Salary.sg – Your Salary in Singapore

The most accurate (arguably) income comparison tool on the island has been updated.

Once again, we take the data points from the latest Iras Annual Report 2008/2009 and produce the following tool that stack you up against all resident taxpayers.

In our view, the data from the Inland Revenue Authority of Singapore is much more comprehensive than data from elsewhere, not least because Iras has direct access to your auto-inclusion employers, CPF, CDP, properties, donations and what-have-you (all of which are probably used to verify and double confirm what you declare, if you need to declare anything at all).

Without further ado, enter your annual income for YA2009 and see how well you rank against all resident taxpayers in Singapore:

As you can tell, if you earn the same income as last year, you would have dropped a few notches. A $100,000 income would put you at the 81.4th percentile last year, but the same amount will only earn you a 79.9th percentile placing this year.

According to one measure of affordability, our houses are less affordable than major cities like Sydney, Toronto, New York and even Tokyo.

The mainstream media and HDB have (unsurprisingly) claimed otherwise and probably will give 101 reasons to support their arguments.

More annoyingly, without much hint of sympathy, the media reported that “buyers can be narrowly focused” and even quoted MP Jessica Tan as explaining that “since a flat is not a small investment, these people tend to be more choosy.”

But are our HDB flats perceived to be affordable, especially by younger people who are struggling to look for a nice roof over their heads?

A forummer in Salary.sg Forums made some excellent points (thanks, Husky!):

“Our Government defines affordability as not using more than 35% of your gross monthly household income to pay for the monthly installment.

Let’s look at the scenario for typical young couple that have recently graduated from University and been working for 2-3 years.

Combined monthly income: $7,000, take home pay = $5,600 (80%)
Amount that goes to Ordinary Account: $1,610 (23%)

Suppose they buy a flat at $600k. After emptying their Ordinary Account, they have to take a loan for $520k @ 2.6% over 30 years.

Monthly Payment = $2080 (about 30% of their gross household income)
From CPF, we have $,1610 (23% of gross income)
Cash Top Up: $470

Take home pay of the couple after topping up the cash component
= $5600 – 470
= $5,130

Sounds quite okay…

But… what if say, the wife kenna retrenched one day or wants to be a homemaker. Leaving the husband to finance the flat alone. Assuming the husband earns $4k monthly.

Monthly Payment = $2080
From CPF, we have $920
Cash Top Up: $1,160

Take home pay of the couple after topping up the cash component
= $3,200– $1,160
= $2,040

Is it a “comfortable” figure? We will come back to that again in a short while.

What HDB might say in response to my post…

1)They can always buy a cheaper flat.

The truth is there ARE flats costing more than half a million that are supposedly meant for applicants with household income below $8k. And if a couple earning $7k can barely afford it, who can?

2)Why do you assume they will get retrenched along the way? Why plan for an event that may not happen? If you think like that, you will never be able to afford a flat.

I am sure if you drive, you do keep a spare tyre in your car boot. No?

Further more, it used to be that households with a single income earner were able to finance a flat alone. The figures show clearly flats are no longer “as affordable”. I just hope our government will acknowledge it instead of dismissing our concerns with a wave of the hand.

The government is always telling us the importance of having children, staying near your parents and supporting them etc. We must also try to save and plan for retirement. Seems like mission impossible in Singapore nowadays. How to do that with $2,040? One of my friend told me he’s planning to get a car, cos his mother is getting old and he’s also expecting a 2nd child. I told him to forget about it. If the young couple in our example has a family car too, they have like $1,000 left per month!

3)Look, there are flats that cater to different budgets. We are going to repeat ourselves again, just get a cheaper flat! Maybe at a less central location. Don’t be picky!

Yah… we are going to buy something that will take us 30 years to finance. And we are not supposed to be picky… hmm… For Pete’s sake, we are not buying vegetables at the market, if the vegetables don’t taste good, just throw!

The reason why I am looking at flats in central location is because, my family lives at Toa Payoh, while my fiancee’s family stays near Outram. I just want a place near to them.

I am not looking at buying a luxurious condo. I just want a simple 4 room flat that is near to either on of our families! Is it too much to ask for?”

This will be a fair comparison of how good a wealth accumulator you are. Rather than comparing the dollar amount of your net worth, we will stack you up against others in terms of your net worth over income.

If a person makes $100k/year and has $500k in net worth, he’s definitely a much better wealth accumulator than another person who makes $500k/year but has only $1m in net assets (i.e. assets minus liabilities, which is the same thing as net worth).

The first person’s networth to income ratio is 5x, while that of the second person is a measly 2x.

So you have no more excuses. (Yes, you still have one – if you’re just starting out, you will need time to build up your wealth.)

What is your networth to your income ratio?

To calculate your net worth, you can use this net worth calculator. You can also treat you and your spouse as one entity, and combine both your net worth and both your incomes in the calculations.

According to the Straits Times (Sep 19), median home prices in 2008 were about 16.3 times the median annual income that year. The article never mentioned if 16.3x is a bearable or even realistic figure for individual households. Using ST’s median figures for 2008, if a household making $59,400/year were to buy a $970,000 condo, [...]

Don’t let mainstream media headlines like “Most top PSLE students stay in HDB flats” (link) mislead you into thinking that HDB kids are top students. All it takes is a sharp eye and a thinking mind to see the facts. Straits Times reader Mr Visakan Veerasamy wrote to the papers today: “The statistics given in [...]

We’ve updated our popular income comparison calculator. The data points come from Ministry of Manpower’s Report on Labour Force in Singapore 2008 released early this year. Take your annual income (including bonus) and divide by 12 to derive your “gross monthly income” when using this income benchmarking tool: Last year’s version of the tool is [...]

A forum letter to the Straits Times highlighted a different way to measure affordability. Based on Numbeo’s “house price to income ratio”, Singapore ranks below major cities like Tokyo, Barcelona, Milan, Dublin, Toronto, New York City, Geneva, Oslo, Rotterdam, San Francisco, Sydney, Vienna, Stockholm, Amsterdam, Zurich, Copenhagen and Berlin. This means: if we use all [...]

If you’re a working professional in your late thirties, the median gross salary in your age group is $5,048/mth. Managers in the same age group make a median pay of $6,500. This is according to the Ministry of Manpower’s Report on Wages 2008 (released middle of this year). Here are the stats for the various [...]

The following is the Salary.sg list of top primary schools for this year. Ranking is done based on the vacancies available after the all-important Phase 2B. Refer to last year’s ranking for details. The 6 schools in boldface offer the Gifted Education Programme (GEP). The other 3 GEP schools not in this top-20 list are: [...]

Congratulations to the latest batch of President’s Scholars. But like last year’s batch, not a single one of them will be doing a science or engineering related course. In a way, this confirms the doom of science and technology careers in Singapore. In fact, four of the six President’s Scholars this year will read Economics. [...]