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Tax to Pay

Discuss about getting a well paid job or career advancement. Ask about salaries, expat packages, CPF & taxes for expatriate.

singoliver
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Tax to Pay

Postby singoliver » Wed, 06 Nov 2013 5:08 pm

Hi,

I just got a job in Singapore and moving there soon as an expat. I got my Employment Pass (Category P2). My contract is for one year and my basic salary will be 5700 sgd/month. I would like to learn the tax that I am going to pay.

I am aware of the tax calculator from IRAS (http://www.iras.gov.sg/irashome/taxcalculators.aspx), however I couldn't be sure about whether I use the right calculator. I ask this since they have multiple calculators based on the situation of the person.

For instance, what resident means? If I have EP, am I considered as a resident? They also have an option like "foreigners who are in Singapore for 183 days or more". Does this mean that whether I will stay in Singapore for 183 days or more (according to my contract) or this is valid if I already stayed there for 183 days.

Simply could you refer me which calculator should I use?

Thanks...

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the lynx
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Re: Tax to Pay

Postby the lynx » Wed, 06 Nov 2013 5:15 pm

singoliver wrote:Hi,

I just got a job in Singapore and moving there soon as an expat. I got my Employment Pass (Category P2). My contract is for one year and my basic salary will be 5700 sgd/month. I would like to learn the tax that I am going to pay.

I am aware of the tax calculator from IRAS (http://www.iras.gov.sg/irashome/taxcalculators.aspx), however I couldn't be sure about whether I use the right calculator. I ask this since they have multiple calculators based on the situation of the person.

For instance, what resident means? If I have EP, am I considered as a resident? They also have an option like "foreigners who are in Singapore for 183 days or more". Does this mean that whether I will stay in Singapore for 183 days or more (according to my contract) or this is valid if I already stayed there for 183 days.

Simply could you refer me which calculator should I use?

Thanks...


If you have stayed more than 183 by the time you file your income tax (usually around April), you're considered as tax resident.

If you have not completed 183 days before the filing, you don't have to pay income tax for that year and you will only have to pay it the following year.

Hence the question would be, when are you starting?

singoliver
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Re: Tax to Pay

Postby singoliver » Wed, 06 Nov 2013 5:38 pm

the lynx wrote:
singoliver wrote:Hi,

I just got a job in Singapore and moving there soon as an expat. I got my Employment Pass (Category P2). My contract is for one year and my basic salary will be 5700 sgd/month. I would like to learn the tax that I am going to pay.

I am aware of the tax calculator from IRAS (http://www.iras.gov.sg/irashome/taxcalculators.aspx), however I couldn't be sure about whether I use the right calculator. I ask this since they have multiple calculators based on the situation of the person.

For instance, what resident means? If I have EP, am I considered as a resident? They also have an option like "foreigners who are in Singapore for 183 days or more". Does this mean that whether I will stay in Singapore for 183 days or more (according to my contract) or this is valid if I already stayed there for 183 days.

Simply could you refer me which calculator should I use?

Thanks...


If you have stayed more than 183 by the time you file your income tax (usually around April), you're considered as tax resident.

If you have not completed 183 days before the filing, you don't have to pay income tax for that year and you will only have to pay it the following year.

Hence the question would be, when are you starting?


I will start working this December. I don't need to pay the tax next April then. I assume that I still need to pay the tax if I leave at the end of my contract which is December 2014 even though I won't be in Singapore during April 2015.

In this case, I think I should use " Income tax calculator for tax resident individuals", right?

When I use this calculator, I get

Tax Payable on Chargeable Income = 2538 (around 3.7% of my salary)
Tax Payable after Personal Income Tax Rebate = 1776 (around 2.6%)

As I understand, I need to pay the first amount (2538). They will return 30% back.

2.6% looks quite low for income tax, nice :)

So, this will be my tax payment I presume.

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sundaymorningstaple
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Postby sundaymorningstaple » Wed, 06 Nov 2013 5:51 pm

If your contract is over in December 2014 and you will be leaving the country, your employer is required by law to withhold your entire final salary and file an IR-21 (Tax Clearance) and pay your taxes for you. They will then deduct the taxes from your final paycheck and give you the balance. They are required, by law, to do this as they are made an 'agent' of IRAS to collect the taxes payable. Don't worry, they will get their's before you leave. In fact it has to be paid and a letter received by the employer (an a copy to you) saying that they are now allow to release any final monies due you....

Taxes already paid in will also be taken into account when IRAS computes your final taxes. As you will be arriving in December you shouldn't have a tax bill for YA 2014 unless they don't automatically grant you the "straddle" across two years. Should that be the case, you will pay 15% on that, but when your tax bill is recomputed that will be amended automatically (if you did not ask to have it amended shortly after you reached the 183 days threshold.) The odds are you will be automatically treated as as Resident because you will be holding a one year EP.

singoliver
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Postby singoliver » Wed, 06 Nov 2013 6:06 pm

sundaymorningstaple wrote:If your contract is over in December 2014 and you will be leaving the country, your employer is required by law to withhold your entire final salary and file an IR-21 (Tax Clearance) and pay your taxes for you. They will then deduct the taxes from your final paycheck and give you the balance. They are required, by law, to do this as they are made an 'agent' of IRAS to collect the taxes payable. Don't worry, they will get their's before you leave. In fact it has to be paid and a letter received by the employer (an a copy to you) saying that they are now allow to release any final monies due you....

Taxes already paid in will also be taken into account when IRAS computes your final taxes. As you will be arriving in December you shouldn't have a tax bill for YA 2014 unless they don't automatically grant you the "straddle" across two years. Should that be the case, you will pay 15% on that, but when your tax bill is recomputed that will be amended automatically (if you did not ask to have it amended shortly after you reached the 183 days threshold.) The odds are you will be automatically treated as as Resident because you will be holding a one year EP.


So, you say that I might need to pay 15% tax if they ask to pay before 183 days of my stay. After 183 days, they will change/correct my tax rate to 2.6% (according to the first tax calculator in the IRAS website) and pay back the difference.

expat_singapore
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Postby expat_singapore » Wed, 06 Nov 2013 6:48 pm

sundaymorningstaple wrote:If your contract is over in December 2014 and you will be leaving the country, your employer is required by law to withhold your entire final salary and file an IR-21 (Tax Clearance) and pay your taxes for you. They will then deduct the taxes from your final paycheck and give you the balance. They are required, by law, to do this as they are made an 'agent' of IRAS to collect the taxes payable. Don't worry, they will get their's before you leave. In fact it has to be paid and a letter received by the employer (an a copy to you) saying that they are now allow to release any final monies due you....

Taxes already paid in will also be taken into account when IRAS computes your final taxes. As you will be arriving in December you shouldn't have a tax bill for YA 2014 unless they don't automatically grant you the "straddle" across two years. Should that be the case, you will pay 15% on that, but when your tax bill is recomputed that will be amended automatically (if you did not ask to have it amended shortly after you reached the 183 days threshold.) The odds are you will be automatically treated as as Resident because you will be holding a one year EP.




Hello,

Similar to this case , I will be most probably starting my work in February 2014, and will be there in Singapore it seems now until Feb 2016. SGD salary is 6500. How will the tax applicable to me, how much monthly tax I have to pay for this period.

Thanks

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sundaymorningstaple
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Postby sundaymorningstaple » Wed, 06 Nov 2013 8:01 pm

As you will be in the country more than 183 days, just plug the amount into the Resident Tax Calculator on the IRAS site.

http://www.iras.gov.sg/irasHome/uploade ... 1_IRAS.xls

It's a downloadable .xls file Just save it to your desk top.

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Postby livingontheedge » Fri, 08 Nov 2013 7:45 pm

You will pay income tax based resident income tax rates.

Something most expats didn't know about until they are consulted upon is that if you are paid any other form of allowances, such as housing allowance, school allowance, etc., and/or benefits-in-kind, they will be taxable as well - added to your annual salary.

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Postby zzm9980 » Fri, 08 Nov 2013 9:36 pm

livingontheedge wrote:You will pay income tax based resident income tax rates.

Something most expats didn't know about until they are consulted upon


Really? Seems pretty common sense to almost everyone I know.


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