UK Pays Most For Expat Middle Managers, Study Says

By Fiona Moore, for 23 May, 2017

Middle managers sought by overseas companies will find the best raw pay packages, before expenses and tax, in the UK, while, in USD dollar terms, the amount commanded by a job in Hong Kong has fallen considerably.

The United Kingdom is the most expensive destination among the top-40 financial-hub countries for companies to employ expatriates from foreign companies, according to the MyExpatriate Market Pay survey, published annually by ECA International. The index is based on the cost of a typical cash salary; benefits, such as accommodation, international schools, utilities, and cars; and tax.

Over the past couple of years, it has become cheaper in USD terms to send expatriates to the UK due to the pound's decline in value. The cost of a typical expatriate package for Middle Managers in the UK is now GBP262,900 (USD 384,400), the highest among the 40 countries.

The total cost of expatriate packages in the UK, in US dollars, has fallen by 11 percent in the past couple of years. This is mainly due to a weakened pound against the US dollar making the UK comparatively cheaper. In local terms, typical Middle Manager expatriate salaries have increased by 3 percent over this period."

"However, the UK still has some of the highest personal tax rates in the world and the second highest cost for typical expatriate benefits," Steven Kilfedder, Production Manager, ECA International, explained. "The tax element is the most expensive component of an expatriate package in the UK by a considerable margin. Once tax is removed, the UK falls out of the global top-five most expensive locations in the world. The cost of providing benefits is also considerable, at around double the salary element due to high expatriate rental accommodation prices."

Expatriate packages for Middle Managers in Germany are the lowest out of all ranked European countries. The combination of comparatively low salary, benefits, and tax all contribute to Germany ranking 23rd out of the 27 locations in Europe that were included in ECA's rankings. The total cost of an expatriate package for Middle Managers in Germany is EUR177,800 (USD 202 800), having fallen by 15 percent over the past two years, also due to the euro's decline against the dollar.

The cost of an expatriate package has increased by two percent in the USA since the last survey, with the US rising in the rankings to 8th place. The value of a typical expatriate package for Middle Managers is now USD257,400.

"In the US, the costliest element of the package is the benefits provision, the fifth highest in our global rankings. To incentivise employees to accept an assignment to some countries companies will often grant additional allowances on top of the base salary that aren't necessary when sending staff to the US. In Hong Kong, for example, dangerous levels of air pollution, combined with high international school fees and accommodation costs, mean that companies have traditionally offered generous expatriate packages to attract highly sought-after talent," explained Kilfedder.

Japan is home to Asia's most expensive expatriate packages, second only to the UK on a global scale. On average, a package for an expatriate Middle Manager there is worth USD367,500. The total package has risen by a significant amount from last year's total, by around 12 percent, with the yen strengthening against the US dollar in the survey period.

Expatriate pay packages in Hong Kong have fallen to a five-year low, falling by two percent since 2012 in USD terms. However, they are still the fifth highest in the rankings this year. The value of a typical expatriate package for Middle Managers in Hong Kong is around USD265,500.

A total package for an expatriate Middle Manager in China is worth around USD 282,500 on average. Expatriate packages in China have declined in USD terms from last year's totals due to the yuan weakening against the dollar over this period, ECA International said. "China remains attractive for foreign companies sending expatriates here as although costs are rising in local currency they have fallen in USD terms since our previous survey," stated Lee Quane, Regional Director - Asia, ECA International.

Countries like Qatar, the United Arab Emirates, and Saudi Arabia sit near the bottom of the global rankings. Even though the highest global Middle Manager expatriate salaries are found in Saudi Arabia and the UAE, the lack of tax makes these among the cheapest locations; the value of expatriate packages in these locations are USD172,800 and USD188,400, respectively. Qatar costs foreign companies the least out of the ranked locations, at USD160,200 per year.

Tags: Expatriates | United Arab Emirates | Tax | Saudi Arabia | Employees | China | Qatar | United Kingdom | Fees | Tax Rates | Germany | Hong Kong | Currency | Standards | Japan | Expats | Europe |


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