Recent Trends in Expat Packages
Recent Trends in Expat Packages
5 Oct 2021
In 2020, the Covid-19 pandemic caused havoc globally. Border closures and lockdowns in many parts of the world brought the globetrotting lifestyle of many expats to a screeching halt and often prevented companies from sending staff abroad when planned or needed. With these disruptions as the backdrop of 2020, it’s interesting to look at trends in the cost of expat pay packages.
“MyExpatriate Market Pay” survey, conducted by ECA International annually, provides valuable data to assist companies in benchmarking their expat packages against the market. Below are some of the key findings relevant to Asia from the 2020 survey.
Singapore
Although Singapore saw a fall in expat pay packages (both cash salaries and benefits), its cash salaries remained 5th highest globally. The overall cost of employing a mid-level expat in Singapore dropped by USD7,284 to USD225,171. This makes Singapore the 17th most expensive location globally for companies to send expats. With Singapore already ranked number 1 as the location with the best quality of living globally, this drop in expat costs is expected to further increase the country’s attractiveness to expats and companies alike as business travel eases in Singapore.
Japan
Japan overtook the United Kingdom as the most expensive location to send expats to, with the average expat package costing USD405,685. ECA International’s regional director, Lee Quane, said the increase in costs was primarily due to currency fluctuations, with the Japanese yen remaining steady relative to the U.S. dollar in 2020, yet there was also some inflation in other areas of the compensation and benefits package. For example, unlike many other locations covered by the report, housing costs rose in 2020 compared to 2019 in Tokyo. The Asian Tigers Japan office notes the upward trend in the cost of housing in Tokyo started several years ago, with competition for expat-level rentals increasing noticeably since around 3 years ago.
Hong Kong
Although cash salaries remained stable, expat pay packages fell in Hong Kong in 2020. The overall cost of employing a mid-level expat in Hong Kong dropped by USD5,067 to an average of USD279,399. Hong Kong remains one of the top 5 most expansive places in the world to post an expat worker.
China
With an overall decrease on average of USD17,762, China saw one of the larger drops in expat packages in the region. Cash salaries dropped by USD2,950 on average, while benefits fell by USD8,141. The drop in benefit costs was mainly due to a decrease in expat-level rents in many major Chinese cities such as Beijing, Shanghai, and Shenzhen. With the reduction in the cost of expat packages in China, its rankings fell below India.
Taiwan
Taiwan was somewhat of an anomaly in the region with an overall increase in expat package costs, moving the country up to the top 20 most expensive places to employ expatriate staff. The USD10,733 increase in costs for hiring mid-level expats in Taiwan may partly reflect the island county’s strong response to the Covid-19 pandemic.
Note: Expat packages are a sum of the basic salary plus benefits & allowances such as relocation costs, accommodation allowance, healthcare cover, education allowance for children, and an annual trip to the home country. When considering the overall costs of employing an expat, an employer must also factor in taxes.
If you would like assistance with shipping or relocation support, contact your local Asian Tigers office or reach out to us via our online contact form.
If you found this article interesting, you might also be interested in taking a look at: Timing Your Move; Learn From My Shipping Mistakes, and our series on Common Shipping Mistakes and How to Avoid Them – here you can find Part 1, Part 2, and Part 3.
