Expatriate packages in Singapore and Malaysia hit five-year low

The cost of expatriate packages in Singapore and Malaysia have fallen 6% and 13%, respectively, over the past five years, according to the latest MyExpatriate Market Pay survey published annually by ECA International.

Singapore is ninth in the Asia Pacific regional rankings this year. The value of a typical expatriate package for Middle Managers in Singapore is now HK$1,827,300 (US$235,500).

The cost of an expatriate package has fallen in Singapore by six per cent in USD terms over the past five years.

“In local currency terms, although expatriate salaries continue to rise in Singapore, reaching the highest levels since our survey began, the benefits element has declined significantly. This has meant that the total cost of an expatriate package to companies in Singapore has fallen over the past few years in local and USD terms,” said Quane.

Malaysia, meanwhile, offers the region’s lowest total expatriate pay packages – with packages falling by 13 per cent in USD terms since 2012, falling behind Sri Lanka and Pakistan in the process. The average cost of a total expatriate package in Malaysia now lies at just over USD 168 000.

Japan has most expensive expat packages

Japan is home to Asia's most expensive expatriate packages, according to the latest MyExpatriate Market Pay survey published annually by ECA International.

On average, a package for an expatriate Middle Manager there is worth US$367,500. The total package has risen by a significant amount from last year’s total, by around 12 per cent, with the yen strengthening against the US dollar in the survey period.

Following Japan is Mainland China. A total package for an expatriate Middle Manager in China is worth around HK$2,191,900 (US$282,500) on average.

The significance of tax on the total cost of expatriate packages

Companies also need to be aware of the tax element of the package. This can considerably increase assignment costs, as in the case of India, where nearly half of the total expatriate package is consumed by tax. India has the third highest total expatriate pay packages in the region, at US$277,900.

When tax is excluded, India falls out of the regional top 10 locations.

When choosing an expatriate pay approach, companies need to be clear about the reasons behind the assignment so that their choice reinforces this.

Expatriate pay packages in Hong Kong have fallen to a five-year low, falling by two per cent since 2012 in USD terms. However, they are still the fourth highest in the Asia Pacific region. The value of a typical expatriate package for Middle Managers in Hong Kong is around US$265 500.

“Traditionally, Hong Kong has offered more lucrative packages for expatriates than China’s major cities,” Lee Quane, Regional director – Asia, ECA International. “However, in the past few years, rising cost of living and increased pollution in China made it more challenging to attract international talent and so packages continue to rise in local terms,” stated Quane.

“On the other hand, due to the yuan weakening against the dollar over this period, expatriate packages have declined in USD terms from last year’s totals. As a result, China remains attractive for foreign companies that need to send expatriates to the region as, although costs are rising in local currency, they have fallen in USD terms since our previous survey.”

The significance of tax on the total cost of expatriate packages

Companies also need to be aware of the tax element of the package. This can considerably increase assignment costs, as in the case of India, where nearly half of the total expatriate package is consumed by tax. India has the third highest total expatriate pay packages in the region, at HKD 2 155 600 (USD 277 900). When tax is excluded, India falls out of the regional top 10 most expensive locations.

When choosing an expatriate pay approach, companies need to be clear about the reasons behind the assignment so that their choice reinforces this. This can help organisations to decide whether they wish to create equity among home or host country peers – something that has become even more complex as companies manage increasingly diverse nationalities in and out of different markets. This will also need to be balanced against benefits and costs to the business.

 

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