- The overall cost of employing a mid-level expatriate worker in Hong Kong dropped by USD 5 067 in 2020.
- The overall cost of an average pay package for an expatriate in Hong Kong is now USD 279 399, still one of the top 5 most expensive in the world.
- Japan overtakes the UK as the most expensive location, with the average expatriate pay package costing a total of USD 405 685.
Expatriate pay packages in Hong Kong dropped in 2020 by over USD 5 000, to a total of USD 279 399 while the cash portion of the package remained largely unchanged during the same period. This was one of the findings of the latest MyExpatriate Market Pay survey published annually by ECA International, the world's leading provider of knowledge, information and software for the management and assignment of employees around the world.
When considering the cost of employing an expatriate, companies need to factor in three main elements: the cash salary, benefits – such as accommodation, international schools, utilities or cars – and tax. To assist companies who employ expatriate staff with benchmarking their packages against the market, ECA conducts its annual MyExpatriate Market Pay Survey of pay levels for expatriates around the world, including benefits, allowances, salary calculation methods and tax treatment.
“The cost of employing an expatriate in Hong Kong was lower in 2020 than in previous years but this was indicative of a much larger global trend we saw in many countries across the world in 2020” said Lee Quane, Regional Director – Asia at ECA International. “The ongoing effects of Covid-19 were felt by many major economies in 2020 and this meant that the cost of overall expat pay packages dropped in over half of the nations included in our rankings. Cash salaries for expatriates in Hong Kong rose by less than 1% while employers were also able to benefit from lower accommodation costs in Hong Kong and reduce the value of financial support for housing in comparison to that provided to these expatriates’ predecessors.”
Asia Highlights
There were similar decreases in pay packages for expatriates in Singapore, where the average package dropped by USD 7 284, with salaries falling by an average of USD 1 169.
Quane said “As we’ve seen in many locations across the world since the Covid-19 pandemic began, expatriate pay packages in Singapore have taken a hit. Although it is now cheaper for a company to employ expatriate staff in Singapore through lower costs associated with benefits commonly provided to white collar expatriates, the workers themselves on average take home a cash salary which is USD 1 000 less than their peers earned in 2019. The good news for expatriate workers though is that, despite the drop, cash salaries provided to expatriate employees in Singapore are the 5th highest worldwide while the total package cost is only the 17th most expensive in our rankings. This means that it is relatively less expensive for a company to employ expatriate staff in Singapore in comparison to elsewhere while these employees still take home a comparatively larger salary than in many other locations.”
Expatriate pay packages also fell notably in China, by a total of USD 17 762 on average, with cash salaries dropping by nearly USD 3 000 from 2019.
Quane said “All aspects of the overall pay package have dropped for expatriate workers in China, with salaries dropping by USD 2 950 on average and the value of benefits provided falling even further by USD 8 141. The big drop in benefits costs is primarily due to expatriate-level rents falling in many tier 1 Chinese cities such as Beijing, Shanghai and Shenzhen and has thus resulted in China falling behind India in the global rankings.”
One of the largest drops in expatriate pay packages was seen in Thailand, where the average value of a pay and benefits package for overseas staff fell by just under USD 18 000 in 2020.
“Thailand has dropped eight places in our rankings and is now outside the top 20 most expensive locations to employ expatriate staff. We saw a big drop in the value of expat packages in Thailand in 2020, with salaries dropping by USD 3 462 on average and the value of benefits falling by over USD 8 500. This means it is now significantly cheaper for a company to employ a mid-level expatriate employee” explained Quane.
Taiwan bucked the trend seen in many locations in Asia as the overall cost of pay packages rose and entered the global top ten most expensive locations to employ expatriates for the first time.
“The cost of employing a mid-level overseas worker in Taiwan increased by USD 10 733 last year as all aspects of expat pay packages rose. The most significant rise was seen in the cost of benefits, over USD 6 500 more in 2020 on average, and this reflects the steep rise in rents which we saw there as a result of Taiwan’s success in mitigating the transmission of the Covid-19 virus. Furthermore, cash salaries rose by just over 1%. Although this was not a high rate of increase, it was higher than comparable locations in the region. Consequently, Taiwan has leapfrogged nations such as Korea Republic and Australia in our rankings and is now the tenth most expensive location to employ expatriate staff” noted Quane.
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Notes to Editors
The list of countries used in the rankings is based on countries which have cities appearing in the top 40 of The Global Financial Centres Index (GFCI). The GFCI has been produced since 2007 by commercial think-tank the Z/Yen Group in order to examine the major financial centres globally in terms of competitiveness. It draws on data from the United Nations, World Bank and EIU as well as over 29,000 financial centre assessments from an online questionnaire.
About ECA International
ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.
Partnering with thousands of clients on every continent, we provide a fully integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.
We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions – every time.
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About ECA's MyExpatriate Market Pay Survey
ECA's MyExpatriate Market Pay Survey looks at pay levels for expatriates around the world, including information on benefits, allowances, salary calculation methods and tax treatment.
The results, free to participants, enable companies to benchmark their expatriates' actual salaries against the market. More than 300 companies took part in the survey covering 160 countries and over 10 000 international assignees.
Figures used in this release were collected in the later stages of 2020 and refer to a Middle Manager position based on 80 ECA Points. ECA Points is a job evaluation system that measures the influence, scope and responsibilities of a job.
There are a number of ways in which salary packages for expatriates may be calculated. The information provided by participant companies in our survey relates to home and host-based salary systems as well as locally-hired and localised expatriates and expatriates on indefinite contracts.
Certain types of allowances are specifically excluded from the analysis in the reports. These are one-off payments such as allowances for outfit, furniture, disturbance and relocation.
Benefits values are based on standard ECA assumptions and have been derived from data in ECA's accommodation and benefits reports to provide an estimate of the cost of providing these benefits. The actual costs or allowances paid to cover these benefits vary widely according to each company's policy.
Tax figures used here refer to employee taxes and do not take company contributions into account. For ease of comparison, it is assumed that cash allowances are paid to employees to cover the cost of any benefits provided.
The accommodation figure is representative of the cost of housing two adults and one child. Utilities covers heat, light, water and telephone charges. Education assumes one child attending a local international school. The car figure covers annual running costs and is based on a standard cars value (2000 cc), depreciated over five years.
For further information, please contact:
Jack Firth
+44 (0)20 7351 5000
jack.firth@eca-international.com