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Cost of sending expatriates to Singapore falls for international companies

- The cost of employing expatriates in Singapore is significantly cheaper than a year ago
- Expatriate pay packages drop further in Malaysia but rise in Hong Kong
- Japan becomes the most expensive place to employ expatriates globally

The average cost of employing an expatriate in Singapore has shrunk by over USD 12,000 compared to last year. 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, utilities 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.

The value of a typical annual compensation and benefits package for an expatriate middle manager in Singapore now is USD 223,095, down from USD 235,545 in 2016.

“Singapore saw one of the most dramatic falls in expatriate costs in Asia, with the average pay package falling USD 12,450. This is due to lower salaries being provided as well as a fall in the costs of various benefits,” said Lee Quane, Regional Director – Asia for ECA International. “However, Singapore remains one of the 20 most expensive countries in terms of the cost of employing expatriate staff, despite having very low personal tax rates.”

Regional highlights

Malaysia saw an even bigger drop of USD 17,188 to the average expatriate pay package, keeping them rooted to the bottom of the 40-country list*. 

“The average cost of employing an expatriate at a middle manager level is now USD 150,868, less than half of what it would cost to send an expatriate to Japan. As Malaysia has much cheaper accommodation costs than its Asian neighbours and relatively low levels of tax, the country sits at the bottom of the rankings as the least expensive city included in the rankings,” Quane explained.

Elsewhere in Asia, expatriate pay packages in Hong Kong rose in 2017, after previously hitting a five-year low in 2016. The value of a typical expatriate pay package in Hong Kong is now USD 268,514, having slightly risen by USD 3,027.

Quane said: “Cash salaries offered to local staff increased marginally by an average rate of 4%, and the cost of benefits provided has risen significantly. Consequently, the total costs associated with employing expatriates in Hong Kong increased in 2017 versus 2016.”

In contrast, the average pay package of expatriates in China has dropped by around USD 6,000, to USD 276,387, as the gap continues to narrow between expatriates in Hong Kong and those on the mainland.

Quane said: “This is a result of exchange rates, as the dollar has strengthened against the Yuan. However, although average pay packages have fallen in China and risen in Hong Kong, China still ranks higher and is the fourth most expensive country in the world for a company to employ expatriates.”

Global highlights

In Europe, the United Kingdom has become significantly cheaper for companies to send staff to from abroad, slipping behind Japan in the rankings.

Quane said: “Over the past few years, we have seen a steady drop in the in the pay packages of expatriate workers in the UK when compared in US dollars internationally. The fall in the value of the British pound after Brexit has made it cheaper to send staff to the UK from abroad.”

In the Americas, Argentina has seen a big jump in the average expatriate package. The overall pay package has risen by USD 11,256, with most of the increase attributed to cash salary. 

“Argentina has seen high salary increases across the board over the past twelve months due to recent presidential and economic policies coming into fruition. There were pay increases in other parts of South America too, with cash salaries for expatriates in Brazil increasing by over USD 3,000,” said Quane.


 

Notes to Editors

* The list of countries used here 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 290 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 2016 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.

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