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Expatriate Pay Packages Rise In Hong Kong

Image Source and Copyright 2019 ECA International Image Source and Copyright 2019 ECA International

Hong Kong expatriate pay packages continued to grow in 2018, with the average package costing companies USD 276 417, including an average cash salary of USD 86 984. 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.

  • The overall cost of sending a mid-level expat to Hong Kong would now cost a company an average of USD 276 417
  • Expat salaries rose by an average of over USD 1 500 in 2018, after dropping in 2017
  • UK has overtaken Japan as the most expensive location for companies to send expats, Hong Kong drops one place to sixth

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 overall expat pay package in Hong Kong has risen by a total of USD 7 902 since last year, with increases to salaries and benefits making up the vast majority of the increase.

“After a slight drop in the average expat salary in 2017, the overall pay package for overseas workers in Hong Kong increased significantly in 2018” said Lee Quane, Regional Director – Asia at ECA International. “Salaries rose slightly by an average of just over USD 1 500 whilst benefits, including extras on top of the basic salary such as school fees and transportation costs, increased by over USD 6 000. The benefits offered as part of an expat’s pay package have always been high in Hong Kong as the small nation continues to be attractive to companies and expats alike. This high demand results in expat-level accommodation, international schooling and other costs being significantly more expensive than most other locations.”

Asia Highlights

Elsewhere in Asia, salaries increased for expats in Singapore by an average of USD 4 874. The overall pay package rose by over USD 13 000 to a total of USD 236 258, but Singapore sits in just 19th place in the 40-country list due to the low personal tax rates, making it a less expensive location for expatriates overall.

Quane said “Expat pay packages in Singapore increased across the board in 2018, with salaries increasing by nearly USD 5 000 and benefits going up USD 6 400 on average. However, personal tax only increased minimally, and tax-related costs still remain extremely low compared to most other locations included in our rankings, meaning that overall Singapore sits in 19th place. This is good news for companies with workers currently living in Singapore though, with cash salary and benefits remaining relatively high, and taxes staying low – resulting in less expense for employers when relocating staff to the country.”

Japan is no longer the most expensive location in the world to send expats, after being overtaken in the rankings by the United Kingdom.

“Despite an increase of over USD 30 000 to the average expat pay package from 2017, Japan has dropped back into second place in our rankings after overtaking the UK in 2017. Sending a mid-level overseas worker to Japan would now cost USD 386 451, still USD 35 347 behind the total cost of sending an expat to the UK. However, the pay package for an expat in Japan still increased by about 8.5% from last year and would most likely still be at the top of the rankings if not for the major rise in accommodation costs in the UK last year” explained Quane.  

The pay and benefits package of an expat living and working in China saw a significant rebound last year, after falling in 2017. The average package is now valued at USD 310 204, an increase of over USD 33 000 and pushes China up one place in the rankings to third.

Quane said “Expats in China have seen a big jump after a bad year in 2017 that saw the value of the average package drop in all areas. The Chinese yuan experienced a better year in 2018 though and due to a stronger economy and currency, the pay package for overseas workers in Chinese locations has improved considerably.”

Global Highlights

Middle Eastern nations Saudi Arabia and UAE continue to offer the best salaries for expats, with the nations now offering an average of USD 96 390 and USD 93 889 to mid-level expats respectively.

Quane explained “The Middle East has always offered extremely high salaries to overseas workers, and 2018 was no different. However, the benefits offered in these nations are not among the highest, and actually dropped in both locations last year, whilst the lack of any personal tax means that the overall package works out to be a lot lower when benefits and tax are both taken into account.”

The UK now offers the most expensive expat pay package, primarily due to major jumps in the value of benefits, and increases in personal tax rates. 

“Although the average salary rose by USD 3 717, the overall rise in the value of an expat pay package jumped by over USD 77 000 from 2017, with the cost of both benefits and personal tax rates rising by markedly large levels. The rise in accommodation costs was primarily responsible, with housing and rental prices rising throughout the UK. This was especially the case in Central London, a location that has long attracted high numbers of expatriate workers” said Quane.

The average pay package in the United States has dropped, but this is only due to a major decrease in personal tax requirements as salaries and benefits both increased.

Quane said “Major tax reforms, effective from 1 January 2018, means that personal tax rates dropped significantly for many people working in the United States, especially for those on a higher income as many expats are. The personal tax rate has dropped by USD 8 638 on average, whilst the average expat salary has increased by USD 1 814, meaning that, overall, many companies will have found it a lot cheaper to relocate staff to the US last year.”

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