Show me the money: Singapore expats paid cheaper than Hong Kong peers

Guess how much expats are being paid here?

Singapore lags Hong Kong when it comes to expat packages despite the city-state's reputation as world's most expansive city for foreign staff.

Singapore is the sixth most expensive location in the region for expatriate packages, according to ECA International. ECA's latest MyExpatriate Market Pay Survey shows that the value of the overall package for expatriate middle managers in Singapore is approximately US$257,000 per year on average.

Total expatriate pay packages remain lower in Singapore than those typically awarded in Hong Kong, which ranks fifth in Asia. 

However, these have increased at a faster pace in Singapore than Hong Kong over the year – largely due to the cost of benefits rising more quickly there. "An expatriate package usually consists of a cash salary; benefits – such as accommodation, international schools, utilities or cars – and tax," said Lee Quane, Regional Manager, ECA International Asia. 

"All three components need to be added to get an accurate idea of the overall cost to companies of providing this package. In Singapore, the most expensive part of the expatriate package is typically the benefits element: the value of these is second highest in the region after Hong Kong.” 

Pay packages for staff who are being relocated can be designed in a variety of ways. A growing number of companies are opting to pay expatriates based on the same pay system as local staff – particularly among those relocating junior staff. 

However, the most common approach when determining compensation levels for executive level staff mobilised around the world, both in Singapore and globally, is still to use the employee's salary in their home country as the starting point, then adjust for cost of living, any allowances provided by the employer, and tax. 

"A trend we see among companies in Singapore that base expatriate salaries on local market terms rather than home pay levels is that while they may still provide benefits beyond what a local national would receive - such as assistance with children’s education costs - they are nevertheless more likely to offer a leaner benefits package," continued Quane. 

“There are a number of reasons for this, but the main driver of this trend is the employment of expatriate staff on a permanent ‘one way’ basis rather than on a fixed length assignment."