Sign in

Hong Kong one of the few locations globally to see expatriate pay packages rise in 2019

  • The overall cost of employing a mid-level expatriate in Hong Kong costs a company an average of USD 284 466
  • This is an increase of over USD 8 000 since 2018, with cash salaries rising over USD 1 000 on average
  • UK remains the most expensive location to send overseas workers in the world, with Japan and China second and third respectively

Hong Kong expatriate pay packages continued to grow throughout 2019 while the cost of employing expatriate staff in most other locations dropped. The average cost of employing a mid-level expatriate worker in Hong Kong cost a company USD 284 466 (HKD 2 231 611), including an average cash salary of USD 88 126 (HKD 691 344). 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 an expatriate package, companies need to factor in three main elements: the cash salary, benefits – such as accommodation, international schools, or cars – and tax. To assist companies relocating 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.

“Hong Kong stood out against the global trend of lower expatriate packages in 2019 and is one of the only locations in our rankings that saw all aspects of the average package increase” said Lee Quane, Regional Director – Asia at ECA International. “Expatriate employees may be happy to hear that the average cash salary increased in 2019 – now standing at USD 88 126 per annum for mid-level expatriates – and is the highest in the region. However, though this increase is positive news when compared to the rest of Asia, and even the world, the rate of increase, at 1.2%, was significantly lower than in previous years. This was representative of the weakened global economy in 2019. Moreover, in light of the Covid-19 pandemic, the average expatriate package is unlikely to grow significantly for the foreseeable future, as pressure builds on companies to manage their costs.”

Asia Highlights

China remains the third most expensive location in the world in which to employ expatriate workers, despite the overall cost of employing an expatriate package in the country dropping by over USD 6 000, including a USD 2 262 drop in the average salary. The average cost of employing a mid-level expatriate in China now stands at USD 303 567 per year in total.

Quane said “The relative cost of employing expatriates in China fell considerably in 2019, with an overall drop of USD 6 637 on average. The main reasons for this drop are the weakness that the Chinese yuan has experienced over the past 12 to 24 months, coupled with the fact that the economy slowed in 2019 due to the ongoing China-US trade tensions. This in turn has put pressure on benefits costs, such as accommodation, which have dropped by an average of USD 3 435 in just a year.”

Singapore remains a fairly reasonably priced location when employing expatriate staff, with the overall cost of employing a mid-level expatriate employee standing at USD 232 454, which includes an average cash salary of USD 88 045. This reflects a drop of over USD 3 800 in the overall costs compared to 2018 though, with the falling costs of employing an expatriate in Singapore reflecting the global downward trend.

“In recent years, Singapore has fallen to 8th most expensive location in Asia for employing expatriate staff and costs are now lower than other Asian countries such as Taiwan and Thailand. Similarly, the gap between the costs of employing expatriates in Singapore compared to Hong Kong has widened further in the past year to 18%, continuing a long-term trend. The key reason for Singapore’s more favourable ranking in terms of costs compared with elsewhere in Asia is the low tax-related costs compared to most of the other locations in our rankings and lower costs associated with benefits compared with other high cash salary locations such as Hong Kong. This helps moderate the fact that cash salaries earned by expatriates in Singapore are the second highest in the region, where the average cash salary paid to a mid-level expatriate is USD 88 045, only slightly lower than the Hong Kong average” said Quane.

Asia continues to be an expensive location to send expatriate workers in general, with 11 of the top 20 most expensive countries in our global rankings being Asian countries. 

Quane said “Although the average value of an expatriate package has dropped in most locations in our rankings, there is no doubt that the costs of employing expatriate workers in Asia are higher relative to the costs involved in employing their peers elsewhere than they have been in the past. Countries such as Bangladesh and Vietnam have entered the top 20 most expensive locations in recent years and, although only eight countries on our list saw the average expatriate package increase this year, five of these were Asian nations.”

The UK was once again named the most expensive country in the world to hire expatriate workers, with the overall cost standing at a huge USD 413 194 (GBP 315 925). However, the average salary of USD 73 849 (GBP 56 464) is significantly lower than many other nations.

Quane said “Although the UK maintains the top spot in our rankings, the overall cost to a company has dropped significantly – by over USD 8 600 in total. This of course reflects the global trend, but it should also be noted that the average salary for an expatriate worker in the UK is, and has been, a lot lower than in many Asian nations, including Japan, Hong Kong and Singapore. Therefore, although the overall cost is higher for the company, expatriates working in the UK are not necessarily better off compared to their counterparts in other places in the world.”

Outside of Asia, the highest rising nation in the rankings was the US, where the overall cost of employing an expatriate rose by USD 3 028 to a total of 253 056. This includes an average salary of USD 79 995. In contrast, Sweden saw the biggest drop, with the cost of employing an overseas worker now 219,232 on average – a drop of over USD 20 000 in just one year.

-ENDS-

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.

ECA International: Mobility solutions for a world that’s constantly moving.

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 280 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 2019 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 
Tel: +44 0 20 7351 5000
Email: Jack.Firth@eca-international.com

Like this article? Share it... Twitter Facebook   LinkedIn