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Expatriate pay and benefits packages rise in Hong Kong

- Expatriate pay and benefit packages rise in Hong Kong, despite salaries falling
- Japan becomes the most expensive place to employ expatriates globally 
- India overtakes China to become second in the regional rankings

Expatriate pay packages in Hong Kong rose in 2017, after previously hitting a five-year low in 2016. 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 expatriate pay package for a Middle Manager in Hong Kong is USD 268,514, a rise of USD 3,027 compared to last year.

“Cash salaries for expatriates in Hong Kong dropped last year whereas the cost of benefits provided has increased, meaning that it is now slightly more expensive for a company to employ expatriates in Hong Kong than it was 12 months ago” said Lee Quane, Regional Director – Asia at ECA International. “Although total costs associated with employing expatriates increased marginally in 2017 versus the previous year, cash compensation actually fell, whereas the cash salary packages offered to local staff increased by an average rate of 4%”.

Regional Highlights

The gap between Hong Kong and China has continued to close, with the average pay package for a Middle Manager expatriate living in China decreasing by approximately USD 6,000. 

Quane said, “China has seen the average expat pay package fall to USD 276,387, a drop of around USD 6,000. This is a result of exchange rates as the dollar has strengthened against the Yuan. However, despite the drop in pay packages in China and their rise in Hong Kong, China still places higher and is the fourth most expensive country in the world for a company to employ expatriates.”

 “The drop in expatriate pay packages in China has resulted in India moving up to second in the rankings after an average rise of a huge USD 15,230 for expatriates working in India. 

“The increase in India is mostly down to a surge in expatriate costs, such as accommodation, as a growing number of foreign workers drive up the demand of the limited expatriate-level resources that are available in Indian cities,” Quane continued.

Elsewhere in Asia, Singapore has slipped down the rankings as the price of employing expatriates falls. The average cost of employing an expatriate at a middle manager level of seniority in Singapore is now USD 223,095 which has fallen from USD 235,545. 

Quane explained, “Singapore saw one of the most dramatic falls in expatriate costs in Asia, with the average pay package falling USD 12,450 on the result of lower salaries being provided and also a fall in the costs of various benefits. However, despite the drop, Singapore is one of the 20 most expensive countries in terms of the cost of employing expatriate staff, despite the very low personal tax rates.”

Japan is the most expensive location to employ expatriate staff both regionally and globally. Conversely, Malaysia is now the cheapest location where expatriate costs dropped USD 17,188 on average to keep the country rooted to the bottom of the 40-country list*.

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

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 being seen in the cash salary. 

“Argentina has seen high salary increases across the board over the past twelve months or so due to recent presidential and economic policies coming into fruition. There were pay increases seen 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 2017 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 
ECA International
Tel: +44 0 20 7351 5000
Email: Jack.Firth@eca-international.com 
 

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