK salary is £65k, then your Sing salary is about S$145k. If they did take into account cost of living and tax rates, then you would surely be getting less than S$145k.

I assume they will be paying you actually in S$ rather than £? That being the case, you will just have to do regular conversions back so that your mortgage can be covered.

As for a potential yearly review based on FX moves, this is certainly not a normal thing. Once you move, that is it. Further reviews would normally be solely based on job/role changes and performance reviews.

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