tax for EP holder

[kuabengguan]

Hi there,

If I am an EP holder, do I get taxed 15% on my monthly income and bonus based on the website of IRAS?

What would be the tax percentage like for salary income of 4.5k - 5.0k/month for EP holder and resident?

[BillyB]

Check the IRAS website more thoroughly. If you have been residing in SG for more than 183 days since your EP was granted you will be taxed as per a local resident.

There is a calculator on the site that will work out exactly what your tax will be for 2010.

http://www.iras.gov.sg/irasHome/page.as ... 0#resident

[sundaymorningstaple]

Slight correction. 183 days since your arrival in Singapore, not from date of receiving your EP. You may well have been here 90 days prior to finding a job and getting your EP. If so, it counts towards the 183 day residency requirement.

[sundaymorningstaple]

Further information:

If you are here on an EP and you are short of being here 183 days for the first year, no worries on the 15% flat tax rate. As long as your EP is for at least 12 months, then IRAS will automatically tax you at full resident rates and not the higher 15% rate.

You are also allowed to stretch the 183 day period across two tax years (consecutive days) in order to meet the residency requirements. If you don't make it and get retrenched after filing your return, you will need to file an amended return at pay at the 15% flat rate, so don't screw up your job!

[BillyB]

Ahh, I never knew that. Thanks SMS. That will save me a few dollars when my GF gets her tax bill next month!! I thought she was going to get stung by the 15% rate and I would have to pay the bill being the nice person I am, but given it is calculated from when she arrived I'll tell her to raid the penny jar instead.

How does entering and exiting SG before starting work affect the 'official' date of arrival? Because she isn't on anything official like the tenancy agreement etc, how do you deem your exact arrival date for tax purposes?

[sundaymorningstaple]

She can come and goes as much as she want as long as the EP is valid. Time outside of Singapore BEFORE granting of the EP doesn't count towards the 183 days, but all time from the granting of the EP does as long as the EP is valid.

Passport stamps will show periods of residency in Singapore if necessary in an audit situation.

[ecureilx]

Sorry to barge in but ... IRAS can make some mistakes

I disputed the Tax once, as for that year, I had taken a break, and was in Singapore for less than 45 days for that calender year, and I disputed their calculation. But, since I was continuing my employment I was told "our decision is final - please pay up or face the consequences"

Of course, the next year, Great IRAS offset the amount they had charged me wrongly and I got a lower tax assesment and the note was something like "payment received in advance" or something and the sum outstanding too was discounted as goodwill waiver (no clue what goodwill I earned)

Unless you are earning in 7 figure salary, you will loose as you are not gonna engage a tax consultant to fight it out ..

Meantime, a little note: when you leave your job, the employer tries to hold back your last month pay to offset the tax, when you got clearence - you can get IRAS to advice the employer to release the pay, if you are continuing employment here and as such, the employer is not held liable if you scoot off with outstanding taxes Been there, done that 3 times and it worked .. especially when I had an employer who insisted on holding last 2 month pay to offset tax until I get the clearence ..

PS: My father is a CA, and he advised me to write to IRAS and worded the letter accordingly - still the response from IRAS was as I mentioned before ..

[BillyB]

Sorry to barge in but ... IRAS can make some mistakes

I disputed the Tax once, as for that year, I had taken a break, and was in Singapore for less than 45 days for that calender year, and I disputed their calculation. But, since I was continuing my employment I was told "our decision is final - please pay up or face the consequences"

Of course, the next year, Great IRAS offset the amount they had charged me wrongly and I got a lower tax assesment and the note was something like "payment received in advance" or something and the sum outstanding too was discounted as goodwill waiver (no clue what goodwill I earned)

Unless you are earning in 7 figure salary, you will loose as you are not gonna engage a tax consultant to fight it out ..

Meantime, a little note: when you leave your job, the employer tries to hold back your last month pay to offset the tax, when you got clearence - you can get IRAS to advice the employer to release the pay, if you are continuing employment here and as such, the employer is not held liable if you scoot off with outstanding taxes Been there, done that 3 times and it worked .. especially when I had an employer who insisted on holding last 2 month pay to offset tax until I get the clearence ..

PS: My father is a CA, and he advised me to write to IRAS and worded the letter accordingly - still the response from IRAS was as I mentioned before ..

Agree that the process is flawed of gaining tax clearance for us non-P.R's or Non-Citizens. I changed jobs recently and even though I have an employment contract and am a PEP holder and am obviously remaining in SG to work, the IRAS still insisted on an IR21 form. Which means my last employer withheld my final salary and have been for over 6 weeks until IRAS send the paperwork out stating the final amount. Although this is partly due to my previous employer being a complete ar*ehole and not submitting the IR21 form until 3 weeks after I left!!
I have been told I can claim the tax back but it will take 4 weeks, and then my tax filing will be due anyway so its not worth the hassle!!

[sundaymorningstaple]

The process is rather simple and effective and makes sense as well if you think about it objectively. Of course, the employer stands a chance of being fined if he doesn't timely file the IR-21 (Tax Clearance). But IRAS is quite open in their requirements in that the foreign employee is required to give a month's notice and the employer is required to immediately figure out the final month's salary and submit the IR-21 at least 30 days before the last day of employment. (They can be fined up to $1000/instance). If they file online it will only take around 7-9 days to have the tax computation back from IRAS. However, if they file it manually, it can take 4 weeks. IRAS says, by law, the employer MUST withhold ALL MONIES at the point that notice is given to them. So, in order to get around that, if you salary is GIRO'd to your account, make sure that you give notice the day your salary is paid into your account. That way you only have one month's salary on hold. Otherwise, the employer is compelled to withhold both cheques. Even on the IR-21 it asked for day of last payroll, date of resignation, and length of notice so you cannot fudge it.

The fact that you are on a PEP doesn't hold any water as there have been runners will all kinds of Passes here. Especially those who have racked up large debts here like CC's and such. You cannot blame the government for trying to keep what is rightfully theirs. If somebody exploits a loophole, they make it rough of the followers later.

Edited to change salaries to monies as the IR-21 also asks if there is any other monies that can be withheld as well. Thanks for touching on that point ecureilx!

[BillyB]

I get your points, but i'm an honest sort of chap!!

Of course the process makes sense if the employer follows the rules and files correctly, then the risk of delay of payments is minimised and everyone is happy. I hope that IRAS fine my old employer because the logic behind the delay on the payments is to try to restrict me from moving elsewhere - they wouldn't even write me a release letter or email. They think that because they didn't file the IR21 that I couldn't go and work elsewhere, and they dragged their feet on cancelling my EP.

But I appreciate your points about people exploiting the system and running off with debts left behind.

[ecureilx]

I get your points, but i'm an honest sort of chap!!

If so - me is 100X honest ha ha .. yes, but that doesn't sell ..

Of course the process makes sense if the employer follows the rules and files correctly, then the risk of delay of payments is minimised and everyone is happy.

Companies have processes and systems in place, and the bigger the company, the stricter they are in their process. I know a guy, who resigned, was told his last half month pay will be held, and then HR asked him if he want to cash his annual leave, and in lieu they held back his 1.5 month pay as their system is rigid that they don't have a backup to release a 'reasonable' figure. His argument that the 5 days cashed is not reason to hold a one month + half month pay held no water - after all, their system was not to compute how much to hold back, but to hold back the last month ..

I hope that IRAS fine my old employer because the logic behind the delay on the payments is to try to restrict me from moving elsewhere - they wouldn't even write me a release letter or email. They think that because they didn't file the IR21 that I couldn't go and work elsewhere, and they dragged their feet on cancelling my EP.

Not so sure that you have so much scorn on your employer - as long as you submitted the letter of resignation, and the employer accepted, if they drag their leg, go to IRAS, and speak to them, so they will talk to the employer - but - no: they will not fine the employer. And what gives you have to get your tax clearence before working anywhere ?? Damn - you are freaking me out - or you are scary ..

[BillyB]

I get your points, but i'm an honest sort of chap!!

If so - me is 100X honest ha ha .. yes, but that doesn't sell ..

Of course the process makes sense if the employer follows the rules and files correctly, then the risk of delay of payments is minimised and everyone is happy.

Companies have processes and systems in place, and the bigger the company, the stricter they are in their process. I know a guy, who resigned, was told his last half month pay will be held, and then HR asked him if he want to cash his annual leave, and in lieu they held back his 1.5 month pay as their system is rigid that they don't have a backup to release a 'reasonable' figure. His argument that the 5 days cashed is not reason to hold a one month + half month pay held no water - after all, their system was not to compute how much to hold back, but to hold back the last month ..

I hope that IRAS fine my old employer because the logic behind the delay on the payments is to try to restrict me from moving elsewhere - they wouldn't even write me a release letter or email. They think that because they didn't file the IR21 that I couldn't go and work elsewhere, and they dragged their feet on cancelling my EP.

Not so sure that you have so much scorn on your employer - as long as you submitted the letter of resignation, and the employer accepted, if they drag their leg, go to IRAS, and speak to them, so they will talk to the employer - but - no: they will not fine the employer. And what gives you have to get your tax clearence before working anywhere ?? Damn - you are freaking me out - or you are scary ..

I'm scary and bitter because I've never worked for an employer who doesn't pay me on time, changes the bonus structure when it suits them and after, rescinds on annual leave, doesn't provide medical insurance when they agreed to in the contract, won't cancel my EP so thus not allowing me to activate my PEP, and then won't conduct the formalities of an employee leaving in a professional way.

I think plenty of people would have lost the plot long before me............but if you are different then perhaps you would like to apply for the open position!

[ecureilx]

I'm scary and bitter because I've never worked for an employer who doesn't pay me on time, changes the bonus structure when it suits them and after, rescinds on annual leave, doesn't provide medical insurance when they agreed to in the contract, won't cancel my EP so thus not allowing me to activate my PEP, and then won't conduct the formalities of an employee leaving in a professional way.

I think plenty of people would have lost the plot long before me............but if you are different then perhaps you would like to apply for the open position!

Well, now I lost the plot as I don't know how your response jives with what I wrote - atleast since you quoted me ..

If you say "NEVER" then why in the world are you complaining about your employer ?? Que Pasa ?? Sorry - me blur blur.

over and out - Coat, Hat, Umbrella ..

[BillyB]

Let's end this conversation before one of us realises (probably me) that we will never get this time back, having spent probably over an hour of our lives on useless and pointless exchanges that have totally detracted from the original post!

[ecureilx]

Aye Aye sir ...

Je suis confus