- Hong Kong falls three places to eighth position in rankings.
- Salary and benefits packages rose by 1% in Hong Kong in 2021.
- UK reclaims status as location with highest expatriate packages where average expatriate salary and benefits package is over USD 440 000.
Expatriate pay and benefits packages in Hong Kong rose by a modest USD 3 800 in 2021, to a total of USD 283 000, a rate of growth which was amongst the lowest of all locations in Asia. 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.
“Pay and benefits packages for expatriate staff in Hong Kong recovered slightly in 2021 after a fall experienced at the start of the Covid-19 pandemic,” said Lee Quane, Regional Director – Asia at ECA International. “Cash compensation packages rose by a rate of 4.5% in USD terms, but this was lower than rates of growth when measured in USD seen in other regional economies such as Japan and Singapore. Furthermore, the costs of benefits continued to fall, as they did in 2020, with falls particularly in the cost of accommodation moderating the impact of the increase in cash compensation on overall employment costs.”
Elsewhere, expatriates in most other locations in the region saw their salaries rise at an average rate of 9%, while overall packages rose by 10%, in 2021 when measured in USD terms.
Cash salaries in USD terms rose by 9.5% in Singapore in 2021 and the overall value of a salary and benefits package rose by just over 10% to just under USD 250 000 per annum.
Quane said, “Although rates of growth were relatively modest in local currency terms, once package values are converted into USD, the total value of a salary and benefits package paid to an expatriate in Singapore recovered significantly in 2021. Salaries recovered after falling by an average of USD 1 000 per annum in 2020, while benefits costs also rose. For example, we have seen accommodation costs recover in 2021. As many employers provide financial assistance to their expatriate staff in meeting accommodation costs, the overall cost of employing an expatriate has risen by approximately 10%. However, in spite of this, Singapore has fallen in our rankings in terms of costliest places to employ an expatriate. It has fallen five places and is the 22nd most expensive location in terms of the salary and benefits provided to expatriate employees.”
In spite of relatively high rates of salary and overall package growth in the region, many countries also joined Hong Kong and Singapore in falling in the rankings. They included Japan, Taiwan, Thailand and Vietnam.
Quane explained, “While all locations in the region saw an increase in pay packages for expatriate staff, many nonetheless fell in our rankings as the rates of growth were lower than those experienced elsewhere. Japan, for example, saw the value of expatriate packages increase by 4% in 2021. Nevertheless, it is no longer the location with the highest expatriate packages worldwide. It has been overtaken by the UK, where the overall value of an expatriate package rose by over 9% in USD terms in 2021.”
Australia and New Zealand rose significantly in the rankings, by eight and 16 places respectively owing to a combination of the strengthening of their currencies, increased benefits costs and income tax changes in the past 12 months.
China remains the location with the third-highest expatriate packages in the region after Japan and India. “While its position in the rankings remains unchanged, cash salaries paid to expatriate staff increased by over 11% in 2021 in USD terms relative to the year before,” said Quane. “This is partly influenced by the relative strength of the renminbi but may also be partly explained by companies needing to pay higher salaries in order to attract and retain expatriate staff as China continued to impose its zero Covid policy throughout the year.”
Malaysia remains the location in the region with the lowest expatriate compensation and benefits packages even though cash salaries rose by 11% in 2021.
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 300 companies took part in the survey covering over 130 countries and over 10 000 international assignees.
Figures used in this release were collected in the later stages of 2021 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:
Lee Quane (Hong Kong)
Regional Director - Asia
Tel: +852 2121 2388
Tel: +852 3002 3761 ext 3766
Tel: +852 3002 3761