# Singapore Tax and Other Contractual Obligation



## SK85 (Jul 9, 2014)

Hi Values Viewer,

I am from Cambodia and will be move to Singapore first week August. Yesterday I got a phone call from recruiter; confirm on employment (1 year contract) offered me the below:

_



REMUNERATION
Your remuneration package will comprise of monthly base salary of SGD4,800, inclusive of employer’s contribution to Central Provident Fund. 15% of your salary will be withheld towards taxes and other contractual obligations for the first six months or up to 31st December, whichever is earlier, in the first year of your employment with the company. In year 2, 15% of your salary will be withheld for the first six months and subsequent years 8% of your salary will be withheld every month towards taxes and other contractual obligations. The different between the amount so withheld and the actual obligations including as taxes as calculated by the revenue authorities will be refunded to you after the obligations including taxes are met for the financial year.

Click to expand...

_Please help to clarify me below inquiry:
1. Base on one year contract, I will live in Singapore for more that 183 days. Hence I am "Resident Individual". Am I right?
2. Base on employment contract, _*"15% of your salary will be withheld towards taxes and other contractual obligations for the first six months or up to 31st December..."*_ . Does it is common obligation?
3. For the last clause _"The different between the amount so withheld..."_. Can anyone explain me?


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## beppi (Jun 10, 2013)

1. Yes, you are right. If you stay in Singapore for more than 183 days consecutively, you will be taxed at resident rates.
2. This is not common, and in fact does not sound right. Tax obligations are yours and not the company's. Only when you resign (or are fired) and leave the country, your employer must clear tax matters for you - and in that case they are required (by law) to withhold all salary from the date of your termination until tax matters are cleared, pay the tax due from this and reimburse to you the difference. So there is no need to withhold any further amount.
3. This means they will reimburse to you the difference between the tax paid and the amount withheld.


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## SK85 (Jul 9, 2014)

Hi beppi,

Thank you so much for your replied. That a brilliant source for me since this is first time to Singapore.

By the way, I'm going to ask employer to take out _"15% of your salary will be withheld..."_ from contract. What is your suggestion? One more thing, how can I edit my post?

Regards


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## selvas14 (Sep 21, 2009)

*Help...*

Sorry SK85, sorry to nag you in between your queries, can you please share through which consultant you reached out and got a job, so that ill also reach them and try for my job search...


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## simonsays (Feb 11, 2009)

beppi said:


> 1. Yes, you are right. If you stay in Singapore for more than 183 days consecutively, you will be taxed at resident rates.
> 2. This is not common, and in fact does not sound right. Tax obligations are yours and not the company's. Only when you resign (or are fired) and leave the country, your employer must clear tax matters for you - and in that case they are required (by law) to withhold all salary from the date of your termination until tax matters are cleared, pay the tax due from this and reimburse to you the difference. So there is no need to withhold any further amount.
> 3. This means they will reimburse to you the difference between the tax paid and the amount withheld.


you are wrong there for 2

employers can hold 15% of the pay till the NOA comes and they will release the money to the employee not pay IRAS

years ago this used to be the norm like 15 or so years ago, for the first year of employment, but nowadays very rare for companies to do it, but some old time companies still do.

Resident rates can be used from second year onwards ... been there, done that and if the employer holds 15% you can't do nothing until the NOA comes.

after all employer is responsible for clearance of unpaid taxes of their employees.


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## SK85 (Jul 9, 2014)

Thank you so much ecureilx. By the way, this is my first time to work there and I got only EP. So that 15% tax is correct right?

Regards,
SK85


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## simonsays (Feb 11, 2009)

15% is maximum but if IRAS charged you the maximum they will return on the next assessment

go to www.Iras.gov.sg for online tax calculator


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## SK85 (Jul 9, 2014)

ecureilx, thank you once again.

Rgds,
SK85


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