UK Overtaken By Japan As Most Expensive Expatriate Country

What is the most expensive expatriate country? According to a newly published report, the UK is no longer the most expensive of the top-40 financial hubs. It now takes second place to Japan with middle management expatriate pay packages falling by an average of $40,000, reflecting the strengthening of the US Dollar against the GBP.

Global mobility experts ECA International (ECA) produce an annual MyExpatriate Market Pay report, which focuses on three main factors when looking at management pay structures: the cash salary, benefits – accommodation, education, utilities, cars – and tax. It provides key data to companies with expatriate staff, allowing them to set packages appropriately in the marketplace.

“Over the past few years we have seen a steady drop in pay package values for expat workers in the UK when compared in US dollars internationally,” said Steven Kilfedder, Production Manager at ECA International. “The fall in the value of the British pound after Brexit has made it cheaper to send staff to the UK from abroad, resulting in Japan replacing the UK as the most expensive location to send staff.”

The UK remains an expensive location for foreign companies with expatriate staff because of the high cost of accommodation and high taxes. Taxes account for the largest single cost to companies in both Japan and the UK.

Kilfedder said: “The tax element is the most expensive component of an expatriate package in the UK by a substantial margin. The cost of providing benefits is also considerable, at around double that of the salary element, due to high expat rental accommodation prices in London.”

Expatriate pay in Europe:

Across Europe as a whole, the cost of employing expat staff is falling. Italy offers specific expatriate tax concessions making it now the cheapest European country.

Expatriate pay in Asia:

Asian countries are still amongst the most expensive for employers and continue to offer the highest overall packages to foreign workers. Following Japan and the UK, the remaining countries in the top five expensive destinations are India, China and Hong Kong.

Expatriate pay in America:

There have been marked increases in the average expat pay package in Argentina. Higher cash salaries account for most of the average rise in the overall pay package of $11,256.

Expatriate pay in the Middle East:

This region continues to boast some of the highest expatriate salaries in the world – with Saudi Arabia and UAE leading the way. However, employer costs overall remain lower than in the majority of the top 40 financial hubs as taxes are not paid as part of expatriate packages.

 

The full report can be found here, together with more information about how it was compiled.