SURVEY ON EXPATRIATE SALARIES

A Survey on Expatriate Compensations and Benefits 1996 done by Foster Higgins, an employee benefits consulting firm, had some information of value to individuals who are, or may be, working overseas. 171 United States and Canadian companies that had expatriate employees responded to the surveys. Here is some of the highlights we noticed:

Q: Has the number of Expat employees increased? 63% said yes, 10% expect a decline, 60% expect an increase. Q: Are an Expat's salary and benefits costs higher than those of a local national? Yes. Average more than two and one half times as high as a local national. The range of differences were 23% in Holland to 283% in Korea. Q: Has your company adopted a formal policy for uniform treatment of Expats? 85% Yes Q: What are the goals of the companies Expat compensation program? 85% making the employee whole, 8% rewarding the employee for taking assignment, 3% matching or exceeding competitor benefits. Q: Does your company pay an allowance to Expats if the cost of goods and services is higher in the host countries than in the home country? 93% yes. The amount of the allowance is based on the difference between the cost of a market basket of standard goods and services in the host country and the same market basket purchase in the home country. The allowance is typically adjusted when exchange rates change significantly. Q: What is the average allowance for cost of living adjustments? 24% of salary. Q: Does the allowance for cost of living adjustments vary from country to country? Yes. Allowance are paid on percentages based on salary. Japan 50% Belgium 24% Hong Kong 29% Germany 24% Mexico 27% France 22% Singapore 25% United Kingdom 22% Holland 20% Australia 10% Q: Does your company provide other types of special allowances? Yes - 93% housing allowances 76% educational allowances for children 58% hardship allowances, conditions uncomfortable or dangerous 8% reward for taking assignment. Q: How is your company controlling Expat costs? Make sure benefits are not excessively rich. Be sure assignment fulfills a clear set of business objectives. Use of destination pricing when Expats are paid as citizens of the host country, with special allowances or tax protection. 11% of surveys use destination pricing and 25% said they may use destination pricing in the future. Q: Does your firm out-source benefits? 8% now does, and 32% may consider outsourcing in the future. Use of totalization agreements to reduce or control social security costs. Assignments under five years, will use the US Social Security system, when host country has a totalization agreement with the US. Many firms are requiring Expats with assignment for more than five years participate in the social security program of the host country.

Survey of salaries of US citizens living abroad