Expat pay falls in many asian locations

Japan has overtaken the UK as the world's most expensive location in which to base expatriate workers, according to a new report.

David Sapsted

26 August 2021

The average, annual cost of to employers of a mid-level expatriate worker in Japan has reached $405,685, according to the latest 'My Expatriate Market Pay' report produced by international assignments firm ECA International, which concentrates on expat costs in Asia and is based on the 2020 survey.Costs in the survey are based on three main elements: the cash salary; benefits such as accommodation, international schools, utilities and transport; and tax.Analysing last year's data, the report found that, Japan aside, costs in many Asian nations had dropped, falling by just over $5,000 in Hong Kong last year, although the city remains one of the five most expensive places in the world for overseas assignments.The overall cost of an average pay package for an expatriate in Hong Kong stood at $279,399, although the cash portion of the package remained largely unchanged.“The cost of employing an expatriate in Hong Kong was lower in 2020 than in previous years but this was indicative of a much larger global trend we saw in many countries across the world in 2020,” said Lee Quane, Asian regional director at ECA International.

“The ongoing effects of Covid-19 were felt by many major economies in 2020 and this meant that the cost of overall expat pay packages dropped in over half of the nations included in our rankings."Cash salaries for expatriates in Hong Kong rose by less than one per cent while employers were also able to benefit from lower accommodation costs in Hong Kong and reduce the value of financial support for housing in comparison to that provided to these expatriates’ predecessors.”There were similar decreases in packages for expatriates in Singapore, where the average package dropped by $7,284, with salaries falling by an average of $1,169. The good news for expatriate workers though is that, despite the drop, cash salaries provided to expatriate employees in Singapore are the fifth highest worldwide while the total package cost is only the 17th most expensive in our rankings," Mr Quane said."This means that it is relatively less expensive for a company to employ expatriate staff in Singapore in comparison to elsewhere while these employees still take home a comparatively larger salary than in many other locations.”One of the largest drops in expatriate pay packages was seen in Thailand, where the average value of a pay and benefits package for overseas staff fell by just under $18,000, but Taiwan bucked the trend with the overall cost of pay packages rising as the island entered the global top ten most expensive locations.But in mainland China, expatriate pay packages fell by an average of $17,762 with cash salaries dropping by nearly $3,000 between 2019-20.“All aspects of the overall pay package have dropped for expatriate workers in China," said Mr Quane. "The big drop in benefits costs is primarily due to expatriate-level rents falling in many tier 1 Chinese cities such as Beijing, Shanghai and Shenzhen and has thus resulted in China falling behind India in the global rankings.”

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