My Expat Package for Singapore in detail - Should I take it?

[BudoMan]

Greetings,

Due to some recent changes in our company, and a rapid expansion plan into the Singapore and regional markets, I've been offered a base package as follows: (all in SING$)

Salary: $11,500/mth
Variable bonus: $3,000-5,000/mth
Housing allowance: $6000/mth
Home Leave allowance: For ONE roundtrip per year to our home country for family of 4 (economy class)

* Intl School Tuition: Not an allowance -- paid from salary directly by company to school, to reduce personal tax burden


Other:

- I am thinking about adding an allowance for car lease to the package (i.e. $1,000-1,500/mth)

NOTE:
* all of above is in line with my current comp package
* we expect to be in SING for 2 years+

Questions:

1. Is the base salary package as above reasonable for a Director level role in Singapore? i.e. quality of life.

2. Is the housing allowance reasonable for a nice (= safe, clean, spacious) 3-4 bedroom apartment / condo?

3. Is it necessary to have a car, if yes is the lease allowance reasonable at 1,000-1,5000k/mth?

4. Is there anything else which you would recommend I add to the table for this package? (am I missing something important?)


I hope this is enough information. Really appreciate advice and insight from those on the ground. Thank you!

[sundaymorningstaple]

Greetings,

Due to some recent changes in our company, and a rapid expansion plan into the Singapore and regional markets, I've been offered a base package as follows: (all in SING$)

Salary: $11,500/mth
Variable bonus: $3,000-5,000/mth
Housing allowance: $6000/mth
Home Leave allowance: For ONE roundtrip per year to our home country for family of 4 (economy class)

* Intl School Tuition: Not an allowance -- paid from salary directly by company to school, to reduce personal tax burden


Other:

- I am thinking about adding an allowance for car lease to the package (i.e. $1,000-1,500/mth)

NOTE:
* all of above is in line with my current comp package
* we expect to be in SING for 2 years+

Questions:

1. Is the base salary package as above reasonable for a Director level role in Singapore? i.e. quality of life.

Yes

2. Is the housing allowance reasonable for a nice (= safe, clean, spacious) 3-4 bedroom apartment / condo?

Yes

3. Is it necessary to have a car, if yes is the lease allowance reasonable at 1,000-1,5000k/mth?

No. But at Director level, probably yes for nothing more than position. Also depends on the ages of the kids and whether they are old enough to travel by themselves. Cost probably would be nearer to 1,500-2000 though, depending on the size of the car

4. Is there anything else which you would recommend I add to the table for this package? (am I missing something important?)

Medical Insurance. Medivac insurance?


I hope this is enough information. Really appreciate advice and insight from those on the ground. Thank you!

sms

There will be others along with differing viewpoints as well - all valid.

[Strong Eagle]

I agree with SMS on all points. It's a good package and in the range of director level positions in MNC's in Singapore, ie, senior management positions.

[BillyB]

It's a good all round package. For a director - the base is a bit on the low side in my opinion - but I think the housing allowance and variable bonus make up for that.

I have no idea of the costs of schooling so that could eat into your salary somewhat. I'd be wary of that as schooling is expensive out here and could leave you pretty short of disposable after all fee's are paid.

And if the company is willing to throw benefits at you - then obviously look to include a good car allowance (around $1.5-3k should get something decent) and also comprehensive health insurance for you and the family (If it includes all aspects like dental and all outpatient care, as well as basic emergency cover, it could easily be upwards of $3-4k per year).

Personally, I'd have another round of negotiations and support your case with factual information and some quotes.

[scarbowl]

Assume S$25,000 for each child enrolled in an International School. The tax rate of appx. 15% is applied to all payments including housing. However, it seems that payments on your behalf are taxed on only 20% of the gross (such as school fees). The net effect is a lower tax rate - as you noted.

I'd say $11,500 sounds low for a company director. The housing is high - perhaps they'll allow you to keep the difference? You could find housing for 4 for around $4,000/month plus another $500 for utilities (if you are careful).

A car for $1,500 per month? Maybe one that is 3-5 years old. And then there are road taxes, petrol is high, parking fees, etc.

You won't live particularly well on this package but you can get by.

[BudoMan]

Assume S$25,000 for each child enrolled in an International School. The tax rate of appx. 15% is applied to all payments including housing. However, it seems that payments on your behalf are taxed on only 20% of the gross (such as school fees). The net effect is a lower tax rate - as you noted.

I'd say $11,500 sounds low for a company director. The housing is high - perhaps they'll allow you to keep the difference? You could find housing for 4 for around $4,000/month plus another $500 for utilities (if you are careful).

This is great advice. We are set to make a trip to Singapore in the next 2 weeks and will look at a range of housing in the $4,000-5,000/mth zone and adjust allowances accordingly.


A car for $1,500 per month? Maybe one that is 3-5 years old. And then there are road taxes, petrol is high, parking fees, etc.

I have heard differing opinions about the need and costs for a car. Some have indicated that if we live near the MRT/LRT a car may not be worth the cost and trouble?


You won't live particularly well on this package but you can get by.

Lots of very helpful feedback here in this forum. We will put medical insurance on the list. Someone also recommended membership at the American Club. Is this worth considering?

For benchmarking purposes, what would a "good" to "very good" package look like compared to what I've outlined?

Unlike most large multinational companies with significant experience on relocation and crafting expat packages, this is my company's (a.k.a. HR dept) first experience. Therefore, there are no internal benchmarks (other than the Mercer index) to guide us.

Your feedback is valuable! Thanks again.

[Strong Eagle]

You won't live particularly well on this package but you can get by.

I judge this to be nonsense. Adding up the numbers, he is going to be paid at least $20,500 per month, plus, school tuition picked up directly by company. That is S$246,000 per year plus education perks.

At $240K per year you can live well, very well. Don't know where you got this off the wall judgment and it is thoroughly incorrect.

Fact of the matter is that this is a higher end package. Not many get over $200K per year.

[JonOfArimathea]

Looks pretty good. That said, 'director' level can mean a lot of different things. Also depends on the size / profitability of the company, and the specialisation of the role.

Insurance (medical, travel, life etc.) would be worth looking into and also relocation expenses (both there and back) - and especially what is included in the relocation, i.e. temporary storage, temporary accomodation while you find somewhere, etc.

If your job involves travel outside of Singapore are you going to have all costs related to this expensible?

[HOD]

looks very low. Poster says school will be taken directly out of salary. Not paid for by company. You dont say how old your kids are? Four kids at SAS will cost you 100k. There goes most of your salary

[DanielR]

Thank you for the detailed information, you have also helped me. I am in a similar situation where my company is est. through acquisition office in Singapore and HK and I am in the mix to relocate to Singapore with my family for 3 plus years as Regional General Manager.

So thanks again and if I have any questions will post.

[Girl_Next_Door]

You should clarify on the housing allowance, if you are required to place the deposit or the company will place the deposit.

Assuming you are paying the deposit on your own, that's easily $12K (assuming you are taking 2 years lease, you need to place 2 months deposit) out of your own pocket. When you leave the country, there is also the possibility of the landlord delaying the return of your deposit. If you are not in Singapore, it make the follow-up on the deposit refund a lot more challenging.

If the company is paying for the deposit, all these hassle will be taken care of. Nowadays, many companies are not to keen to place the housing deposit as they are wary of crafty landlords. Just make sure that it is explicitly stated in the contract. Whatever is not stated, is not included.

[Yeboah]

Some good advice on here. I'm currently negotiating a relocation package with my firm to be seconded to Sing in a trader/dealer capacity so can empathise with you. My tuppence worth would be to treat the Mercer figures with a large dose of salt. My firm has all but admitted that they are unreliable at best and have in the past been prone to underestimating equivalent salaries. Be aware of the cost of everything before you sign. In this regard a reconnaisance trip is of the utmost importance. I will be doing exactly such a trip in about a month's time.

[BudoMan]

looks very low. Poster says school will be taken directly out of salary. Not paid for by company. You dont say how old your kids are? Four kids at SAS will cost you 100k. There goes most of your salary

Apologies, I didn't mention that we have two elementary aged kids who will attend one of the int'l schools. It is correct that I will pay the int'l school fees out of pocket but this portion will be pulled off the monthly salary & paid directly to the school to reduce personal tax.

It's interesting to note that there is a clear difference of opinion on whether this proposed package is reasonable or not. We learn as we go.

As for schools, our kids need to stay in the IB program so we are looking at CIS, UWC and Overseas Family School. We are off to Singapore next week to see schools and homes. As per advice here, we aim to choose the school first and decide on the home/location next.
Any thoughts on the best combo -- i.e. School X + home in Location Y?

The advice here has been extremely helpful so far. Thanks very much to all for your support. It would be great to meet some of you in person when we arrive.

[manutdfan]

[quote="BudoMan"]

Apologies, I didn't mention that we have two elementary aged kids who will attend one of the int'l schools. It is correct that I will pay the int'l school fees out of pocket but this portion will be pulled off the monthly salary & paid directly to the school to reduce personal tax.



You're not going to save that much by doing this - assuming that IRAS don't see the school fees as a taxable BiK anyway.

At 11,500 a month your marginal rate at that level will be 15% (and less if the effect of school fees is to take the monthly payments down to below 10,000 a month).

I'm not saying it's negligable, but given that the income tax rate alone in the UK at that level is 40%, it could be a lot less of a win than you think it is.

[BillyB]

Apologies, I didn't mention that we have two elementary aged kids who will attend one of the int'l schools. It is correct that I will pay the int'l school fees out of pocket but this portion will be pulled off the monthly salary & paid directly to the school to reduce personal tax.



You're not going to save that much by doing this - assuming that IRAS don't see the school fees as a taxable BiK anyway.

At 11,500 a month your marginal rate at that level will be 15% (and less if the effect of school fees is to take the monthly payments down to below 10,000 a month).

I'm not saying it's negligable, but given that the income tax rate alone in the UK at that level is 40%, it could be a lot less of a win than you think it is.

Depends how the package is structured:

On base only - tax will be around 9%
On base and housing (If combined for tax purposes) - tax will be around 12%
On base, housing and bonus ( depending on structure ) - tax will be around 12.5%

But I agree - school fee's do eat into the disposable quite significantly. Depends on the position the OP is in and ghow much the company need him out here. Supply and demand and all that. I'd get back to the table and thrash out more negotiations!!