TALENT MANAGEMENT

Cost of Sending Expatriates to the UK Falls for Foreign Companies

While the United Kingdom is the most expensive destination among the top-40 financial-hub countries for expatriates from foreign companies, it has become cheaper in USD terms to send employees there due to the pound’s decline in value.

This was one of the findings of the latest MyExpatriate Market Pay survey published annually by ECA International, the world's leading provider of knowledge, information and software for the management and assignment of employees around the world.

The cost of a typical expatriate package for Middle Managers in the UK is now GBP 262 900 / USD 384 400, according to the survey.

However, the UK still has some of the highest personal tax rates in the world and the second highest cost for typical expatriate benefits.

“The tax element is the most expensive component of an expatriate package in the UK by a considerable margin. Once tax is removed, the UK falls out of the global top five most expensive locations in the world. The cost of providing benefits is also considerable, at around double the salary element due to high expatriate rental accommodation prices,” explained Kilfedder.

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 organizations 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.

Expatriate packages for Middle Managers in Germany are the lowest out of all ranked European countries. The combination of comparatively low salary, benefits and tax all contribute to Germany ranking 23rd out of the 27 locations included in ECA’s rankings.

The total cost of an expatriate package for Middle Managers in Germany is EUR 177 800 / USD 202 800 – falling by 15% over the past two years, also due to the euro’s decline against the dollar.

Japan and China are the two other countries that are in the top 3 list of countries with most expensive expatriate packages.

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