Compared to the pre-pandemic era, working from home has become almost commonplace. After the periods of remote work imposed by the pandemic, Zoom meetings and digital tools have become part of our essential workplace arsenal. Aside from those working in essential services, most businesses had to shift their way of operations. Everyone, from the intern to the CEO, had to adapt to remote work.
Now that working from home is the new normal, it doesn’t seem that farfetched that working from anywhere is the next logical step. After all, if you can hold that Zoom meeting in your kitchen, why not hold while enjoying the sea breeze in Bali?
Yet, there is a difference between working from home and working from anywhere remotely. Here are the things that you need to know before considering remote work outside from your home country.
Working From Anywhere Affects Your Tax Residency
The key difference between working from home and working from anywhere is where you are physically located. For working from home, you are most likely still living and working in the same tax residency.
However, this is likely to change if you work remotely outside of your home country. Your salary is likely to come from a company based in a country that is different from the country you are residing in. This has implications on your tax residency, which is the residing country that you pay taxes to.
Let’s take the example of Singapore tax residency. Singaporeans who normally reside in Singapore are considered tax residents of Singapore. IRAS also considers the foreigners to meet certain criteria to be tax residents of Singapore for a particular Year of Assessment:
These criteria include foreigners who has stayed/worked in Singapore for at least 183 days in the previous calendar year; or continuously for 3 consecutive years; or foreigners who has worked in Singapore for a continuous period straddling 2 calendar years with a total period of stay (including the physical presence immediately before and after employment) of at least 183 days.
In general, if your stay in Singapore is less than 183 days, you will be regarded as a non-resident. Conversely, if you are a non-resident and exercised employment in Singapore for 60 days or less in a year, your short-term employment income is exempt from tax in Singapore.
For employees and freelancers, knowing your tax residency is important as it affects the amount of personal income tax you have to pay. This may mean curtailing or extending your stay in a country so that you remain a tax resident of your desired “home” country.
Working From Anywhere Affects Your CPF Contributions For Singaporeans
In Singapore, CPF contributions are payable for Singapore citizens (SCs) and Singapore permanent residents (SPRs) who are working in Singapore under a contract of service. This applies whether they are employed under a permanent, part-time or casual basis. This also applies even if the contract is signed overseas.
Employer’s CPF Contributions are payable if you are employed in Singapore but required to go overseas for work (e.g. overseas business trip, overseas training, etc). This also applies for your employee’s CPF contributions.
However, CPF contributions are not payable if you are employed to work overseas or seconded or posted to work overseas as wages for overseas employment do not attract CPF contributions.
Likewise, CPF contributions are affected if you work remotely in Singapore.
From 1 July 2021 onwards, if you work remotely in Singapore (even for an overseas employer and are in Singapore for personal reasons), CPF contributions are payable.
For Singaporeans, an extended stint of working remotely from anywhere could possible affect your CPF contributions and your overall compensation.
Working From Anywhere May Affect Your Medical Coverage
One thing that many who are considering working from anywhere should keep in mind is health insurance or hospitalisation and surgery medical coverage.
In Singapore, Singaporeans are covered under the national health insurance, MediShield Life and many Singaporeans also have additional coverage under Integrated Shield Plans. Singapore’s employment laws also mandate certain medical benefits for employees working in Singapore, such as medical leave and hospitalisation leave.
However, our health insurance plans may have limitations if we are located overseas. For example, most of the Integrated Shield Plans do not cover planned overseas treatment and limit the claims for emergency overseas treatment if covered. For workers with company medical benefits, these medical benefits may not translate to overseas coverage.
If you plan to work remotely overseas, you may need to purchase additional medical insurance. This may or may not be adequately covered by travel insurance, depending on the duration of your overseas remote work.
Working From Anywhere May Affect Your Employment Benefits
While part of our overall employment compensation package, employment benefits may be less visible than our salary remuneration. Working remotely can curtail our enjoyment and utilisation of these employment benefits.
For example, your company may have a great corporate gym membership package or corporate passes to local attractions. However, because you are based remotely away from the local office, you may not be able to enjoy these benefits. Likewise, your company may have a corporate insurance plan that covers claims for GP visits but that is limited only to the local clinics. Being based remotely means that you may not be able to access them.
Working From Anywhere Is An Employment Benefit That Shouldn’t Be Taken For Granted
That said, the ability to work from anywhere is an employment benefit in itself. This flexibility may be worth the trade-off in other employment benefits. For some, the lifestyle flexibility may even be worth a pay cut.
So, before pursuing a job that allows you work from anywhere, consider whether the trade-offs are worth it. After all, if the work can be done by you remotely, it may also be done by someone else in another part of the world.
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