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Pr and cpf question

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Xavierx
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Pr and cpf question

Postby Xavierx » Wed, 11 Dec 2013 12:00 pm

Hi can anyone in similar situation share your experience?
The good news is my pr just approved. The bad news is my employer is asking me to sign a new contract to adjust my basic salary because he wants me to absorb cpf contribution. My questions to you:

1) can I ask for the same salary and employer to pay 21% cpf (pr first year) ?
2) what will happen if I'm not satisfied with the new contract terms and don't sign it? Will they continue paying the "old" salary without cpf? Are they obliged to pay cpf if I don't sign the new contract?

Ps: if the above doesn't work out, should I just quit?

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Postby sundaymorningstaple » Wed, 11 Dec 2013 12:56 pm

I take it you filed for PR without having his sponsorship via Annex A? As you circumvented your application past him, he is probably a bit perturbed that you just increased is cost of operation without his approval. Therefore, what I see is that you will probably sign it or lose your job. So, you can quit or wait for the axe to fall. I mean, after all, you just whacked him for an additional $$450~$825 in payroll costs per month, assuming you earn more than $5K/mo.

I'm afraid I wouldn't blame him if you were shown the door if you don't sign the new contract. You should have cleared your application and consequences with the employer before you applied.

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Postby zzm9980 » Wed, 11 Dec 2013 1:20 pm

But boy could you make a stink on Stomp and really get a lot of locals pissed at your employer, if they can connect the dots and figure out that he is paying foreigners more than he would pay a local.

I would suggest to just do it as long as the new contract is identical with the exception of the CPF contribution difference.

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Postby Xavierx » Wed, 11 Dec 2013 2:00 pm

Well SMS, operation cost is an issue but I'm unable to see how that was "circumvented". I got it on my own merit. Besides Isn't that companies love to have PRs, how do I otherwise see bunch of job posts out there with disclaimer "Singaporean and PRs only"?

Would I need to inform them when I surrender my work pass? If I continue working and get paid without cpf, would that be a violation of law by the employer?

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Postby FaeLLe » Wed, 11 Dec 2013 3:25 pm

Xavierx wrote:Would I need to inform them when I surrender my work pass?


Check your job contract, in most circumstances you would be obliged to notify the employer of changes in immigration situations

Xavierx wrote:If I continue working and get paid without cpf, would that be a violation of law by the employer?


You would not only be getting the employer in trouble but yourself.... you would not be paying CPF on your earnings which puts you in a tight position with the government / CPF board / IRAS.

Xavierx wrote:Besides Isn't that companies love to have PRs, how do I otherwise see bunch of job posts out there with disclaimer "Singaporean and PRs only"?


Yes PR's are preferred but that does not mean they are willing to accept YOU with your increased cost to the company.

You need to convince the employer your skills are valuable and that you deserve the increased expense he will incur.

If you cannot them you need to accept the pay cut.

P.S. A lot of big names / MNC's in Singapore have a standard HR clause that says your pay is inclusive of CPF and if you become eligible to pay CPF the total enumeration would remain the same (i.e. Your total take home = Salary - CPF).[/u]

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Postby AngMoG » Wed, 11 Dec 2013 3:27 pm

Xavierx wrote:Well SMS, operation cost is an issue but I'm unable to see how that was "circumvented". I got it on my own merit. Besides Isn't that companies love to have PRs, how do I otherwise see bunch of job posts out there with disclaimer "Singaporean and PRs only"?

Would I need to inform them when I surrender my work pass? If I continue working and get paid without cpf, would that be a violation of law by the employer?


If you did not tell him in advance, that was the circumvention...

Companies like to have PRs and SCs, but many do not want to pay extra for employing them. That is one of the major problems, actually; I still do not understand why SCs are more expensive than PRs are more expensive than EPs/S-Pass to employ. It seems to run contrary to the gov's goal of employers giving preference to SCs before PRs before foreigners.

I guess your choices are:
1) Sign the thing as is, take the (disposable) salary cut, and look for a new job as soon as possible if you can find a job that pays better.
2) Don't sign, and probably find yourself out of a job soon. You may be able to force the employer to continue employing you on your old salary, but that will most likely lead to him firing you very soon - note that you can always be terminated at a month's notice here (or whatever your contract says) without any reason given.
3) Try to negotiate a solution that is acceptable to both of you, presumably somewhere in the middle.

Yes, as soon as you are PR, your employer will have to pay your CPF while you are employed there, or risk breaking the law. However, prosecution in that area is not too strong.

I am not sure how long you have been in Singapore, but you should know that employees have no rights here other than what is written in the contract. This applies to your situation as well.

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Postby Wd40 » Wed, 11 Dec 2013 3:39 pm

Xavierx wrote:Well SMS, operation cost is an issue but I'm unable to see how that was "circumvented". I got it on my own merit. Besides Isn't that companies love to have PRs, how do I otherwise see bunch of job posts out there with disclaimer "Singaporean and PRs only"?

Would I need to inform them when I surrender my work pass? If I continue working and get paid without cpf, would that be a violation of law by the employer?


Companies love to have PRs because there is no minimum pay. They can pay peanuts to PRs, whereas EP holders, for pass approval need to have certain minimum pay. So you are completely wrong as to why they love PRs and SGns.

Read your contract again. From, what I know most contract will say that if you immigration status changes then contract terms change or they explicitly specify that employers contribution to CPF is also part of the salary that they are giving you as a take home. This is very common in employment contracts of IT staffing companies.

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Postby nakatago » Wed, 11 Dec 2013 3:59 pm

AngMoG wrote:Companies like to have PRs and SCs, but many do not want to pay extra for employing them. That is one of the major problems, actually; I still do not understand why SCs are more expensive than PRs are more expensive than EPs/S-Pass to employ. It seems to run contrary to the gov's goal of employers giving preference to SCs before PRs before foreigners.


* To cater to the locals' entitlement complex
* CPF
* Foreigners are easier to lure with less money if they come from less-affluent countries. A lot of companies pay based on what a person's worth in his home country if from less affluent countries rather than what he's worth, period.

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Postby Beeroclock » Wed, 11 Dec 2013 5:18 pm

Regarding the 1st year PR contribution rate, I think at most you could hope for the graduated scale, which is 9% total (5% employee / 4% employer) and with the cap per $5k monthly salary.

Per CPF website "CPF contributions are payable at graduated rates once a foreign employee becomes a SPR. During the employee’s first two years of obtaining SPR status, they and their employers have the option to jointly apply to CPF Board to contribute at higher prescribed rates."

Since the 1st year PR full rate (i.e. the 21% total contribution you mentioned) requires your employer's agreement for the joint application to cpf, it doesn't sound likely that's going to happen.

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Postby AngMoG » Wed, 11 Dec 2013 5:27 pm

nakatago wrote:
AngMoG wrote:Companies like to have PRs and SCs, but many do not want to pay extra for employing them. That is one of the major problems, actually; I still do not understand why SCs are more expensive than PRs are more expensive than EPs/S-Pass to employ. It seems to run contrary to the gov's goal of employers giving preference to SCs before PRs before foreigners.


* To cater to the locals' entitlement complex
* CPF
* Foreigners are easier to lure with less money if they come from less-affluent countries. A lot of companies pay based on what a person's worth in his home country if from less affluent countries rather than what he's worth, period.


Not sure how it caters to the locals' entitlement complex if their net salary is lower than the net salary of a foreign colleague earning the same gross salary as they do... :P

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Postby nakatago » Wed, 11 Dec 2013 5:35 pm

AngMoG wrote:
nakatago wrote:
AngMoG wrote:Companies like to have PRs and SCs, but many do not want to pay extra for employing them. That is one of the major problems, actually; I still do not understand why SCs are more expensive than PRs are more expensive than EPs/S-Pass to employ. It seems to run contrary to the gov's goal of employers giving preference to SCs before PRs before foreigners.


* To cater to the locals' entitlement complex
* CPF
* Foreigners are easier to lure with less money if they come from less-affluent countries. A lot of companies pay based on what a person's worth in his home country if from less affluent countries rather than what he's worth, period.


Not sure how it caters to the locals' entitlement complex if their net salary is lower than the net salary of a foreign colleague earning the same gross salary as they do... :P


guy from third world country = just as skilled, if not more but willing to work for less money
guy from first world country = just as skilled, if not more worth the higher price tag but will probably brought in on a local package without the whinging.

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Postby Beeroclock » Wed, 11 Dec 2013 5:45 pm

AngMoG wrote:Not sure how it caters to the locals' entitlement complex if their net salary is lower than the net salary of a foreign colleague earning the same gross salary as they do... Razz


I guess many will calculate like this, but it's important to remember the cpf while restricted is still your money. It's not a "net" salary deduction in the sense of tax. So while the SC's "disposable" salary is lower than a foreign colleague earning same gross salary, they are retaining the difference as forced savings for retirement and earning a very good interest rate for Singapore.

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Postby sundaymorningstaple » Wed, 11 Dec 2013 7:32 pm

Beeroclock wrote:Regarding the 1st year PR contribution rate, I think at most you could hope for the graduated scale, which is 9% total (5% employee / 4% employer) and with the cap per $5k monthly salary.

Per CPF website "CPF contributions are payable at graduated rates once a foreign employee becomes a SPR. During the employee’s first two years of obtaining SPR status, they and their employers have the option to jointly apply to CPF Board to contribute at higher prescribed rates."

Since the 1st year PR full rate (i.e. the 21% total contribution you mentioned) requires your employer's agreement for the joint application to cpf, it doesn't sound likely that's going to happen.


Which is why, in the first reply to the OP, I said his additional cost to the company will be from $450~$825 a month assuming his basic salary is over $5K/mo. 9% x 5K = $450 9posts so far saying everything that I said, with nothing new at all, but just using a lot more words. :lol:

The way I see it, he couldn't be stuffed to find out something simple like this, how do ya except him to decipher all the additional garbage. ;-)

I like the KISS method. :cool:

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Postby Beeroclock » Wed, 11 Dec 2013 9:53 pm

Well actually additional cost to company might only be 4% or $200/mth, which is the graduated employer contribution in PR 1st year. The 9% is total employer plus employee. But I take your point, more than enough said.

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Postby Xavierx » Wed, 11 Dec 2013 10:16 pm

I've taken a hard look at my contract and nowhere in the fine print mentions about my salary upon pr approval. My base is around 6k. But you are right, graduated rate applies for 1st year pr. This means 5% from me and 4% employer and capped at 450$. Effectively "additional operation cost" for my boss would be just 250$. Ok, my conspiracy theory is that he might be willing to swallow this until he has to pay 21%


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