Posted by
Molo Gwylo
16 yrs ago
I have looked through prior posts on expat packages and haven't seen this discussion, so I hope I am not repeating a prior thread.
I lived in Hong Kong in the late 90's and was able to negotiate a generous housing package while paying local HK taxes. I have been asked to go back (different company; competitor) and am about to start negotiations and thought I would survey expats to see if packages with housing and local taxes still exist.
Obviously, this applies to non-U.S. expats so I am appealing to the Brits, Aussies, Kiwis, Canucks etc. out there. Ideally I could get information on the size of the housing package relative to salary (or total comp for the bonus-based people). A ratio is fine if the dollar numbers are sensitive.
Greatly appreciated and thank all on this site as it has been an incredible resource for my wife and I as we contemplate our move (return for me).
Molo Gwylo
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cd
16 yrs ago
If you're paid in HK and are a HK resident, then you'd always pay local taxes. My husband gets a housing allowance, which is probably close to 80 percent of his take home pay. We would not be here if he didn't get a housing or schooling allowance as his take home pay is not enough to cover those things. Lots of our friends don't get allowances, but their take home pay is 3 or 4 times more than ours.
If I was you I would try and negotiate at least some housing, and definately a schooling allowance, as thats a real killer here.
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Thanks for your note. Your comments are as I had hoped. I know Americans generally get housing as a quid pro quo for having to pay U.S. taxes and I know that some British and other expat packages had in the past had tax equalization to their home country to compensate companies for the cost of housing. I'm glad to hear that the norm is housing with no additional tax consequences.
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traditional expat packages are rare these days but local packages from the right companies offer total comp pretty much equal to what you need for housing and schooling and hopefully a strong medical-dental plan. This component if you are a senior level player should equal around 40-50% your total comp before taxes.
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i agree that traditional expat packages are rare these days. most people would rather take the cash and spend it how they wish. by the sounds of things you are pretty senior, so you should be able get some nice perks, but the days of 2 round trip business class tickets to your home city per family member, club memberships, hardship allowance, are pretty much gone except for a few companies. welcome back to hong kong though...it is still a great place to live.
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Well it depends on which company and at what level they are hiring, multinational senior hires from overseas are almost always on expat terms.
If we compare the ratio of expats in Hong Kong today on expat terms to ten years twenty years and then 30 years there is probably a massive decline with every decade, and rather than cash being a motivating factor its two fold, one a lot more local Chinese do the jobs that would have been handled by expats in the past, and more importantly Hong Kong used to be a hardship post, that is just not the case anymore, in the days of the colony, the civil service was the biggest expat employer and they had to offer terms to people to come here which the private companies then copied.
Now there is no reason for mid or junior managers to get housing, their kids private education paid for, and trips back home and club membership just to attract them here. It is a global hub with a low tax rate, and on the tax basis alone many expats are attracted to come and work in Hong Kong.
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This is interesting information; thanks for responding. It has certainly armed me with better information to understand what I should be looking to incorporate in an assignment package. The internal discussions that I have had have been focused on the difference in living costs (i.e., demonstrably higher) versus the after-tax benefits of being in a lower tax jurisdiction. I am not looking to milk the offer for perks, but want to make sure that I am treated fairly relative to other mid-to senior level folks and maintain a reasonable standard of living in Hong Kong.
In fact, the ratios mentioned above would exceed my expectations in terms of housing while paying local taxes and should help me find a win-win solution. If anyone else is willing to provide guidance on ratios of housing to compensation it would be very helpful.
Thanks again for the assistance, this has been excellent. My wife and I are looking forward to the transition.
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When you are negotiating, I think you are also entitled to ask for some salary differential based upon Hong Kong being something of a hardship posting, compared to wherever you are based now.
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Woods99 says: " I think you are also entitled to ask for some salary differential based upon Hong Kong being something of a hardship posting, compared to wherever you are based now."
Hardship ? LOL, compared to where ? I don't think that western expats experience any "hardship" here in comparison to anywhere else. Let's get real, most of us are here due to the lack of hardship in this wonderful city !
Molo - try to think of quality of life rather than HK$ to US$ conversion. HK is an amazing city, you won't experience any 'hardship' here.
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Thanks for this. One of the reasons I am seriously considering moving back was my fond memories of the city and the vibrant expat community. As a matter of fact, I actually flew my now wife to Hong Kong and proposed at the Peak. Hong Kong is a special place and I do miss it, which was why I was excited when my company asked me to think about moving. The information I had requested here was simply to arm me for a discussion next week on an assignment package. I appreciate all of your help.
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JerryC,
It is one thing to have stars in your eyes, it is another thing entirely to negotiate a salary package.
Of the several big cities that I have lived and worked in, Hong Kong would have to have been the most difficult in several respects. Firstly, the long, hot, humid, summers. Secondly, the pollution. Thirdly, the over-crowded and not very pleasant public spaces. Fourthly, the relatively tiny living accomodation - at least compared with other places I have lived. Fifthly, the fact that my partner could not work there. Sixthly, the absence of decent surfing beaches - and the fact that it took two years before I stepped onto real grass (played a game of social cricket at the Cricket Club).
Yes, Hong Kong has its advantages, particularly financially - and a lot of expats are better off there than in their home countries, if they can put up with the disadvantages.
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I think hardship is really a matter of individual perspective. When I said hardship I meant it in the sense that It was really until probably the mid seventies to early eighties when you could really say Hong Kong was a first world city. Though I am pretty sure it was much later that it was defined as a first world city based on a variety of factors, such as GDP per capita, infrastructure, health statistics etc etc.
In that sense in previous decades what companies or the Hong Kong government were doing was trying to recruit people to move from the developed to the developing world, which is no longer the case.
It is perfectly reasonable if asked to move to the SAR by your employer to look at all the things that woods99 has mentioned and asked to be compensated for those things.
Senior hires look at a number of things most notably pollution and lack of available places at international schools for their children, when they reject the move, which has been an emerging trend over this last decade and something the SAR government needs to do something about, if it wants the city to stay competitive.
Hardship is personal thing, some people may hate the population density of Hong Kong, its high humidity, small living spaces and in the urban areas, a lack of greenery, and when compared to life in other cities that existence may be harsh.
In the strictest sense of what I was saying that is not what I meant but it certainly could mean that.
What I meant is the attitude towards moving to a place like Hong Kong has changed over the years, you don't need to convince people that they are moving to the third world or a developing country anymore. That does not mean they may find the prospect of a move attractive for a variety of reasons that have been mentioned.
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Molo Gwylo, rather than wait two years you may step onto the grass of my lawn if you so desire.
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The only hardship you must consider is the pollution. I am very happy with HK otherwise. Given this issue is going to get worse I would cap your stay for max. 3 years if you have children. Enjoy!
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