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Compensation Privacy

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Compensation Privacy

Postby johnjin » Wed, 10 Jul 2013 7:33 pm

Hi,

I am trying to understand how truly private and personal are compensation information in Singapore, and was thinking that some of you may have experience or know something on this.

Use case
Expat got hired by company X, got an EP and moved to Singapore in the beginning of 2013, and is currently working at the company. No taxes got paid and relative declarations have been filled yet, since the period to do so for the current year will be in the beginning of the next year.

He gets another interesting possibility for changing his job by another company, company Y , interested and looking to make him an offer.

- would company Y have any chance to discover how much he is currently making - before to make him the offer, or even later in the future when maybe he is working with them?

- they maybe can get access to those information through the MOM, since they would have to ask for an EP renewal?

- OR/AND they would not be able to know his current salary before to take him onboard BUT, during the beginning of 2014, while preparing the taxes documents for him (that in the meantime joined), they would easily understand how much he made before?

Thanks in advance :-)

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Postby yogaloungeforever » Wed, 10 Jul 2013 8:49 pm

Company Y will definitely ask you for your current salary. Once an offer is made with co Y (and from my experience on the day you collect the offer letter) HR will request for payslips from your last employment. Of course if you intend to jack up your salary by lying about your current salary, you lose your offer. Very rarely do companies go to MoM for this sort of info.
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Postby yogaloungeforever » Wed, 10 Jul 2013 8:57 pm

as for co Y filing taxes on your behalf, they don't have to go to your prev employer to find out your last salary (assuming they did not collect your payslips). they just have to go to IRAS and all your salaries are captured from the time you started work to the last day of your employment with co X. from there, co x submits the amount that you have earned and IRAS calculates the amount of taxes you would need to pay. same with co Y. they will just submit your total earnings with co Y and then IRAS does the calculations and reverts with the amount of taxes you need to pay
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Postby johnjin » Wed, 10 Jul 2013 9:13 pm

yogaloungeforever wrote:as for co Y filing taxes on your behalf, they don't have to go to your prev employer to find out your last salary (assuming they did not collect your payslips). they just have to go to IRAS and all your salaries are captured from the time you started work to the last day of your employment with co X. from there, co x submits the amount that you have earned and IRAS calculates the amount of taxes you would need to pay. same with co Y. they will just submit your total earnings with co Y and then IRAS does the calculations and reverts with the amount of taxes you need to pay


First of all thanks for sharing your information / experience :-)

Considering what you wrote, sounds like incomes are not private at ALL then?! Why company Y would have the power to go to IRAS and look through the earnings a person made with a previous employer? Those data aren't supposed to be strictly personal and confidential?

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Postby yogaloungeforever » Wed, 10 Jul 2013 9:32 pm

Co Y goes to IRAS not to dig into your prev earnings with Co X but to submit total earnings for Co Y. Only IRAS has the info fr both co. so IRAS needs total earnings fr co Y to calculate taxes you need to pay. they would make an assessment on the amt of taxes you paid fr co X and co Y and then give the assessed tax amount to co Y to with-hold the taxes fr your salary.
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Postby johnjin » Wed, 10 Jul 2013 10:11 pm

yogaloungeforever wrote:Co Y goes to IRAS not to dig into your prev earnings with Co X but to submit total earnings for Co Y. Only IRAS has the info fr both co. so IRAS needs total earnings fr co Y to calculate taxes you need to pay. they would make an assessment on the amt of taxes you paid fr co X and co Y and then give the assessed tax amount to co Y to with-hold the taxes fr your salary.


Which means that company Y at the point could easily do some reverse engineering and get your previous pay. Should it be like this, we are then stating that compensation is not private, which does sound a lil bad. Actually, instead of the company to with-hold the taxes from the salary, why the employee can't just pay himself the full amount to MOM? (I actually thought it worked like this).

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Postby Strong Eagle » Wed, 10 Jul 2013 10:25 pm

Your earnings information is private at IRAS. Most reputable companies will also not release that information, except with permission of the employee. Example: Employee wishes to buy furniture on time payments. Seller requires knowledge of earnings of purchaser.

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Postby johnjin » Thu, 11 Jul 2013 2:59 pm

Strong Eagle wrote:Your earnings information is private at IRAS. Most reputable companies will also not release that information, except with permission of the employee. Example: Employee wishes to buy furniture on time payments. Seller requires knowledge of earnings of purchaser.


Im then confused - are there or not practicable ways for HR departments to access and know those information, or not?

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Postby Strong Eagle » Thu, 11 Jul 2013 10:12 pm

johnjin wrote:
Strong Eagle wrote:Your earnings information is private at IRAS. Most reputable companies will also not release that information, except with permission of the employee. Example: Employee wishes to buy furniture on time payments. Seller requires knowledge of earnings of purchaser.


Im then confused - are there or not practicable ways for HR departments to access and know those information, or not?


Generally, the only way for an HR department to know your previous salary is to ask the applicant for pay slips. Most companies do not want to divulge their rates of pay for competitive reasons.

Why are you so focused on this question?

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Postby sundaymorningstaple » Thu, 11 Jul 2013 10:35 pm

johnjin wrote:
yogaloungeforever wrote:Co Y goes to IRAS not to dig into your prev earnings with Co X but to submit total earnings for Co Y. Only IRAS has the info fr both co. so IRAS needs total earnings fr co Y to calculate taxes you need to pay. they would make an assessment on the amt of taxes you paid fr co X and co Y and then give the assessed tax amount to co Y to with-hold the taxes fr your salary.


Which means that company Y at the point could easily do some reverse engineering and get your previous pay. Should it be like this, we are then stating that compensation is not private, which does sound a lil bad. Actually, instead of the company to with-hold the taxes from the salary, why the employee can't just pay himself the full amount to MOM? (I actually thought it worked like this).


yogaloungeforever is incorrect.

This would only happen if you left Co. Y before the end of the current tax year or early during the next tax year (Say around the end of the filing deadline). It's only when you leave a company that the company has to file an IR-21 (Tax Clearance). When/If you leave Co X, they will have to file a Tax Clearance and withhold your last month's salary when you turn in your notice (one month is minimum required) The tax clearance has to be filed one month prior to your final date with the company. Any taxes have to be paid by the company and then deducted from your withheld final salary. If it is early in the year there is a good possibility of not having to pay to much taxes but if it is less than 183 days you will be taxed at 15% flat rate (which could be a hefty bite if you are not prepared for it). If you leave the second employer before the same year is finished or within the first couple of months of the following year, this is the only time that they could figure out what your previous salary was, as this is the only time that they would get a copy of your final tax bill (which would include both the 1 & 2nd co's incomes and also show any previous amounts paid for taxes.

Of course, if you have left the 2nd company as well, then it doesn't matter to much if they figure it out or not - not that they would care if you have already resigned.

Word to the wise, any time you decide to resign from a company in Singapore, resign the day after you receive your paycheck. If you normally receive your check/deposit on say the 5th or 6th of the following month, don't turn in your letter of resignation on the 1st. IRAS required the immediate withholding of all salaries/leave/allowances from the date of the resignation letter. This could find you in a bind as you could foreseeable find yourself with two months taxes being withheld. (Having said that - if the IR-21 is timely filed,1 month before you final day of work, it will usually be determined and mailed to the employer and a copy to you with 10 to 12 days - often as fast as 5 to 7 days. At that point the letter will tell the employer if there are no additional incomes to report is it okay to release any monies owing to the employee when due.

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Postby PNGMK » Thu, 11 Jul 2013 11:47 pm

Strong Eagle wrote:
johnjin wrote:
Strong Eagle wrote:Your earnings information is private at IRAS. Most reputable companies will also not release that information, except with permission of the employee. Example: Employee wishes to buy furniture on time payments. Seller requires knowledge of earnings of purchaser.


Im then confused - are there or not practicable ways for HR departments to access and know those information, or not?


Generally, the only way for an HR department to know your previous salary is to ask the applicant for pay slips. Most companies do not want to divulge their rates of pay for competitive reasons.

Why are you so focused on this question?


Furthermore some MNC's consider pay and salary matters to be confidential even after your employment has ceased. I usually refuse to provide this information.

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Postby yogaloungeforever » Fri, 12 Jul 2013 12:22 am

sundaymorningstaple,

which part of it i wrote below is incorrect?

with the exception of the 183 days which i left out on purpose what I have described below is as per experience


sundaymorningstaple wrote:
yogaloungeforever wrote:Co Y goes to IRAS not to dig into your prev earnings with Co X but to submit total earnings for Co Y. Only IRAS has the info fr both co. so IRAS needs total earnings fr co Y to calculate taxes you need to pay. they would make an assessment on the amt of taxes you paid fr co X and co Y and then give the assessed tax amount to co Y to with-hold the taxes fr your salary.


yogaloungeforever is incorrect.

This would only happen if you left Co. Y before the end of the current tax year or early during the next tax year (Say around the end of the filing deadline). It's only when you leave a company that the company has to file an IR-21 (Tax Clearance). When/If you leave Co X, they will have to file a Tax Clearance and withhold your last month's salary when you turn in your notice (one month is minimum required) The tax clearance has to be filed one month prior to your final date with the company. Any taxes have to be paid by the company and then deducted from your withheld final salary. If it is early in the year there is a good possibility of not having to pay to much taxes but if it is less than 183 days you will be taxed at 15% flat rate (which could be a hefty bite if you are not prepared for it). If you leave the second employer before the same year is finished or within the first couple of months of the following year, this is the only time that they could figure out what your previous salary was, as this is the only time that they would get a copy of your final tax bill (which would include both the 1 & 2nd co's incomes and also show any previous amounts paid for taxes.

Of course, if you have left the 2nd company as well, then it doesn't matter to much if they figure it out or not - not that they would care if you have already resigned.

Word to the wise, any time you decide to resign from a company in Singapore, resign the day after you receive your paycheck. If you normally receive your check/deposit on say the 5th or 6th of the following month, don't turn in your letter of resignation on the 1st. IRAS required the immediate withholding of all salaries/leave/allowances from the date of the resignation letter. This could find you in a bind as you could foreseeable find yourself with two months taxes being withheld. (Having said that - if the IR-21 is timely filed,1 month before you final day of work, it will usually be determined and mailed to the employer and a copy to you with 10 to 12 days - often as fast as 5 to 7 days. At that point the letter will tell the employer if there are no additional incomes to report is it okay to release any monies owing to the employee when due.
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Postby sundaymorningstaple » Fri, 12 Jul 2013 12:35 am

Unless the employee leave the employ of the 2nd employer, then there is no need or option for the 2nd employer to submit an IR-21. So they will not know until it is already too late as the employee as already resigned. If the employee hasn't resigned, no IR-21 is required as the only thing that the employee submits is either an IR8A or IR8e for electronic submission (required for all companies with over 10 employees). The employer doesn't have a clue as to the other company's reported earnings as they will submit their own IR8A, so there is a considerable difference.

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Postby yogaloungeforever » Fri, 12 Jul 2013 12:51 pm

Ok with the exception of specific forms mentioned what I had described earlier would still apply. In all my employment my salaries have always been with-held for taxation. which form is used I was not in the know at that point in time


sundaymorningstaple wrote:Unless the employee leave the employ of the 2nd employer, then there is no need or option for the 2nd employer to submit an IR-21. So they will not know until it is already too late as the employee as already resigned. If the employee hasn't resigned, no IR-21 is required as the only thing that the employee submits is either an IR8A or IR8e for electronic submission (required for all companies with over 10 employees). The employer doesn't have a clue as to the other company's reported earnings as they will submit their own IR8A, so there is a considerable difference.
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Postby sundaymorningstaple » Fri, 12 Jul 2013 2:14 pm

Sure you would. The IR-21 (Tax Clearance) is ONLY used when the foreign employee leaves the company (one time usage). The IR8A/e is used every years to report your earning to the IRAS so they can compute your annual tax bill. I'm am not sure why you are being so obtuse. It's not that hard to understand. Even my PRC's on WPs understand the concept.

The ONLY time an employer could theoretically figure out you previous salary is if you resign from the current employer in the same tax year as the previous/first employer.

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