Cost of employing expatriates in Asia: Japan and China are the most expensive

Japan and China, placed second and third globally, are the top two most expensive places in Asia to hire mid-level expatriate workers, according to ECA International's analysis. 

The average cost of employing a mid-level expatriate in Japan stands at USD 383,582 per year, while in China the package price is USD 303,567, according to the latest MyExpatriate Market Pay survey published by ECA International.

Lee Quane, Regional Director – Asia at ECA International said, “The relative cost of employing expatriates in China fell considerably in 2019, with an overall drop of USD 6,637 on average. This is due to the weakening of the Chinese yuan over the past 12 to 24 months, as well as a decline in economic growth in 2019 as a result of the ongoing China-US trade tensions.

"This in turn has put pressure on the cost of benefits such as accommodation, which has dropped by an average of USD 3,435 in just a year."

With several countries in Asia tightening foreign worker controls, ECA International has found that the overall cost of employing a mid-level expatriate in Singapore now amounts to an average of USD 232,454 per annum (SGD 216,628) – a drop of USD 3,804 from the year prior. 

The average expatriate salary has also dropped by over USD 2,000, to USD 88,045 per annum (SGD 119,927), according to the latest MyExpatriate Market Pay survey published by ECA International.

However, despite the fall in costs, the country remains in the top 20 most expensive locations in the world to employ overseas workers, and the ninth most expensive location in Asia to employ expats - making it less expensive than other Asian countries such as Taiwan and Thailand. 

Overall, Asia continues to be an expensive location to send expatriate workers in general, with 11 of the top 20 most expensive countries in ECA’s global rankings being Asian countries.

The following is the top 10 list of Asia's most expensive countries to hire mid-level expatriates:

Quane shared: "Although the average value of an expatriate package has dropped in most locations in our rankings, there is no doubt that the costs of employing expatriate workers in Asia are relatively higher now as compared to other locations in the world – for example, countries such as Bangladesh and Vietnam have entered the top 20 most expensive locations in recent years.

"Further, of the eight countries in our list which saw increases in the cost of the average expatriate package this year, five of these were Asian nations."

For comparison, expatriate pay packages for mid-level staff in Hong Kong rose by over USD 8,000, with cash salaries alone rising over USD 1,000 on average. The average price of employing a mid-level expatriate worker in the city now costs USD 284,466, including an average cash salary of USD 88,126.

Quane added: "The gap between the cost of employing expatriates in Singapore as compared to Hong Kong has also widened in the past year to 18%, representing a continuation of a long-term trend."

He explained on this trend: "The key reason for Singapore’s more favourable ranking in terms of costs is lower taxes as compared to most of the other Asian locations in our rankings, and lower costs associated with benefits as compared to other high-cash salary locations such as Hong Kong.

"As such, this helps moderate the fact that cash salaries earned by expatriates in Singapore are the second highest in the region, where the average cash salary paid to a mid-level expatriate is USD 88,045 (SGD 119,927) – a cost that is only slightly lower than the Hong Kong average."

Global findings: UK, US and Europe

The UK remains the most expensive location to employ overseas workers in the world, with the overall cost standing at a whopping USD 413,194 per annum. However, the country’s average expatriate salary is significantly lower than many other nations, amounting to USD 73,849.

Quane explained, “Although the UK maintains the top spot in our rankings, the overall cost to a company has dropped significantly – by over USD 8,600 in total. This, of course, reflects the global trend, but it should also be noted that the average salary for an expatriate worker in the UK is, and has been, a lot lower than in many Asian nations – this includes Japan, Hong Kong and Singapore.

"Therefore, while the overall cost is higher for the company, expatriates working in the UK are not necessarily better off compared to their counterparts in other locations in the world."

When considering the cost of an expatriate pay package, companies need to factor in three main elements: the cash salary, benefits – such as accommodation, international schools, or cars – and tax. 

Outside of Asia, the highest rising nation in the rankings is the US, where the overall cost of employing an expatriate rose by USD 3,028 to a total of USD 253,056. This includes an average salary of USD 79,995.

In contrast, Sweden saw the biggest drop, with the cost of employing an overseas worker now amounting to USD 219,232 on average – a drop of over USD 20,000 in just one year.

Images / ECA International

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