Change at top for world’s most expensive expat destination
UK wages might have risen, but new analysis by ECA International shows average expatriate pay, benefits and tax in the UK fell compared to this time last year, making it cheaper to assign people here.
25 May 2018
The “dramatic” fall in pay packages in the UK has seen Japan become the world’s most expensive destination for internationally mobile workers, according to ECA International’s annual index, MyExpatriate Market Pay.The UK fell to second place behind Japan, just ahead of India and China.
Other news and features from Relocate Global:
Access hundreds of global services and suppliers in our Online Directory
Salaries and benefits for expatriates fall in the UK
The global mobility data provider calculates the value of a typical pay package for an expatriate middle-manager in the UK at $344,508. This is a drop of $39,898 compared to last year.The figure includes $148,116 tax, $124,288 for benefits to cover the cost of accommodation, international schools, utilities or cars, and a salary of $72,104.“Over the past few years we have seen a steady drop in pay package values for expat workers in the UK when compared in US dollars internationally,” commented Steven Kilfedder, production manager at ECA International.“The fall in the value of the British pound after Brexit has made it cheaper to send staff to the UK from abroad, resulting in Japan replacing the UK as the most expensive location to send staff.”Expat packages in Japan rise
Japan’s ascent to the top of the rankings reflects the Asia region’s wider dominance of the top ten most costly countries for expatriate tax, salaries and benefits, with Hong Kong the fourth country making the top five.“India especially has become increasingly expensive for companies, with an average total package of $293,097 – a rise of $15,230 this year alone mostly due to companies having to pay a higher level of benefits and tax costs,” Mr Kilfedder explained.“Although some of the top Asian countries, such as China and Pakistan, have seen a drop in the average expat pay package, they still continue to require among the most expensive overall packages in the world.”In Hong Kong, for example, the most expensive element of a pay package is the benefits provision, says ECA. This is largely due to dangerous levels of air pollution, combined with high international school fess and accommodation costs.By contrast, Malaysia saw a drop of $17,188 for the average expatriate pay package, making it the cheapest country of the top-40 financial hubs to send expatriates. “Due to much cheaper accommodation costs and relatively low levels of tax, the average cost of sending an expatriate middle-manager to Malaysia is now approximately $150,868; less than half what it would cost to send an expatriate to Japan,” said Mr Kilfedder.Other news and features from Relocate Global:
- Relocating in Europe with family: Best places to live
- Europe retains attraction for expat quality of life: Mercer
- Australia and New Zealand reveal appeal in new Mercer index
Strong dollar makes Europe more attractive for foreign business relocations?
Due to the dollar performing strongly against the euro in 2017, most employers sending assignees to European countries saw a fall in pay packages compared to the previous year.Sweden and Switzerland dropped out of the top ten most expensive countries, while the pay package in France has dropped by $15,478.However, Italy saw the biggest drop in cost of pay packages and is now the cheapest European country of the top 40 financial hubs to send staff. “The extension of an expatriate tax concession, part of a series of tax changes designed to make Italy a more favourable destination for investment, has significantly reduced the cost of sending staff to the country,” commented Steven Kilfedder.Middle East salaries remain highest in the world for expatriates
The Middle East saw little change, but expatriate salaries in the region remain some of the highest in the world – with Saudi Arabia and UAE in first and second place respectively when looking at the annual salary. However as there are no personal income taxes paid in Middle Eastern countries, all three nations continue to require cheaper total pay packages for expatriate staff than the majority of the top 40 financial hubs.Kilfedder concluded: “Middle Eastern nations have offered high wages for expats for a long time now and combined with the 0% tax rates, the Middle East is often considered a lucrative place of work for overseas staff. However, due to the newly-introduced 5% VAT tax rate in the region which will increase the cost of living, we expect to see rises in both the salary and benefits elements of expat pay packages.”Top ten total expatriate pay packages in 2018 (US$), according to ECA International
- Japan (356,224)
- UK (344,508)
- India (293,097)
- China (276,387)
- Hong Kong (268,514)
- USA (254,473)
- Australia (253,737)
- Turkey (250,209)
- Argentina (249,292)
- France (249,058)
Access hundreds of global services and suppliers in our Online Directory©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.
