Japan Is The Best Paid Asia Destination For Expats

Japan is the most expensive Asia Pacific Rim country for a company to relocate an expat, according to industry experts.

Middle management expats have a salary and benefits package that averages at more than £225,000, says ECA International’s latest MyExpatriate Market Pay Survey.

Expat packages include a range of benefits on top of annual salary, depending on the employer.

These can range from housing, medical care and ticket for regular flights home to schooling.

However, although expat packages are 11% higher than 12 months ago in yen, depreciation of the currency during the past year means the cost is 10% less in terms of US dollars.

India ranks third

Behind Japan came Australia and India at almost neck-and-neck.

“Managers often have difficulty in accepting that although India is one of the cheapest places to live, the expat benefit package loses a big slice in tax which makes relocating a middle manager expensive,” said Lee Quane, the firm’s regional director for Asia.

Middle manager expat salary packages in India average £178,000 a year with half the package taken in tax.

China and Hong Kong take fourth and fifth in the rankings. The notable difference between the two is the tax take in China is almost twice that in Hong Kong.

Generally, an expat pay package is based on salary for the same job in their home country plus adjustments for cost of living, tax and any other employer benefits.

“We are seeing companies are also starting to base expat salaries on the local rate for the job,” said the spokesman. “Companies are still offering extra benefits to make the bundle more attractive because they need to do so to capture the right talent.

Expat spending power

“However, benefits packages are generally reducing mainly because expat trouble shooters are flown in to deal with specific issues rather than signed on fixed term contracts.”

Expats also need to consider the currency their contract pays in. Companies may try to pay in a local currency which reduces the spending power of the expat package once it is converted into the expat’s home currency.

“Expats and companies both need to look carefully at the foreign currency exchange implications of any contract,” said the spokesman. “It’s not unknown for an employer to split the package payments between local and expat home currencies.

“The expat and the company both have to look carefully at the final amount of the package after tax to make sure they are getting a fair deal.”

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