Japan has emerged the most expensive location to send expatriates to, with the average expatriate package there costing USD 405,685. In Hong Kong, Malaysia, and Thailand, however, the average expatriate package is on a downward trend.
Singapore is now the 17th most expensive location globally for companies to send expatriates to, ECA International's MyExpatriate Market Pay survey has revealed, with the average pay package for a mid-level worker costing companies USD 225,171 annually. Using a global lens, Japan overtakes the United Kingdom as the most expensive location to send workers to, with the average expatriate package there costing USD 405,685.
For the unacquainted, the cost of an expatriate package, according to the survey, is more often than not based on three factors (which companies usually look at to formulate a package). They are: cash salary, employment benefits — such as accommodation, international schools, utilities, or cars — and tax.
Commenting on expatriate pay packages in Singapore, Lee Quane, Regional Director, Asia, ECA International said: "As we’ve seen in many locations across the world, expatriate pay packages in Singapore have taken a hit. This drop in pay packages is partly driven by lower costs of accommodation and other benefits commonly provided to white collar expatriates, but employees themselves are also taking home approximately USD 1,000 less in cash salary than their peers in 2019.
"Nevertheless, cash salaries paid out to expatriates in Singapore remain the fifth highest worldwide. This means that expatriates in Singapore are more likely to be paid more compared to their peers in other locations. Combined with its ranking as the location with the best quality of living globally, these trends serve to increase Singapore’s attractiveness to expatriates looking to move to the region and to companies looking to establish a regional hub in the country, given the cheaper cost of employing expatriate staff."
Looking at Southeast Asian counterparts, such as Hong Kong, Malaysia, Thailand, and Taiwan, the survey had the following results.
Expatriate pay packages in Hong Kong dropped by over USD 5,000 over the last year, to a new average total of USD 279,399. This was in spite of a slight average salary increase of USD 265.
While salaries for expatriates in Hong Kong rose by less than 1%, it was noted that employers were able to benefit from lower accommodation costs, and reduce the amount of financial support provided for housing compared to previous year.
Malaysia also saw a similar trend as many other nations in the world, with the cost of the average expatriate pay package falling by USD 2,813 in 2020 compared to the year before.
“The average mid-level expatriate in Malaysia saw a salary of USD 71,025 in 2020, which is slightly less than the previous year. The cost of benefits fell by a much more significant USD 1,952 on average, as rents dropped amid a lack of demand for expatriate accommodation, which had been brought on by the COVID-19 pandemic and restrictions on international travel”, Quane explained.
Continuing the downward trend is Thailand. According to the survey, Thailand witnessed one of the largest drops in expatriate pay packages where the average value of a pay and benefits package for overseas employees fell by just under USD 18,000.
Thailand has dropped eight places in the rankings, and is now outside the top 20 most expensive locations to employ expatriate staff. Salaries for these expatriates dropped by USD 3,462 on average, and benefit costs fell by over USD 8,500.
Be that as it may, Taiwan bucked the trend. The nation entered the global top ten most expensive locations to employ expatriates for the first time as the overall cost of expatriate packages rose in the market.
"The cost of employing a mid-level expatriate in Taiwan increased by USD 10,733 last year as all aspects of expatriate pay packages rose. The most significant rise was seen in benefits costs, which surged by USD 6,500 on average off the back of a steep rise in rents in the local housing market – a result of Taiwan’s initial success in mitigating the transmission of the Covid-19 virus.
"Furthermore, cash salaries rose by just over 1%, which, despite not being a high rate of increase, was still higher than comparable locations in the region. Consequently, Taiwan has leapfrogged nations such as South Korea and Australia in our rankings, and is now the tenth most expensive location to employ expatriate staff", Quane added.
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