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Post by bikeshoptx on Aug 25, 2017 15:30:06 GMT
So, I have received my offer but I am confused about the components.
The staff at ASC tried their best to explain it, but they made some contradictory points so hopefully the forum members can help me. Below is the excerpt from their e-mail, verbatim:
---- All premiums are tax protected:
ExPat premium
Overseas cost Difference
Travel allowance
Settling in allowance
NOT tax protected:
Base Salary
Bonus
----
So when they say "tax protected" are they saying that Aramco will pay an additional amount (outside of my offer letter) to either myself or the IRS or the taxable income that the premiums generate?
I'm asking this because the salary spreadsheet was not helpful at all. Can someone help me understand.
Let's assume for a moment that I am a single bachelor with an offer of $8k per month.
Annual (rounded figures): Base = $96,000
SAIP Target = $13,000 Expat Premium = $34,000 Overseas Cost Differential = $3,000 Travel Allowance = $10,000
My annual income will be $156,000 - the IRS allows $101,300 to be excluded as foreign earned income. So will I be paying taxes on the $54,700? Or will Aramco pay the tax-liability on the generated by the 34k+3k+10k? |
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Post by vpainter on Aug 29, 2017 14:00:27 GMT
You got it. That is correct.
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Post by bikeshoptx on Aug 30, 2017 14:11:54 GMT
You got it. That is correct. Sorry - please let me know which one is correct from the example above:
a) will I be paying taxes on the $54,700? b) will Aramco pay the tax-liability on the generated by the 34k+3k+10k?
Thank you
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Post by daoilman on Sept 13, 2017 22:25:33 GMT
In your example, you have zero bonus and your salary is under the foreign earned income exclusion. Therefore you can exclude all of that from tax consideration. Your other income will be tax protected. The company can handle it in a number of ways (eg. Pay you or pay the IRS directly). The only thing you need to worry about is your effective tax rate will be zero in your example.
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Post by dlane on Sept 14, 2017 1:20:42 GMT
I don't think it's that simple. You'll pay a hypotax (so you are paying tax) on your base salary and a "fully loaded" tax on your saip award. Then they run a tax reimbursement calculation at the end of the year and you'll end up getting money back or they'll take more money from you. In order to receive the tax protected allowances, you have to pay a hypotax on your base salary. so I don't believe you get the full benefit of BOTH the foreign income exclusion and tax protected income as the company is taking this into consideration when they calculate your tax reimbursement each year. this is standard practice for most companies though.
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JH
Member
Posts: 26
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Post by JH on May 13, 2023 6:27:11 GMT
Im an American and I am considering to join soon. I am terribly confused on tax question and need help urgently. PLEASE HELP. Say my Base is 150K, I pay into 401K 8K. Bonus SAIP 20K, Expat Premium:30K, Overseas cost differential 10K, Travel allowances: 25K. Therefore, my gross annual income will be 150 - 8 + 20 + 30 + 10 + 25 = 227. For 2022 Foreign Income exclusion is 112 and standard deduction for me is 26 K. Therefore, my taxable income is 227 -112 - 26 = 89 and tax liability is roughly 89*23% = 20K.
Question: Am I responsible to pay for the WHOLE 20K tax payment OR I am only responsible to pay the tax due to the base pay of 150K which is roughly say about 12K and Aramco pays the remaining 8 K?
How does this thing really work?
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JH
Member
Posts: 26
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Post by JH on May 15, 2023 16:21:27 GMT
I posted in different thread, maybe this is the right forum. I appreciate answers/advice from those who are already in KSA, are experiencing this when they file the tax with the accounting firm?
My tax questions are:
1) Curious, what is the acctg firm assigned? who pays for the service?
2) Per the offer letter they said Expat Premium and OCD are "Tax Protected Payment". Does it mean that Aramco will pay tax on these items instead of me?
3) What about EAP travel allowance, Repat travel allowance and bonus? Which items are tax protected and which is not?
4) From the spreadsheet they sent with offer letter, they withhold IRS tax. In addition, they also reduce the monthly paycheck by the hypho tax amount. As i understand it, hypho tax amount is the tax amount I would have paid had i taken up employment with the same Base pay in the US but since the employment is in the KSA, the tax will be less by $X, so $X is taken out from my paycheck, not sure i understand the logic there even though IRS withhold tax is taken out already. Will I be getting back the hypho tax amount? OR is my total tax liability is IRS withhold tax + hypho tax amount? Please advice if you know how this works.
JH
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Post by ghzhujwmao on May 15, 2023 19:18:15 GMT
bonus is not tax protected. All the others are.
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jrs
Senior Member
Posts: 379
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Post by jrs on May 15, 2023 19:32:03 GMT
bonus is not tax protected. All the others are. US payroll employees do pay some Federal income taxes on base & prem that’s higher than the foreign income tax exclusion, which is currently $120K per year |
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JH
Member
Posts: 26
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Post by JH on May 15, 2023 20:50:28 GMT
Thank you guys, Expat Premium was clearly said in the offered package as tax protected. However, it was silent on annual education assistance, EAP travel allowance and bonus. But, from the discussion here, I concluded that ONLY Base pay and Bonus are taxable, the rest are tax protected (i.e. Aramco will pay the tax on those items)?
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Post by ghzhujwmao on May 16, 2023 9:25:24 GMT
EAP, travel allowance, base pay, ex-pat premium, and bonus are all taxable. W-2 includes all these (except 401K contribution) as your income. Aramco reimburses the taxes for everything above $120K and standard deduction (except the bonuses). Certainly, the reimbursement may not match exactly the tax you should pay. One beautiful thing about Aramco 401K is that it takes after-tax contributions up to the limit, which is $66K for 2023.
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JH
Member
Posts: 26
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Post by JH on May 17, 2023 2:48:31 GMT
Hi Guys, Do you know what kind of Medical Insurance that Aramco provides for Americans Expat and wife (Cigna, Aetna, UHC, Buppa ?); and their kids who are in Universities in the US? Thnx again.
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JH
Member
Posts: 26
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Post by JH on May 17, 2023 2:50:50 GMT
test
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JH
Member
Posts: 26
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Post by JH on May 17, 2023 3:02:58 GMT
EAP, travel allowance, base pay, ex-pat premium, and bonus are all taxable. W-2 includes all these (except 401K contribution) as your income. Aramco reimburses the taxes for everything above $120K and standard deduction (except the bonuses). Certainly, the reimbursement may not match exactly the tax you should pay. One beautiful thing about Aramco 401K is that it takes after-tax contributions up to the limit, which is $66K for 2023. Thank you for the reply. In Summary: 1) ALL items of the payments are TAX PROTECTED ( i.e Aramco will pay all tax liability) except for Base Pay and Bonus which the employee has to pay. 2) I was surprised 401 is post tax . I always thought 401K is always pretax to shield for tax liability? Therefore, if this is the case, we have to pay tax on our 401K contribution? 3) 66K contribution for 401K? really? sounds a lot, but I like it. |
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jrs
Senior Member
Posts: 379
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Post by jrs on May 17, 2023 5:12:45 GMT
Hi Guys, Do you know what kind of Medical Insurance that Aramco provides for Americans Expat and wife (Cigna, Aetna, UHC, Buppa ?); and their kids who are in Universities in the US? Thnx again. Aetna and great covee! Everything done here at JHAH is totally free - no deductibles or copays |
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