Expats heading for Asia have to make a big decision about their pay packets – either follow the money or take a wage cut and go where your money buys more.
IT contractors working in Asia pick up average pay of just shy of £145,000 a year, but where you live determines whether this is an excellent salary or just enough to get by on., according to a study by ECA International.
The pay and benefits consultancy has polled expats in the Asia Pacific region for details of their salaries.
Those working in Japan earned the most – with an average £235,000 a year.
Next was India with an average £188,000, followed by South Korea and Hong Kong, both hitting around £145,000 a year.
Expat packages include benefits
Expat salaries are calculated in a number of ways, but most packages will include some sort of benefits package to cover costs such as accommodation, children’s education, utilities and cars and these can have a significant impact on the entire package.
In many cases, along with traditional market forces, an expat salary will also be affected by factors that typically have no impact on local market rates.
These include allowances that compensate for changes in cost of living and for the adjustment that international assignees have to make in living and working in a new location.
“To a certain extent it’s about whether packages include allowances designed to incentivise you to go to a location. Hong Kong and Singapore don’t because they don’t feel they need to incentivise you,” said ECA’s regional director for Asia, Lee Quane.
India had greatest salary hike
“But places like India, Korea, Vietnam and Thailand include some kind of hardship allowance – a pure financial incentive which makes sure that person is better off.”
India saw the greatest salary hikes, with average increases of 18%. This was partly the result of the Indian Rupee weakening considerably against the US dollar and other major currencies. India was followed by Vietnam and Indonesia.
In Hong Kong, a £145,000 salary can quickly go to international school fees, accommodation and other costs to the point where the amount given to an employee in benefits outweighs their take-home pay.
However, pay in Japan may be the highest but the country has one of the highest costs of living anywhere in the world.