Brexit and the falling pound have made Britain a cheaper destination for expat workers, says new research.
As most expat contracts are denominated in US dollars, exchange rates have meant costs in the UK have fallen in real terms as the dollar strengthened and the pound weakened.
The study, by consultancy ECA International, reveals the pay package for a manager in the UK dropped by almost $40,000 a year to $344,508.
The package covers a $72,104 salary, $148,116 tax, $124,288 for benefits to cover accommodation, international schools, utilities and cars.
“Over the past few years we have seen a steady drop in pay package values for expat workers in the UK when compared in US dollars internationally,” commented Steven Kilfedder, production manager at ECA International.
“The fall in the value of the British pound after Brexit has made it cheaper to send staff to the UK from abroad, resulting in Japan replacing the UK as the most expensive location to send staff.”
Japan tops list
Joining Japan to make up the rest of the top five most expensive destinations for expats are Hong Kong, India and China.
“India especially has become increasingly expensive for companies, with an average total package of $293,097 – a rise of $15,230 this year alone mostly due to companies having to pay a higher level of benefits and tax costs,” said Kilfedder.
“Although some of the top Asian countries, such as China and Pakistan, have seen a drop in the average expat pay package, they still continue to require among the most expensive overall packages in the world.”
Malaysia saw average expat pay fall by $17,188 to become the cheapest country among the top-40 global financial hubs covered by the study.
“Due to much cheaper accommodation costs and relatively low levels of tax, the average cost of sending an expatriate middle-manager to Malaysia is now approximately $150,868, which is less than half what it would cost to send an expat worker to Japan,” said Kilfedder.
Most expensive expat pay packages 2018
Here are the cities that top the ECA list with pay package costs in brackets:
- Japan ($356,224)
- UK ($344,508)
- India ($293,097)
- China ($276,387)
- Hong Kong ($268,514)
- USA ($254,473)
- Australia ($253,737)
- Turkey ($250,209)
- Argentina ($249,292)
- France ($249,058)
