What Applies To My Money On A Work Pass In Singapore?

What Matters First, Whatever You Earn?

Whether your pay is S$3,000 or S$10,000 a month, three things matter first:

• No CPF comes off your pay. Saving for later is up to you.
• Check whether you count as a tax resident. Living or working here 183 days or more in a year usually makes you one. On S$38,000 a year, a resident pays about S$445 before rebates, against S$5,700 at the non-resident rate.
• Sending money home? Compare the amount that arrives, not only the fee.

What Does No CPF Mean For Your Pay?

CPF is for Singapore Citizens and Permanent Residents. If you work here on an Employment Pass, S Pass or Work Permit, neither you nor your employer pays CPF. So the gross pay on your contract is the cash that reaches your bank, before income tax.

The flip side: nothing builds up for you in CPF for retirement, housing or medical bills. Plan to save for those yourself from your first payslip. The Monthly Savings Split helps you pick an amount.

Will You Be Taxed As A Resident?

For income tax, you are a resident for a Year of Assessment if you stayed or worked in Singapore for at least 183 days in the calendar year before it.

Under 183 days? You may still be a resident if:

• If your job runs across two calendar years and you are here for a continuous period of at least 183 days, you can be a resident for both years (this does not apply to company directors, public entertainers or professionals).
• If you stay or work here for three consecutive years, you are a resident for all three, even if the first or last year is under 183 days.
• A foreigner issued with a work pass valid for at least one year is also treated as a tax resident, but IRAS reviews this when you stop work and get tax clearance.

As a non-resident, your employment income is taxed at a flat 15% or at the resident rates, whichever is higher. Non-residents cannot claim personal reliefs. Other income, such as director’s fees, is taxed at 24% for non-residents.

• Yearly employment income: S$120,000
• Tax as a non-resident (flat 15%): S$18,000
• Resident rates on the same pay, no reliefs: S$7,950
• Tax as a resident with S$1,000 Earned Income Relief: S$7,835

In this example, being a tax resident is worth S$10,165 a year, before rebates. On very high pay the gap closes: from about S$369,000 a year, the resident rates on your whole pay come to more than 15%, and that is what a non-resident pays.

Employment of 60 days or less in a calendar year is exempt, except for directors, public entertainers and professionals. Tax returns are due by 18 April. If your employer is in the Auto-Inclusion Scheme, it sends your pay details straight to IRAS, so they are pre-filled for you. When a non-citizen employee stops work, is posted overseas or leaves Singapore for more than three months, the employer must notify IRAS (Form IR21) at least one month before and hold back money due to the employee until tax is cleared.

In your first or last year, the work-pass option in the Income Tax Estimator compares both bills for your pay.

Can You Use SRS To Cut Your Tax?

Foreigners can put up to S$35,700 a year into the Supplementary Retirement Scheme (SRS), against S$15,300 for Citizens and PRs. Each dollar is a tax relief, within the S$80,000 cap on total personal reliefs, but only in a year when you are a tax resident. Contributions made by 31 December count for the next Year of Assessment; banks may set an earlier cut-off.

Withdrawals from the statutory retirement age that applied at your first contribution are 50% taxable. Earlier withdrawals are fully taxable, plus a 5% penalty. A foreigner who has had the account for at least 10 years from the first contribution, and has not been a Citizen or PR for the 10 years before withdrawing, can take the whole balance out at once with 50% taxable and no penalty. For foreigners and PRs, the bank withholds tax at 24% on the taxable part, or 15% if total withdrawals that year are S$200,000 or less and there is no other income. Run your numbers in the SRS Optimiser, which opens with the foreigner cap chosen.

How Can You Save And Invest Here?

Banks set their own rules for opening accounts, such as which passes and documents they accept. To hold Singapore shares in your own name, or to buy T-bills and Singapore Savings Bonds with cash, you need an individual CDP securities account. SGX asks foreigners for a notarised and apostilled passport (certified, then stamped for use abroad) and a pass valid for at least six months.

MAS says T-bills are open to individuals aged 18 and above, including non-residents, with a minimum of S$1,000. Singapore Savings Bonds are open to individuals aged 18 and above, foreigners included, from S$500. You apply through a DBS/POSB, OCBC or UOB bank account linked to your CDP account, or through SRS.

To buy shares or ETFs you need a brokerage account. Fees differ a lot by platform and market, so see what one order costs on the brokerage comparison. Think about the day you leave too: check whether a platform still serves customers who move overseas.

What Health Cover Do You Have?

MediShield Life, the national basic health insurance, covers Singapore Citizens and PRs only, so it does not cover you on a work pass. Without it, you or your insurance pay for a hospital stay, so health insurance matters more.

Employers must buy medical insurance for Work Permit and S Pass holders. For Work Permit holders it must cover at least S$60,000 a year of inpatient and day-surgery bills. Employers do not have to insure Employment Pass holders, so read what your employer’s plan covers. When comparing plans, check the yearly claim limit, the hospitals and wards covered, outpatient cover, co-payments, exclusions, and whether cover continues if you change jobs or move.

What If Your Spouse Joins You?

Employment Pass and S Pass holders with a fixed monthly salary of at least S$6,000 can bring a legally married spouse and unmarried children under 21 on a Dependant’s Pass. A Dependant’s Pass does not let your spouse work. To take a job they need their own work pass, applied for by the employer, or a Letter of Consent to run their own business.

Until then, plan for two people on one income. MediShield Life does not cover your spouse either, so check whether your employer’s plan covers family. Their tax residency depends on their own days here. The Coverage Gap Calculator shows what your family would need if your income stopped.

Can You Rent Or Buy A Home?

You cannot buy an HDB flat on a work pass: new flats need a Citizen applicant, and resale flats need Citizens or PRs. You can rent an HDB flat or room with an Employment Pass, S Pass or Work Permit valid for at least six months, though some Work Permit holders face nationality limits. Many professionals rent a private condominium instead.

If you buy private residential property, foreigners pay 60% Additional Buyer’s Stamp Duty (ABSD) on top of Buyer’s Stamp Duty. Nationals and PRs of Iceland, Liechtenstein, Norway and Switzerland, and US nationals, can get Citizen treatment through an ABSD remission under free trade agreements. The Full Stamp Duty Calculator shows both duties for a price you enter.

What Does Sending Money Home Really Cost?

Businesses that send money overseas are licensed by MAS for cross-border money transfer. Check a provider on MAS’s Financial Institutions Directory before you use it.

Every transfer has two costs: the fee you see, and the gap between your exchange rate and the mid-market rate (the middle rate, with no profit added). A transfer with no fee can still cost more if its rate is worse, so compare the amount that will arrive and any receiving-bank charge. Our Sending Money Home comparison does this for India, the Philippines, China, Malaysia, Indonesia, Bangladesh and Vietnam.

How Big Should Your Emergency Fund Be On A Pass?

Your pass is tied to your job. If you leave your job, your employer must cancel your pass within a week of your last day, and you cannot work on it after that. Your employer can ask for a Short-Term Visit Pass so you can stay a while: up to 90 days for Employment Pass holders and 30 days for S Pass holders. Work Permit holders are usually flown home within 14 days. If you find a new job first, the new employer applies for a new pass without waiting for the old one to be cancelled.

Your notice period is set by your contract. Plan for a job gap plus the cost of moving home if no new job comes: flights, shipping and the rest of your lease. MoneySense suggests three to six months of expenses as a starting point; on a pass you may want the top of that range or more. The Emergency Fund Calculator shows how many months your cash covers.

What Should You Do In Your First Month?

1. Work out your take-home pay with Work Pass chosen.
2. Set a saving amount and an emergency fund target.
3. Check your tax residency for this year and next.
4. Decide on SRS before 31 December.
5. Check your medical cover, and compare transfer costs before sending money home.

General information, not advice. Check the official pages below before you act.