Japan’s salary and benefits packages for expats have been identified as the highest in Asia, according to a recent report. The average expatriate package in Japan costs employers $370,183, as stated in the “MyExpatriate Market Pay” survey conducted by ECA International. However, this figure is 12% lower than the previous year due to the weakening of the Japanese yen, which has fallen 9% in 2023. Consequently, when measured in U.S. dollars, the costs for salary, benefits, and taxes all experienced double-digit decreases.
In the global rankings, Japan secured the second position, with the United Kingdom maintaining its position as the most expensive location for sending expatriates. This comprehensive study, which considers cash salaries, benefits such as accommodations or utilities, and taxes, aims to aid companies in benchmarking their packages against the market. Over 340 companies and more than 10,000 international assignees participated in the survey.
Asia saw an average increase of 7% in overall compensation for expatriates between 2021 and 2022, when measured in local currencies. However, expatriates in Laos, China, and Hong Kong received lower salary and benefits packages in 2022, also measured in local currency. This increase in local currency terms can be attributed to inflation, according to Lee Quane, ECA International’s regional director for Asia. He further added that some companies provide a cost of living allowance to protect the expatriates’ purchasing power from their home country when working overseas.
The rising cost of living in countries like Singapore resulted in a 4% increase in expatriate salary and benefit packages compared to 2021. Expatriate accommodation costs in Singapore witnessed a surge, leading to a 9% increase in the cost of benefits when measured in USD terms. Singapore has risen to become the 16th most expensive place globally to employ expatriates, with an average package cost of $258,762.
Due to fluctuations in currency rates, more than half of the locations experienced a decline in the total cost of packages when measured in U.S. dollars. For instance, expatriate salaries in China fell by 5% in USD terms in 2022 due to the strengthening of the yuan against major currencies.
The United Kingdom remains the most expensive location for sending expatriates, with an average package amounting to $441,608 in 2022. Employee benefits in the UK also increased by 4% to $167,594, making it the most expensive in the world, with salaries contributing less than a fifth of the total package.
The report highlighted that the strength of the U.S. dollar propelled the United States seven places higher in the rankings, placing it among the global top 10. Despite a slight decline in salaries, the total cost of the package in the U.S. increased by 6% to $272,770. Higher housing costs contributed to a 10% increase in the cost of benefits.
As the cost of living continues to rise worldwide, companies are advised to regularly review allowances for employees based abroad. This practice helps protect employee purchasing power and increases the likelihood of retaining critical expatriate employees.
In conclusion, Japan remains the top Asian country for expat salary and benefits packages, while the UK holds its position as the most expensive location globally for sending expatriates. Companies should adapt to the changing costs of living and prioritize reviewing allowances to support their expatriate workforce.
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