ECA's annual MyExpatriate Market Pay report found that the UK had overtaken Japan to claim top spot in the table, with the average, mid-level expat pay packages in Britain rising by £44,688 to £311,240 ($421,798). The report compiles data on the cost of overseas assignees' benefits, salaries and tax treatments in countries around the world. Benefits include the allowance to cover essential costs such as accommodation, international school fees, utilities and transport. 

Huge increase in expat pay packages in the UK in 2018

“The value of an average pay package for an expat in the UK saw a huge increase in 2018,” said Oliver Browne, ECA remuneration manager. “The rise was primarily down to a major jump in the cost of benefits that companies provided their overseas workers with, such as rental costs and international school fees."As the cost of expat-standard housing and rental prices increased throughout the UK, the value of benefits provided by a company to cover these costs therefore rose significantly by £23,881 on average.” 

Switzerland offers highest middle manager salaries

As far as middle managers' salaries alone were concerned, the highest in Europe were to be found in Switzerland, with an average of £66,940, compared to the UK's £55,948.“Swiss salaries are consistently towards the higher end of the scale but so are everyday costs in most Swiss cities," said Mr Browne. "Despite the higher prices, high salaries in the country mean locals are still well-off compared to their European counterparts. "Furthermore, because of low taxes and a smaller value of benefits needing to be provided by a company, it is still comparatively cheaper to send expat workers to Switzerland compared to the UK.”

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Related news:Fierce competition for tech and finance talent in the UK

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Middle East salaries still the highest in the world

However, the best expat salaries in the world were still to be found in the Middle East, with Saudia Arabia (£71,125) and the UAE (£69,280) leading the way.  “The Middle East has always offered extremely high salaries to overseas workers, and 2018 was no different," said Mr Browne. "However, the benefits offered in these nations are not among the most costly for an employer, and the average value of benefits offered actually dropped in both locations last year, while the lack of any personal tax means that the overall package works out to be a lot lower when benefits and tax are both taken into account.” Japan, which topped last year's table for the highest overall packages, was in second spot in this year's report with ECA putting the average provided by companies to mid-level employees at $386,451 a year. Japan also saw the biggest increase in expat package values last year, thanks to a stronger yen and steeper housing costs, said Lee Quane, a regional director at ECA.

China bounces back

China occupied third place on the overall table with pay and benefits packages significantly rebounding last year after a decline in 2017. The average package is now valued at £228,896, an increase of three per cent in the local currency. “Expats in China have seen a rebound after a bad year in 2017 that saw the value of the average package drop in all areas. The Chinese yuan experienced a better year in 2018 and due to a stronger economy and currency, the pay package for overseas workers in Chinese locations has now improved accordingly,” explained Mr Browne. 

USA: major decrease in personal tax requirements

Meanwhile, average pay packages in the United States – which came in at 11th place – dropped by $4,445 to an overall total of $250,028 (£184, 493) last year, "but this is due to a major decrease in personal tax requirements as salaries and benefits both increased," said ECA. Mr Browne added, “Major tax reforms, effective from 1 January 2018, meant that personal tax rates dropped significantly for many people working in the United States, especially for those on a higher income as many expats are. “The personal tax rate has dropped by 14 per cent on average, while the average expat net salary increased only slightly, by less than £1,000, meaning many companies will have found it a lot cheaper to relocate staff to the US last year.” 

Top ten highest expat pay package costs in 2018:

1. UK
2. Japan
3. China
4. India
5. France
6. Hong Kong
7. South Korea
8. Australia
9. Argentina
10. Turkey

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