Gross and after tax income in highest paying countries
Have you been offered a great assignment abroad with an impressive expat benefit package? Check what you’ll get after tax.
It’s a well-known fact that professional expatriates tend to earn more than their peers back in their home countries. In part this is because they may pay less income tax and encounter fewer hidden taxes locally.
The latest ECA’s My Expatriate Market Pay Survey has revealed that there are specifically 10 nations where professionals are currently earning much more than global average.
So which are the 10 best countries to work in abroad if you just want more money?
The ECA’s My Expatriate Market Pay Survey has looked at pay levels for expatriates around the world, including information on benefits, allowances, salary calculation methods and tax treatment.
More than 320 international companies participated in the survey covering 170 countries and over 10 000 international workers. The survey ranked the countries by total expatriate package costs that companies offer to an average expat middle manager. An expatriate benefit package includes a salary, benefits that a company provides to its expat workers (housing, education, relocation costs, medical insurance, etc.) and taxes that expats have to pay in their chosen country.
Ten Best Countries to Work in Abroad for Gross Income
1. United Kingdom
The UK is one of the most powerful world centres attracting globally minded professionals, start-ups and skilled workforce. On average expat professionals in the UK get paid over $390,000 per year including all benefits. Unfortunately if you are British you cannot be an expat in your own country, so all those financial perks are inaccessible for you.
Working in Japan is an adventure by itself. Add to it a cutting edge infrastructure, stunning nature of Japanese islands, high quality of life and a brilliant expat benefit package, – and the country becomes enormously appealing. The cost of an average expatriate pay package for middle managers in Japan is about $375,289 per year.
China has overtaken Hong Kong in terms of expat benefit packages. An average value of a package for an expatriate middle manager in mainland China is around $276,400 now. The change happened mainly due to the increase of benefit costs such as medical insurance, for example. However, in secondary cities expatriate packages are not as high as in main destinations.
4. Hong Kong
Hong Kong is always ranking well in terms of expat packages with an average value of a typical package being about $271,400 in. What’s more, most expats benefit from the lower tax regime and enjoy a higher disposable income as a result. One of the largest employment sectors for expats in Hong Kong is finance – and most expats feel the economic situation locally is strong.
Those heading to work in Turkey can be pleasantly surprised by the size of an average expat packages for middle managers offered in this country. The pleasure of the Mediterranean lifestyle in this colourful and easily accessible for Britons country is considerably enhanced by a hefty $266,298 a year.
If you are moving down under for work through your company, you can cost your employer as much as $264,963 a year. It’s a second biggest expat package in Asia Pacific. Benefit costs in Australia are not among the highest, the taxes, however, will eat a lot of your package.
Expat professionals headhunted by international corporations or relocated by their company to work in Argentina can count on a healthy $255,648 benefit package per year. Although considerably lower than the top 3 packages, it is still above global average and represents a good value.
For Britons moving to work in France is almost a non-event travel-wise – so easy it is to access the country from the UK, that there are some Britons who actually commute to France.
Apart from accessibility there is another benefit of working in France – an average value of an expat package for middle managers is about $255,288 per year.
9. United States of America
For professional expats working in the USA can result in a benefit package of about $252,903 a year. So if you can get a high-ranking professional posting in the USA, you will be paid well. However, benefit costs and healthcare in particular are quite high.
The financial services industry is a big employer in Switzerland and it’s well known as a high wealth centre – however, the cost of living in Switzerland is also high and this can impact on an expat’s disposable income. An average expat benefit package in the country is about $246,971 a year.
The above list is a good starting point for those expat professionals who want to find the best paying country to work in. However, there is a hitch.
Actual Expat Salary = Expat Benefit Package Minus Benefits and Taxes
The above rating of the 10 best countries to work in abroad with seemingly best money opportunities for expats, however, has a catch – as it’s been mentioned earlier, an expat benefit package consists of salary, benefits and taxes. Often higher salary packages for expats are related to higher costs of living.
To understand which country offers the best pay, you have to take into account how much of the package is taken by a taxman, how much goes to pay your benefits and how much you are actually going to take home.
Look at the list from this perspective – and expat income in the UK falls to the second place after tax, and to the tenth after benefits are considered. So how is the ranking rearranged for income after tax?
Ten Best Countries to Work in Abroad for After Tax Income
1. Hong Kong
Both residents and expats are taxed at either a progressive 2% to 17%, depending on their income level, or a standard rate of 15%. So an average expat salary after tax is about $235,000
2. The UK
We all know the impact of UK taxation on our income. Expats working here get the same tax treatment as us locals. So, when it comes to after tax salaries, the UK loses its leadership and takes the second place with an average after tax salary of about $225,000.
Most expats in Singapore are likely to have to pay the progressive resident tax rates, just as in the UK, though there are more bands. The income tax rate varies up to a maximum of 22%. The first $20,000 earned is tax free. So, an average after tax expat salary is about $210,000
Japan uses a progressive income tax system made up of national, prefectural and municipal taxes, and as tax residents expats are taxed the same way as locals, so their average after tax salary is $195,000
5. The UAE
There is no income tax in the UAE; an expat salary on average is about $191.205 with no income tax deductions.
6. Switzerland and the USA
Both countries tax expatriates on the same basis as their citizens with various taxes applied. The result is an average expat after tax salary of just over $190,000.
7. China and Korea Republic
In China income from employment is taxed monthly at a progressive tax rate that caps at 45%. There is a monthly standard deduction for foreign nationals of RMB 4,800. Korea uses what is known as a ‘unitary concept’ which means that all income is added together and taxed at progressive rates. An average expat after tax salary in both countries is just below $190,000.
8. Saudi Arabia
Just like in the UAE, there is no income tax in this country. However, an average expat salary is lower, reaching about $172,000 a year.
National income tax rates in Turkey start at 15% and go up to 35%. As a result, expats get on average about $170,000 after tax.
Both residents and non-residents located in Argentina on a permanent basis, are subject to the same regular income tax rates starting from 5% and going up to 35%. Average expat after tax salary is just over $160,000.
As you can see, when considering income after tax, the list of the best countries to work in abroad is different to the total benefit package ranking. Tax-free countries like United Arab Emirates and Saudi Arabia with no personal income tax are now in top ten, with their expat salary packages being high by international standards.
Yet, there is one more adjustment to take into account: benefits that a company pays to expat professionals including accommodation, education, utilities, a car, etc.
In some countries accommodation, health insurance and educating children in international schools can cost a fortune. The UK is a typical example: take the benefits out of the after tax salary – and the average middle manager expat cash salary will be around $75,000 a year.
Hence, when considering which country will be more beneficial for you in financial terms, it is worth looking into taxation and a cost of living in different countries. It is also important to try and negotiate with your employer the best benefit package you can get.
Looking for a business-friendly jurisdiction within the EU? Read about 3 best EU countries to run your business from