Tax Rate in Singapore, Malaysia and Australia
| Singapore Tax Rates | ||
| S$0 – S$20,000 | 0.0% | |
| S$20,000 – S$30,000 | 3.5% | |
| S$30,000 – S$40,000 | 5.5% | |
| S$40,000 – S$80,000 | 8.5% | |
| S$80,000 – S$160,000 | 14.0% | |
| S$160,000 – S$320,000 | 17.0% | |
| S$320,000 and above | 20.0% | |
| Australia Tax Rates | ||
| A$0 – A$6,000 | Nil | 0% |
| A$6,001 – A$30,000 | 15c for each $1 over $6,000 | 0% – 12% |
| A$30,001 – A$75,000 | $3,600 plus 30c for each $1 over $30,000 | 12% – 22.8% |
| A$75,001 – A$150,000 | $17,100 plus 40c for each $1 over $75,000 | 22.8% – 31.4% |
| A$150,000 and above | $47,850 plus 45c for each $1 over $150,000 | 31.4% – 45% |
| Malaysia Tax Rates | ||
| RM0 – RM5,000 | 1% for amount over RM2,500 | 0% – 0.5% |
| RM5,000 -RM20,000 | RM25 plus 3% for amount over RM5,000 | 0.5% – 2.375% |
| RM20,000 – RM35,000 | RM475 plus 7% for amount over RM20,000 | 2.375% – 4.357% |
| RM35,000 – RM50,000 | RM1,525 plus 13% for amount over RM35,000 | 4.357% – 6.95% |
| RM50,000 – RM70,000 | RM3,475 plus 19% for amount over RM50,000 | 6.95% – 10.39% |
| RM70,000 – RM100,000 | RM7,275 plus 24% for amount over RM70,000 | 10.39% – 14.48% |
| RM100,000 – RM150,000 | RM14,475 plus 27% for amount over RM100,000 | 14.48% – 18.65% |
| RM150,000 – RM250,000 | RM27,975 plus 27% for amount over RM150,000 | 18.65% – 22% |
| RM250,000 and above | RM54,975 plus 28% for amount over RM250,000 | 22% – 28% |
Before I graduate, I was considering if I should work in Malaysia, Singapore or Australia. Working in Malaysia definitely not a problem. Working in Singapore is a matter of applying for a working permit. To work in Australia, I will need to apply for PR. There are a few things that I took into consideration before I made up my mind. Three major factors that comes to my mind were :
a) Starting Pay
b) Tax Rates
c) Living Expenses
Why do I only take these three factor into consideration ? These three factors will determine the amount you will be saving in a month.
Will talk about the starting pay. For a graduate programmer, in Singapore, you will be expecting to get around S$21,600 a year. In Malaysia for the same position, you will be getting around RM21,600/year. In Australia you should be expecting around AU40,000/annum. At this point of time Australia seems to be a better place to work as the starting pay is higher. But we have not take tax into consideration.
In Singapore, earing for S$ 21,600 will be tax at the rate of 3.5% and the net income will be S$20,844. In Malaysia, earning for RM21,600 will be tax at the rate of RM475 + 7% for amount over RM20,000. The net income will be RM21,013. In Australia, earning for AU40,000 will be tax at the rate of $3,600 plus 30c for each $1 over $30,000. The net income will be AU33,400.
After taking tax into consideration, you will still save more by working in Australia. Will write about living expenses on my next entry.
Co-Contribute to increase your super fund.
ATTENTION : This post is written for those whose income is less then $58,980. If you earn more then $58,980, don’t bother reading this as you are not eligible for the government co-contribution.
I got a letter few weeks back informing me that AXA has received the co-contribution from the Government for 06/07 financial year. It took them more then half a year to process the co-contribution.
For those who has started working, you should have heard about co-contribution. Although many has heard about it, how many people is actually is making used of the fund that is allocated by the government? The reason co-contribution exist is assist eligible individuals to save for their retirement. Under the co-contribution scheme, the Government contributes $1.50 to super for every $1 in after-tax or personal contributions by a low-income earner. The maximum co-contribution is payable to those earning up to $28,980 a year. The amount is reduced by five cents for each dollar of income over $28980. The maximum co-contribution phase out at an incresed upper threshold of $58,980.
Example :
If you are earning $40,000/year, with the maximum contribution, you will be getting
$1500 – ( ($40,000 -$28,980) x $0.05) = $949 if you contribute ($949/3 *2) = $633 within that financial year. You will need to contribute $77.75 in a month.
If you decide not to contribute, you should be thinking what kind of investment actually gives us 150% in return in a year? Do consider not to contribute only if you are making use of the $77.75 to generate you more then 150% profit in return. If not it will be better off putting the extra money into the super fund.
Part of our income has gone to tax and now government is putting an offer back to us. There is no reason why people does not grab this offer.
What does a cigarettes cost you ?
Everyone knows the side effect of cigarettes towards the health. But do you know how does it effect you financially ?
According to Thinkquest statistic, an average smoker smokes 15 sticks in a day. In a month it will be 450 sticks ( 22.5 packs ). Presume a pack of cigarettes cost $10. This means that $225 will be spend on cigarettes in a month.
What will happen 30 years later ? You would have turn $224,107.31 into ashes !! I did try cigarettes before. But due to the reason that i feel it is financially unwise to take up this habit, I decided not to continue. This means that I will be $224,107.31 richer 30 years later for just one simple decision that I have made now.
Say NO to Cigarettes!!!
Skype Phone
Thought of getting a phone for your new house ? Why not get a Netgear SPH200D Dual mode Cordless Phone that comes with Skype capability ? Thought of calling your love ones who uses a skype ? You can use this Netgear SPH200D that works like a normal phone. Connect the Dual-mode Cordless Phone Station into your Internet Router to enjoy making Skype calls. You can plug in your phone line to the base station to make land line calls from the same cordless phone. The base station can supports up to 4 handsets per household. Phone book can stores up to 500 contacts.
Now you have a Netgear SPH200D Dual mode Cordless Phone that connects to the phone line and the lan line. Now you would like to call your hubby who is out from the house using skype. How can you do that ?
You can buy him a “3 Skypephone” on prepaid as your valentine present. It gives you 150 minutes talk 24/7 anyone on 3 and 150 sms to any network including international SMS. You will also be getting 4,000 minutes (66 Hours 40 Minutes) to talk to you love ones on Skype and 10,000 instant message to your love ones on Skype. At this point of time you will not actually see the benefit of using Skype as calls for 3 to 3 is free. What if you have someone in UK who is using a skype mobile and you have a skype mobile as well ? Practically you can spend 2+ hours on the phone everyday. For user like me who spend $150 on international calls, skype mobile will be a great cost saving. Too bad at this point of time Malaysia is yet to support skype on mobile.
How to reduce your loan repayment period using an Offset Account?
An offset account is a saving account linked to a mortgage account so that the interest earned is applied to reduce the interest on the mortgage.
The biggest advantage of an offset account is that it enables you to radically reduce how much you owe by cutting the time it takes to pay off a home loan. By utilizing interest accrued to reduce the size of principle, the user of an offset account is able to avoid paying any tax on the interest earned on savings.
For example, say if you have $10,000 in your saving account and earning interest of 7.55% , the interest would normally be paid into your saving account there for you would have to pay tax on it. With an offset account, interest accumulated will be credited to your morgage account. This will create a saving which works to reduce the length of your loan.
Scenario A
Putting $100 / month a side in a high interest saving account for 20 years and 3 months will earn you $25,239.09 with annual 6.4% interest.
Scenario B
In scenario B, user puts the $100 every month in the offset account instead of the high interest saving account for 20 years and 3 months. The total repayment of $197,554.48 is needed to pay off the mortgage.
Analysis :
In scenario B, the user puts $100 / month in his offset account and he pay off his mortgage in 20 years and 3 months time.In total he would have paid extra $24,300. Total payment made by the end of the mortgage is $197,554.48.
In scenario A, he put $100 / month in his saving account with interest of 6.4%. After 20 years and 3 months, he would have gotten $25,239.09 in interest. After 30% tax, he would only have $17,667,36. By then only he decides to put all his money he accumulated in his saving account into his offset account. Total payment made by the end of the mortgage would be $232,915.76.
Conclusion :
For just putting $100 every month in your offset account instead of your high interest saving account, it actually saves you a whoop amount of $35,361.28 by the time you finish repaying your mortgage. Effectively with your mortgage account, you will only need a offset account that works similarly like your daily saving account. If your salary is $2,500 and is credited to the offset account, the daily interest calculated on the principle of your mortgage will be $2,500 lesser.
What will happen if you borrow to buy a car ?
BMW 3 series is one of the car that I have in mind. Looks elegant isn’t ? But this article I wont be talking much about this car. I am going to talk about the effect of borrowing to purchase this car. Retail price for 2007 BMW 320i E90 Executive is $58, 500. The price does not include dealer delivery, on road coasts or statutory charges. Presume the person who wanted to purchase this car has AU 8,500 cash on hand which will be used for the car deposit.
Based on the calculation obtained from commonwealth bank, the monthly repayment would be AU 1078.41 and the interest paid after 5 years will be AU 14,704.85. So end of the day the actual cost of the car would be AU 73,204.85 instead of AU 58,500.
Five years later
What will happen five years later ? If you decided to sell the car then, the market value for the car will only be less the AU 35,000. This value is derived based on 2003 BMW 320i E46 MY2003 sale value. Will it be too late to decide on property after that ? I bet it is. You can only make it for 10% for the house deposit if the cost of the house is 350k. Same amount of deposit and monthly repayment, five years later with 6.85% interest, you will be getting AU 88,838.54. That is before tax deduction for the interest. After tax deduction you will still be getting AU 84,140.98. By then you would be able to pay 24% for the house deposit that cost 350k.
Now still thought of borrowing to buy a car ? think twice.
Does people become the master to the card they own ?
Mastercard existed because the founder thinks that people who owns it will be a master to the card he/she own in his/her wallet. In Australia, for the year of 2007, credit card debt levels has gone up to $42 billion.
Some wise people pay off their full credit card balances every month, but there is a significant number who just make a minimum payment and wear the annual interest charges, which could be up to 18 per cent. I have heard of incident that every month people make minimum repayment and keep the rest of their savings in the bank. They feel that they are richer as they have savings in the bank but the fact is that they are 3 times poorer for doing so. They did not realise that the credit card company is charging them 18% where else bank is only paying them 6% in interest.
If you realise that you are still in debt with a credit card company, next thing early in the morning is to withdraw your savings out and clear your debt. It does not make you any richer for having savings in the bank and at the same time you are in debt with a credit card company. People who owns a credit card should asked themselves if they have the ability to clear all the debt they inccur within the grace period of the credit card company provides. If they dont, they should think twice before getting one as having one will only put them into debt.
Table below shows the duration it takes to clear off a AU 10,000 by just making the minimum monthly repayment. With just the minimum repayment, it takes 33 years and 2 months to clear the debt and interest inccur is more then AU 11,000. The question you should ask your self is why borrow AU 10,000 and pay AU 11,000 for interest ? If 10k can make you 50k, then probably it is worth paying for the 11k interest.
PB Foreign Currency Fixed Deposit
Target Audience :
a) Malaysian who have minimum savings of RM10,000.
b) Malaysian citizen currently working in Australia who is earning more then AU 30,000/ year with minimum saving of RM10,000 or its equivalent in foreign currency.
| 1 month | 3 month | 6 month | 12 month | |
| PBB | 6.25% | 6.75% | 7.15% | 7.40% |
| RHB | 6.20% | 6.50% | 6.70% | 6.80% |
| CIMB | 6.20% | 6.50% | 6.80% | 7.20% |
The table above compares different fixed deposit rates for different banks in Malaysia.
Audience A
It is straight forward that if you put RM10,000 in australian currency fixed deposit, you will get RM 740 after 12 months.
Audience B
Tax rates 2007-08
| Taxable income | Tax on this income |
| $1 – $6,000 | Nil |
| $6,001 – $30,000 | 15c for each $1 over $6,000 |
| $30,001 – $75,000 | $3,600 plus 30c for each $1 over $30,000 |
| $75,001 – $150,000 | $17,100 plus 40c for each $1 over $75,000 |
| $150,001 and over | $47,100 plus 45c for each $1 over $150,000 |
The reason stated that it is suitable for people who earn more then AU 30,000 is because of the fact that for each $1 over $30,000, 30c will be deducted for tax purpose.
With more then $30,000 annual income, if you have AU 10,000 sitting in IngDirect with 6.40% interest / annum, after a year, you will be getting AU 659.11 before tax deduction. After tax deduction will be AU 461.37 which means AU 197.74 is deducted for tax purposes. If AU 10,000 is placed in public bank foreign currency fixed deposit, with 7.40% interest / annum, you will be getting AU 740.00 after 12 months. Theoretically with AU 10,000, you are AU 278.63 richer for just choosing the right place to your cash. That condition is only applicable if the income obtain through interest is not taxable. The statement bellow mentioned that income accrued is exempted from tax.
With 30c tax for every dollar, interest rates needs to go up to 10.05% to achieve the same amount in Malaysia with 7.4% interest.
Although many malaysian works in Australia, I feel that they should not just limit their opportunity in Australia. Australia may be a good place to work but there are still much opportunity in other countries.
High Interest Savings Account
Have some spare cash that you can put a side in the bank ? Currently IngDirect is offering 7.00%p.a interest. But this will only last till end of december. After december it will only be 6.40%p.a. People who borrows money from the bank is making extra repayment just because of the interest hike up. People who save money in the bank should make use of this opportunity to make extra bucks from the interest hike up. The rest of the financial institution should revise their saving account interest rate as well since they are getting cash from their morgage, they should have a better deal for those who has saving account as well. Since 3rd December 2007, HSBC just revised their saving account interest rate from 6.6%p.a. to 6.85%p.a.
From Monday 3rd December 2007, you will enjoy a high interest rate of 6.85%p.a.* every
month you don’t make a withdrawal. There’s never been a better time to save!
| Reach your savings goals sooner with these great features: |
-
Recent Comments
Cash on Lessons from the 1987 market… winsonlee on Suzuki Night Market winsonlee on Lessons from the 1987 market… Mark Crisp on Lessons from the 1987 market… roarus on Suzuki Night Market
Counter
