CPF for Singapore non-resident

[hotdarod]

Hello people of Singapore!

Just got a transfer offer from the US to Singapore within a Big 4 company. Pretty excited bout this prospect, but we're still working through the numbers and transfer package. Nonetheless, I would like to seek some advice/help on my company's CPF match offer.

Since i'll be a 1st year non-resident in this case (if i accept the transfer), they are offering me S $653 per month as the CPF match that will be given directly to me (since I cant contribute to the fund until I get my SG PR).

Well, with that being said, is that a good deal? And what are the implications down the road once I obtain my SG PR? Should I get something in writing in my offer letter that lists the % of CPF contribution by yearly tears as a PR?

Any advice or clarification on this matter would definitely help immensely.

Mucho gracias ahead of time!

[sundaymorningstaple]

The offer is valid and no need to worry about it being in your contract. The CPF match is still taxable to you as long as you are not a PR so in a manner of speaking you will pay a little more income taxes on it. But, once you become a PR (IF you become a PR - it's no longer a guarantee OR a right - but entirely discretionary on the part of the Government once you apply for it) you will not be taxed on the contributions. (The employers portion of the CPF contributions is 14.5%)

As far as the dollar match is concerned that is accurate two within 50 cents. The CPF contributions are capped on a maximum of $4500/month of which the full rate is 34.5% (20% employee deduction and 14.5% employer contribution). So beware that when you take up PR you will lose 1/3rd of your disposable income (actually the rates are graduated the first two years that you have PR to ease you into the loss of disposable income gradually. Normally one only feels the 20% chop but seeing the Employer is putting the Employers rate into the package with the specific of equalization, you will feel it even more (unless you automatically save that amount monthly).

Go here for further reading: http://mycpf.cpf.gov.sg/Members/Gen-Inf ... n-info.htm

sms

[intelliice]

hello sundaymorningstaple,

"So beware that when you take up PR you will lose 1/3rd of your disposable income (actually the rates are graduated the first two years that you have PR to ease you into the loss of disposable income gradually. Normally one only feels the 20% chop but seeing the Employer is putting the Employers rate into the package with the specific of equalization, you will feel it even more (unless you automatically save that amount monthly). "

Please can you dig a bit deeper on the above comment. Does that 1/3rd portion apply on the CPF portion? or is that for the entire salary? It would be best if you can elaborate on this with an example.

Thanks in anticipation!

[sundaymorningstaple]

If you read my post closely you would had undoubtedly noticed that I said CPF contributions were capped on $4500/mo. If you were offered a base of $4500 a month plus equalization then with the CPF contributions being 34/5% you would lose a third. But like anything else, the higher you go above a capped tax the smaller your loss would be. If you were earning over 9K/mo then it would only be a reduction of around half of that amount if the contribution is capped on $4500/mo. Sorry. I assumed there was some reasoning power. Especially as I even gave you the CPF link as well.

[intelliice]

"I assumed there was some reasoning power." - the assumption is fine as long as you promise to work on the twisted language skills ! BTW, it is easier to reason with the background knowledge in the brain buffers.

Cheers!