This article was written exclusively for Expat Network by Salary Expectation
Look at your current net salary in the currency of the country where you live now. Before you agree to a salary in an overseas location, compare the amount to what it will be worth in the country you are considering accepting a job. Once you have a side-by-side comparison and financial value, you will be able to determine the minimum take home pay you will need to accept in the foreign country that will allow you to maintain the same standard of living in your current country.
Cost of Living Comparison
Consider not only the cost of living in your current location but also the cost of living in the place where you will be working abroad. Before you sign on the dotted line or agree to a long-term commitment in a faraway land, understand exactly what expenses will be handled by your company and which expenses will be your responsibility. Will your package include selling your current home, packing, moving expenses, or expenses for a spouse or other family members?
Don’t just look at the major expenses, like housing, food, and transportation costs. Also, consider the day-to-day expense of items you currently use everyday. For instance, how much does clothing cost? What about cleaning and other household or hygiene supplies? Begin with an item you typically buy and know the price of, like a cup of coffee and then price shop other necessities before you go. The difference could be an eye-opener and alarming, or you may be pleasantly surprised at how much more your money will be worth.
Better Your Standard of Living
Don’t just be satisfied to make an even exchange in salary. Instead, step it up and calculate your salary for a higher standard of living. Figure what salary you will need to receive to allow you to shop in more uptown and costly stores. To do this, look at high prices in the city you are looking into moving to for work. Compare these prices to average prices in the city where you live now.
Weigh Your Losses
In addition to what salary you will be receiving, also consider what you will be giving up to accept this position abroad. For instance, if you are single and have no commitments, it’s a great opportunity to save money and launch a new adventure and career. However, if you are married and have children or are in a relationship with someone, or own a home, you will also want to weigh the difference of what you will gain in salary compared to what you or they will be giving up.
Understand Your Visa, Insurance and Tax Rates
Before you settle into a new country for work, it’s very important that you fully and completely understand your visa, how much time to allow for applying and receiving the visa, work permits, what insurance is required, and the tax rates. If you plan on driving while abroad, be sure to find out ahead of time what the laws and requirements are for obtaining a driver’s license as well as who will cover the cost of a vehicle.
Also, check with an accountant to make sure you have all of your bases covered. For instance, of course, you will plan on the basis of paying taxes in the country where you work, but also learn what is expected when you return home. You may be required to report on the income tax that you have paid in the foreign country while abroad. Income tax is typically charged at a rate that grows higher when your income rises, so be certain of whether or not accepting an overseas position puts you in a higher tax bracket or provides you with non-taxable opportunities.
Getting credit and conducting your banking may be tricky in the new country since their laws and regulations will probably differ from what you are used to. Before you go, check out the local bank’s rules such as minimum balance requirements and fees as well as online options. Be sure to have one working credit card available by applying for a credit card from an international company before you leave your current home.
After you have had a chance to think about all of the issues that should be considered when assessing what salary will be required when you take up a role abroad, you will be ready to negotiate the best salary for you.
Co-Founder of Salary Expectation