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Upcoming questions on changing jobs and tax

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Meursault
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Upcoming questions on changing jobs and tax

Postby Meursault » Mon, 05 Dec 2011 10:22 pm

Hello all,

Please forgive me if these are silly questions. I'm relatively new to Singapore after only being here since February 2011 and have been fairly isolated because of work from anyone who can give me reliable info.

I've been in my job on an EP since February 2011 on a monthly salary of $5300 per month, and plan to resign in January 2012 to change to a different employer. The new EP is already approved in principal. My questions are as follows and I'll be really grateful for advice.

1. When I resign, I will be giving one month's notice period and the normal practice in my profession is that I will receive one month's garden leave. My original plan was to travel during this garden leave, but I've been told that I will not be allowed to leave Singapore until my outstanding tax is paid. Is this the case?

2. I know that outstanding tax will be deducted from my final salary. Since I have been here almost a year on $5300 a month and have not paid any tax yet, should I assume that my final salary cheque at the end of January will just be wiped out by tax? Need to start saving now if I'm going to miss a month's salary!

3. My annual holiday allowance is 20 days a year. In anybody's experience here would I also receive salary for this leave if I resign on January 3rd, or is it a case where it won't be classed as accumulated yet?

Thanks in advance for your help. Our company has a HR but asking questions of this nature will undoubtedly result in instant dismissal!

Meursault.
I used to be indecisive, but now I'm not so sure.

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sundaymorningstaple
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Re: Upcoming questions on changing jobs and tax

Postby sundaymorningstaple » Tue, 06 Dec 2011 12:21 am

Meursault wrote:Hello all,

Please forgive me if these are silly questions. I'm relatively new to Singapore after only being here since February 2011 and have been fairly isolated because of work from anyone who can give me reliable info.

I've been in my job on an EP since February 2011 on a monthly salary of $5300 per month, and plan to resign in January 2012 to change to a different employer. The new EP is already approved in principal. My questions are as follows and I'll be really grateful for advice.

1. When I resign, I will be giving one month's notice period and the normal practice in my profession is that I will receive one month's garden leave. My original plan was to travel during this garden leave, but I've been told that I will not be allowed to leave Singapore until my outstanding tax is paid. Is this the case?

You can try, but it's best not too as they won't be real receptive seeing you have just had your EP canceled and they will not have any record of Tax Clearance having been filed. Not a good idea.

2. I know that outstanding tax will be deducted from my final salary. Since I have been here almost a year on $5300 a month and have not paid any tax yet, should I assume that my final salary cheque at the end of January will just be wiped out by tax? Need to start saving now if I'm going to miss a month's salary!

You taxes, provided there aren't too many changes, will be in the neighbourhood of $1,900 only.

http://iras.gov.sg/irasHome/uploadedFil ... 1_IRAS.xls

3. My annual holiday allowance is 20 days a year. In anybody's experience here would I also receive salary for this leave if I resign on January 3rd, or is it a case where it won't be classed as accumulated yet?

Based on what you've said, they will have to pay you this amount if you haven't taken any annual leave during the year, so that would be approximately 4,900 plus if you resign on Jan 3, giving one month's notice you income for the year 2012 would be around 10K. So when tax clearance if filed (IR-21) your taxes liability for 2011 would be around $1900 as noted above and your tax liability for 2012 would be zero AT THIS POINT. Of course, at the end of 2012, you will have to report all your income on your tax return from both companies.

Thanks in advance for your help. Our company has a HR but asking questions of this nature will undoubtedly result in instant dismissal!

Meursault.


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carteki
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Postby carteki » Tue, 06 Dec 2011 8:23 am

What you can do is go to IRAS and give them a copy of your new contract and this will expedite the tax clearance process. I know if you change jobs during the year this can mean that they can waive you paying the tax due up to date.

I assume that my final salary cheque at the end of January will just be wiped out by tax? Need to start saving now if I'm going to miss a month's salary!


And the same would've happened in March / April when your prev years tax came due. Best to make a habit to save a little bit each month ...

Meursault
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Postby Meursault » Tue, 06 Dec 2011 2:16 pm

A big thank you to both Sundaymorningstaple and Carteki for their helpful advice.
I used to be indecisive, but now I'm not so sure.

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ecureilx
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Postby ecureilx » Tue, 06 Dec 2011 5:00 pm

carteki wrote:What you can do is go to IRAS and give them a copy of your new contract and this will expedite the tax clearance process. I know if you change jobs during the year this can mean that they can waive you paying the tax due up to date.

I assume that my final salary cheque at the end of January will just be wiped out by tax? Need to start saving now if I'm going to miss a month's salary!


And the same would've happened in March / April when your prev years tax came due. Best to make a habit to save a little bit each month ...


IRAS "MAY" let you follow the regular tax assesment process, as you are considered to be employed, and will issue a letter in this regard addressed to your employer, so your employer can release the salary withheld.

However, such happens only after you have collected your new EP. With a contract ? No, I don't think so. Or haven't done so.

For me, out of the 4 times I changed job, the first time, I paid up, and then got clearence, to get my last month pay

The next 3 places, I got IRAS to issue a letter to my employer stating they can release the held pay, after I had collected my new EP and went over to IRAS to pass a copy of the EP and then they sent me a letter informing me that I am considered to be 'in continued residence' in Singapore, and the assesment will follow the normal calender cycle

Then again, one of the ex-employer's HR refused to accept such letter and refused to understand it, even though it was from IRAS and insisted that I pay and come and show the clearence, as per their normal process, and my virtually being broke at that time, didn't go far ..

Probably they didn't have a system for non-standard processes, and only a bit of persuasion from their own higher up did get them to release the held pay. The HR took exception to IRAS' wording that "HELD PAY CAN BE RELEASED" disputing the meaning of the word "CAN" ... against "MUST BE RELEASED ... :roll: :roll:

Oh, of all the places, I left amicably, and had no qualms telling them that I am continually working in Singapore .. if you left with a bit of bad blood, the HR Can throw the rule book at you and still insist you pay up.


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