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is there or should there be a pay gap between public and private?

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Old 16-05-2017, 02:57 PM
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Lightbulb is there or should there be a pay gap between public and private?

or put in another way, if you currently work in public sector, and consider moving to private sector working on a similar role. obviously private sector job will be more demanding, stressful and unstable. how much pay increment do you think is acceptable?

vice versa, moving from private to public, how much pay-cut can you tolerate?

I heard from a friend, who worked in private for 20 years before joined public sector as a director, saying he took 30% pay-cut to serve the country. but on the other hand I know from other friend the pay difference isn't that much actually.

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Old 18-05-2017, 11:52 PM
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First we should establish an apples-to-apples comparison, and the best way to do this is by comparing the annual package, including CPF contribution. Why do I say this? Because in many cases nowadays, Private Sector pays higher basic pay, and few months' bonus. Some do not even offer 13th month. On the other hand public sector typically has low base pay, but typically gives 4 months' of PB and AWS bonuses.

In cases were Private Sector pays 13-14 months whereas Public Sector is 16-17 months, the difference is not just in take-home pay, but also Employer CPF contributions, which average about $1K a month. Plus, Public Sector gives 2% additional Medisave contribution (not a good trade-off if you are older, but good if you are young and single).

Based on my calculations, if one was previously on a 14-month private sector package and switches to a 16-month public sector package, he/she can afford to take about 15% take-home pay cut while still maintaining largely similar annual package.

Then, if on top of this one is willing to forego 10-15% in annual pay for Public Sector's greater job stability, then a take-home pay cut of 25-30% is very likely.

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