Another Expat Package Question

[Brooklynjenn]

I searched and looked at the stickies, and didn't find the information for which I'm looking. Mostly the questions are about mid-level packages and we are in a different situation. Our situation may make some eyes roll, I've seen some hostile responses, but I honestly need advice about what we need to request in our package. I have heard that packages have changed just in the last five years, so I'm hoping to find some current information.

My husband is being approached about moving to Singapore by his current company. He will have a sizable roll at a technology company. He will be reporting to the CFO of the company, who has temporarily taken over the role as Head of Asia. Right now he is two down from the CEO, in a company with around 10,000 employees worldwide. We live in one of the more expensive cities in the US, in the Bay Area. We have a three and five year old.

Our current pay is around 250k or slightly more depending on bonuses. We spend around 4500 on housing, although with the addition of our kids our two bedroom house is too small. We need at least three bedrooms. What would a comparable salary be taking into account cost of living in Singapore?

We would probably lean toward the Orchard area so my husband doesn't have to commute far. Will we even need or want a car, and if so, is that something they typically cover at this level? How much would we need in housing? Is a housing allowance still something that would be covered? How much are executives typically given? Do they cover dues at clubs like the American club if we would be expected to entertain execs from other companies and regions? Is there anything else we should take into consideration?

I know to ask for school tuition and global health insurance. They don't send many people over on a package at his company, so this is all new for both sides of the equation. I want to make sure we don't lose out financially by taking this opportunity.

Thanks for your advice in advance!

[carteki]

$250k - thats a tough life

Sorry, but the average salary in Singapore is way way way lower than that (and that is for the average person on this board too).

So, you don't want to lose any money, but then again you will be exposed to a completely new culture (that is going to be become world dominant soon), meet new people, make new connections. Not everything is about money.

This is NOT a hardship posting. Local exec's make a good deal of money (and a comfortable salary to live on too). Perhaps you should be satisfied with a local-equivalent pay excluding all the additional extras. Remember that the tax rate here is 15% (although you will still have to pay state-side taxes) so there is some merit in taking a bit of a pay cut.

[Brooklynjenn]

Look, I'm trying to do the right thing by my family and that includes making sure our needs are met. We do not live an extravagant life. We have a 2 bedroom cottage, 1200 sq feet, in a good school district. We drive old cars. I wear clothes from Costco. We have only basic cable. After taxes and on one income it doesn't go as far as you would think. This is why I feel it is important to get a feel for what we will need so our expenses don't take us by surprise. Do people living near Orchard have or need cars? Where might we drive? I have two small children who can sit down and refuse to walk at the most inopportune times. How expensive are taxis? New York prices? San Francisco prices? London prices? Is the cost of living similar to New York City? London? Hong Kong? I am looking for a frame of reference.

[Strong Eagle]

Sorry, but the average salary in Singapore is way way way lower than that (and that is for the average person on this board too).

Well, the average salary may be lower than that but for the position stated, within an MNC, while possibly a bit high is not an unrealistic number at all. Somebody is living in the $8,000 and up housing, and it isn't the people with average salaries but the people with above average salaries.

[Strong Eagle]

My view is that you need to look at this from a couple of perspectives. You do need to consider how long you will be here as well.

First, it would be unwise to set yourself up with a package such that, if you were to return to the US, you'd be making less money than before you left. Thus, at today's exchange rates, you'd need to ask for S$310,000 as an equivalent salary.

In terms of housing, Singapore puts even the bay area to shame with high housing prices. Your USD 4500 house equates to SGD 5500, and for that you can get a nice condo, away from town. For a landed property (semi-detached), look at SGD 7000 and up. So, you might want to add a housing allowance onto the base salary, although much lower tax rates than the federal rate and no CA taxes will offset quite a bit of that.

Cars are very expensive and although you can get around quite well without one, it's impossible to get a taxi in the rain, it is difficult to do a lot of place to place errands, and kids just make it more complicated.

If you do buy a car consider: A new car automatically has a 140 percent registration fee added to it. So your SDG 100,000 (yes, cars are more expensive as well) will cost SGD 240,000 to put on the road. Then you have to purchase a certificate to actually drive it, currently around SGD 40,000, for a total of $280,000 for that $100,000 car. So, you might ask for a one off moving allowance for a car.

Speaking of which, you should figure out how much they will give you to move, which should include breakdown and setup on the other end.

You don't say how old your kids are but International Schools are not cheap... about SGD 30,000 per kid. So maybe you need to add in a school allowance as well, as the expat population is mixed about sending their kids to local schools.

My brother in law is a global HR director for an MNC and he sent me material his company uses in determining compensation for transferred executives. For Houston, it is 1.4 times as expensive to live in Singapore. While I don't agree with all the parameters used, the number is inline, I believe. I know that the bay area costs more, so on the whole perhaps 1.1 to 1.2 is a good number, that is your total salary with all bennies ought to be hitting USD 275K to 300K, after one time allowances.

Hope that helps.

[carteki]

Sorry, but the average salary in Singapore is way way way lower than that (and that is for the average person on this board too).

Well, the average salary may be lower than that but for the position stated, within an MNC, while possibly a bit high is not an unrealistic number at all. Somebody is living in the $8,000 and up housing, and it isn't the people with average salaries but the people with above average salaries.

I'm not talking about an equivalent salary for the job performed. I am just stating that asking people how much I need to ask for when the base is more than 2 or 3 times what the average salary is a bit extreme.

I'm fairly sure that local hires at the OP's husbands level get by very nicely on their locally benchmarked salaries. I'm not sure that it is necessary to ask for "extra" just because you're from another country. The only exception I can possibly think of would be school fees. Housing seems comparable, if you run 2 cars at home it shouldn't be too much different here (your mileage is minimal here). Taxis are cheaper than US cities and public transport is good and works well. I'm assuming that you already pay for medical insurance in the US and it is likely to be cheaper here.

You will be getting additional income during this time from renting out your home in the States and the taxes are lower.

[Strong Eagle]

I'm not sure that it is necessary to ask for "extra" just because you're from another country.

At one time, when there was such a thing as corporate loyalty to its employees, I might have agreed with you.

Given that in today's world, an employee is as expendable as any piece of equipment, and easily cut if the cost cutters say so, I see no reason why to not make every attempt to extract the maximum out of the company. If I'm worth it, they will pay it.

[JayCee]

You don't need to live in Orchard just because your husband works there, transport here is excellent and it will only take him 30 mins in the morning from a lot of places.

Orchard is an overpriced and rather soulless place with no community feel and you won't really see much of the real Singapore if you just live and work there, which IMO kind of defeats the object of coming in the first place.

[Girl_Next_Door]

Ask about the next career path for your husband, after this posting. Do you plan to stay in Asia or move back to US. This is very important because things can get really comfortable in Singapore. Many expat families have maids to help them and life is easy. Everything works, traveling is cheap, taxes are low and life is easy, if you have a good package/salary. The challenge come when you decide to move back to SF because you will not have a maid and life would be less convenient. It may not be so easy to get a comparable salary after X numbers of years in SG, unless there is a clause within the initial contract that states that your husband will be transferred back to SF at a comparable terms. Make sure this is in black and white, as precise as possible. No ambiguity on this.

We are looking for a position back in Europe but due to the tax rates, our take home salary will involve a huge pay cut. Hence, we are going to stay in Asia for a bit longer...

A few other things you should consider includes
- Flights back home, including your kids. If you plan to have help, you might even want to factor this in. I have seen the entire family (including the maid) on business class.
- Accommodation: If this is taken care by your company, you don't have to be stressed about the initial deposit (2 months for 2 years rental). There can be some problems (sometimes, not all the times) in getting the deposits back at the end of the lease. If the end of the lease coincide with you heading back to SF, trust me, you don't want the stress of getting the money back. The deposit can be quite a significant number if the rental is high.
- Transport: Depending on how long you plan to stay in SG. If its for 2 years, renting a car and charging it as an expense to the company is an option. Its slightly more expensive than buying a car (which, in itself is already expensive) but it save you the troubles like insurance, road tax, etc. Make sure you include parking as well because they can be quite expensive in some locations.
- Education: If you plan to home-school. No issue. If you plan to send them to an International School, you need to do some research and get it down in your contract too. They are not cheap.
- Insurance: Make sure you have a comprehensive one.
- Financial planner: There are some expat financial planner in Singapore, google and you will find a few. Talk to them, and let them advise you on financial products as well as tax matters. They may be aware of other things that was not discussed in this forum as well.

In many financial institutions, they packaged the entire thing as a salary package, so you decide how you want to utilise the money. This is something you might want to consider. This option would allow you to save more when you are here. The downside is, rental market is not very stable and landlords have been known to increase rental by 50% upon expiry. If the company is taking care of your rent, you know you won't be stuck in a sticky position.

[Balnald]

I am relatively new to Singapore but in my package (very mid level no where near as close to a CEO)
housing allowance
Flight allowance (Full fare eonomy once a year with salary)
Car allowance at least S$2000 per month (you can lease a Chevrolet optima 2007 for 1200)
Cost of living allowance
Home maintainence allowance (if you keep house in sfo)
Home slaes assistance if you don't keep house in SFO
Education for kids in International School (tens of thousands a year if you can get a place)

[Brooklynjenn]

Wow, thank you so much for the detailed and thoughtful responses! I will definitely take these things into consideration, some of which I hadn't considered. We may not be able to rent out our house for the mortgage here, and it is an extremely difficult time to sell here. I believe we would be underwater on our mortgage. I am certainly not up for home schooling, so we'll definitely need a good school.

What the poster said about losing money coming back to the US is a concern. I know one guy just came back from Asia and lost $75,000 from his salary. HR told him there was a bump in pay for the Asia post that you lose coming back. I suppose if you get the bump on the way there it works out, but it is definitely something to work out in advance so there are no surprises. We are also of the opinion that the loyalty doesn't go both ways anymore, having experienced it first hand at the last company.

I do think there is some merit to living outside Orchard or it's neighboring districts, but he also works awful long hours and 30 minutes each way is an hour lost seeing the kids. The office is near Raffles. Is there a district within a 20 minute subway ride or walking that we should also be considering? Is the East Coast a viable option?

Thanks again for all the information. It is indeed helpful.

[JR8]

If I were a single young thing up for clubbing each night* I might consider Orchard, but no way with a young family. It'd be like moving to London and wishing to live on Oxford Street... yuk!

(*I used to be a single young thing who went clubbing every night back in the 90's, and lived just off Orchard Road lol)

p.s.
you'll find copies of the MRT map online that show the time between stops. 30 minutes will cover a pretty big area! Also note that the trains run reliably, so very (very )few break-downs and signal failures and so on to contend with...

[BillyB]

Negotiate hard and lay your cards on the table. Don't ever lose out for a round-the-world relocation and the inconvenience it brings, especially to the family.

Aim for at least a 10-20% increase in your basic take home pay. And factor in the tax implications when you return. Nothing should be left uncovered as its inconvenience to you, so the company should facilitate the move and be as accommodating as possible - which it sounds like they are.

Bear in mind the tax implications and higher rates if you move on elsewhere, and get agreement from the employer that the salary will be adjusted to take this into account.

For Orchard, you would need to double your housing for a 3 bed place, and even that won't get you much space. Move further out and you'll get much more space and bang for your buck.

And one final point, ignore what GND said about expat financial planners - avoid them like the plague. They are commission driven, never act independently, and generally give appalling advice.

Good luck

[Girl_Next_Door]

I do think there is some merit to living outside Orchard or it's neighboring districts, but he also works awful long hours and 30 minutes each way is an hour lost seeing the kids. The office is near Raffles. Is there a district within a 20 minute subway ride or walking that we should also be considering? Is the East Coast a viable option?

Thanks again for all the information. It is indeed helpful.

Do you have a precise location for his office? If yes, it will be easier to recommend a district within 20 mins from his office, if that is what you are looking for. Even Raffles Place has a few accommodations available but do note that the surrounding area is very quiet during the weekends.

If the plan is to get a car, then staying in Holland Village might be a viable option since driving to/fro within 20 mins is possible. I used to stay in East coast and unless you leave home before 7am, it is unlikely that you can get to office within 20 mins in the morning by car.

A good way to start is to look at the mrt map and searching within 5 stations in all directions from the office. Its about 2-4 minutes for each stop so 5 stops will take a maximum of 20 mins by train.

And one final point, ignore what GND said about expat financial planners - avoid them like the plague. They are commission driven, never act independently, and generally give appalling advice.

Good luck

In all industries, there are good and bad sheeps. There may be some bad sheeps but don't discount the good ones and chances is, you met a very bad one who is also incompetent.

For someone traveling such a long journey to the other side of the planet, I would think that getting as much information from all sources (beside forum) would be useful.

In any case, there is no commitment talking to one. Just take it as an information gathering experience/process. If the person is good and offer sound advice, you might want to consider his recommendation. If the person is incompetent, just ignore his recommendation.

And before you jump into the conclusion that I am one, if you read my old postings, you will know that I am not.

[ututu]

$250k - thats a tough life

Remember that the tax rate here is 15% (although you will still have to pay state-side taxes) so there is some merit in taking a bit of a pay cut.

I thought with re-jiggering of foreign income exclusion that Congress did few years back, foreign income exclusion became much worse than foreign tax credit, and thus total tax bite out of the income is pretty much similar to Fed's cut as if one were in US.

So technically the only tax savings are from state taxes & SSN/Medicare.