An expat salary survey conducted by ECA International revealed that Singapore gives the highest tax breaks to foreigners in Asia Pacific. The average middle manager foreign expat in Singapore draw a pre-tax income of S$327,671 (US$235,500) a year. With the lowest income tax in the world, a foreign expat in Singapore is taxed about 13.9% at S$44,550 a year, according to the IRAS website. This tax rate for foreigners is less than half that of Australia.
Although countries like Japan and Hong Kong pay higher gross salaries to their expats, their higher income tax rank their after-tax income lower than Singapore’s. According to the survey, the benefits component of the expat package (e.g. international schools prices and cars in Singapore) are cost more than the take-home salaries.
More than 290 companies from 160 countries and over 10,000 expats took part in the survey conducted in 2016.
The GDP per capita in Singapore is among the highest in the world at S$73,167 a year, however its income gap is also among the highest with a gini coefficients of 0.463 – ranked second worst when compared to OECD nations. Among the bottom feeders are mostly Singaporean citizens, where 1.3 million Singaporeans (38% of the citizen population) earn less than a household income per person of S$1,800 a month.
Foreigners who are not om expat packages are also given luxury benefits not available to Singaporeans like a Minimum Wage of S$3,600 for Employment Pass holders and S$2,200 for S-Pass holders. There is no national Minimum Wage for Singaporean citizens. Foreigners are also excused CPF taxes which cost up to 37% of the income in total mandatory payments by both employers and employees.