Salary negotiation - any advice?

I’ve been offered an exciting permanent position in HK after a long recruitment process. However, the salary proposed appears to be below what I will need to support my family. If there are any seasoned negotiators out there, I’d appreciate your guidance.


About me: I have around 15 years' experience in my field (publishing) and am currently a line manager of a small team. (The position in HK will be similar, though I’ll be establishing systems and standards, and ultimately building a team.) I have a partner and two girls, who will need to go to primary school. Because of my country's tax laws, I will probably have to pay additional tax of about 25% on my HK earnings.


The offer is 50,000/month, with a 10% bonus every 24 months, so $55,000 all up ($660,000/year). It includes medical insurance but no housing allowance, no relocation costs, and no trips home. 13 days annual leave. 44-hour working week.


Schooling for two at the cheapest international school (ESF) is likely to cost at least $15,000/month, my country's tax another $15,000, and accommodation at least $20,000. Then there’s the retirement savings scheme, which will take up $1,500, leaving $3,500/month for all other family expenses … just not doable.


The employer isn't aware yet that I have a family, but the offer still seems low. They may have based it on my current salary, but here I don’t have to pay for schooling, and accommodation is much cheaper.


1. Will they be expecting me to bargain hard, or if I go back and say I need $75,000/month ($900,000/year), will they gasp in horror? (My counter-proposal would leave my family with about $20,000 after school, tax, and accommodation costs, which doesn't seem excessive.) This organisation is hiring people from all around the world, so I’m guessing they’ll be expecting strong negotiators.


2. Should I expect them to bargain back and therefore add another 5% (eg, $79,000/month)? Is there anything else I should try to include in the package. I’m not too worried about relocation costs (we won’t bring a lot anyway), but how likely would it be to get more annual leave and/or a trip home? I will already be asking them to pay for a trip over before signing the contract so that I can explore school and accommodation options.


A few other Qs:


3. Is my accommodation estimate of $20,000/mth enough for a reasonable 2-bedroom apt of 800-1000 square feet, outside the centre but near the metro (eg, Po Lam/Clear Water way, or Chai Wan area)? Don’t need anything flashy, but something homely, especially for my kids.


4. The working day is 9am to 6pm. How reasonable would it be to request 6.30am to 3.30pm a couple of days a week to be able to spend some time with the kids in the afternoon? This is the agreement I have now, but flexible working hours are very common here.


5. I’m guessing there’s no such thing as time in lieu …? (You're probably laughing already.)


6. The organisation said that my partner will be permitted to work (need to clarify whether that’s automatic, or whether they will organise). Does anyone know if de facto partners (rather than spouses) are recognised?


7. If you leave HK, are you able to easily access the funds in the retirement savings scheme?


8. Are there any NZers out there with experience of the ‘resident for tax purposes’ law? Is there any way around that bar severing all our ties with NZ, eg, selling our house, closing our back accounts, and cancelling our life insurance?



I should reiterate that I’m really keen to join this exciting organisation, but the move needs to work for my family as well. Also, given that I have a pretty good deal at the moment, including work-life balance, the offer really needs to be strong enough for me to give it up. Apologies for the long post - and thanks!

50K is pretty doable, wont your "partner" be working and sharing expenses ?


3. you should be able to get reasonable accommodation within 20K target

4. should depend on what kind of work you do.

6. only "marriage" between a male and a female of human species is recognized.

7. yes you can withdraw when you leave HK permanently, thats what my agent told me, haven't had a chance to try it yet.


rest of the points, i really dont know, maybe someone else will shed some light.

Thanks very much Scorpio01. It surprises me that a family of four can live on $3,500/month (after housing, schooling, and tax expenses), but that's also good news. I imagine it would be tight. We're not luxury livers at all, but we do like to get out and explore. I've started looking at the public schools as a cheaper option to international.


Re my partner working, I'm just concerned about relying on that, particularly early on when the kids may not even be able to get into a school. (I hear waiting lists are up to a year long, so home schooling may be necessary initially.) I'm the main earner, he works in fitness about half-time, so his earning power is much lower than mine - a fifth to a quarter generally.


Thanks again.

not sure where scorpio comes from but living on 3500HKD is not doable. you would have to seriously compromise on housing or schooling.


major question though, when you refer to your partner are you married?? if not, he/she can only come to HK as a visitor and cannot work here until a company sponsors his/her visa on their own

Thanks cookie09. We can't really make those compromises, so it looks like I'll have to bargain hard. Any opinion about how much we'd need to live on after major expenses (schooling, housing, tax). $20,000?


In answer to your question, no, my partner and I are not married, but really only because there's no need to get married here (de facto relationships are of the same status). We're fine about getting married if we need to. If we do that, will he automatically receive permission to work?


Thanks again.

What's not clear to me is the nature of the hiring firm. I would guess it is an international firm with a large percentage of expat staffers? If it is mainly a local firm (owned and run by HKers), you may actually have a stronger bargaining position than with an overseas co, which will likely follow its policy for all expats. Unless, of course, you are to play an instrumental role for the co's growth. Indeed for a family of 4 to live on $3500 would be hard if you add additional expenses for kids and saving up a reserve for rainy days. I guess you will have savings already in place for contingency.


And you will HAVE to get married legally before coming to HK in order to secure a dependent visa for your partner at the same time you apply for your employment visa. BTW, HK has a decent fitness market. Finding a trainer's job should not be too difficult. Best of luck.

You know more than we do about how essential you are to the company but ask yourself, would you look favourably on someone who had just been offered a job and then asked for 25% more plus family benefits? HK$50,000 a month is a reasonably good salary for a single early-middle-aged expat living in a single flat but on that budget, international schools, I suspect, are out and that's not even including the waiting time. If your kids are below 4, you could consider sending them to Chinese school which is cheap and great for bilingualism. However, over 4 and they will be behind as they normally start Chinese character writing at about 2-3. I'm not sure the Immigration Department accepts de facto relationships - so your partner may not be able to work. Personally I wouldn't even think about negotiating on the working hours, it's a different culture here. They will automatically pigeon-hole you as a loser. But if you're the only person in your field and you can definitely bring in a lot more money than you are asking for, you may have a chance.

If you are targeting ESF then 50K is probably doable.


School for two - not an expert , but fees could be 6k - 9K /month (primary secondary) per person, and additional costs

Rent - $12-15K for the size your require in a village house in CWB, Saiking or apartment in TKO

Home Tax - no idea what you are referring.. many Kiwis live here, not sure they are paying home tax as such..

HK Tax - Assume your annual bonus will go towards it..


leaves about 20-25K per month for living which should be doable assuming you want to travel back home once, allowance for home tax, retirement and savings


having said that given that you are risking moving from a comfortable position there explaining your family situation and asking higher salary to cover expenses is not a bad idea.. i would get at least 60K/month ..

you have a job now? if so, then why you want to move? if really you want to move, move to a better life otherwise why move?

if you really really want to move, then explain your situation to your employer. don't put an ultimatum, not threat, just ask nicely saying you are excited about this offer but you won't be able to support your family and see if they can

accommodate you. don't guess, ask nicely.

NZ is for New Zealand and so if you really come from there and haven't been to HKG yet, prepare for a shock in term of accommodation and open space

"The employer isn't aware yet that I have a family, but the offer still seems low". no wonder your package is so low, it's for single. no way a family with 2 young kids could live with this package. for sure, you won't be happy with this low package. HKG living standard is very very high specially for new expats who are not used to the local way of life. your partner will be miserable, as well as your 2 young children. To live decently in HKG, you must be rich or at least as an expat, have a package of at least $100K per month, if not $200K.

Its not enough, no way, unless you want to live hand to mouth, week to week. Local families struggle on that if they also need to rent. I am kiwi, and have never heard of any other kiwis paying tax in NZ whilst working here, including myself 8+ years. why on earth would you need to pay 25%? If so, I bet its a crap law that your taking too literally, and yes we own houses, stocks, have bank accounts and investment houses and some friends have kids in NZ. Best double check that.

Thanks Gfunk. I'm interested in what you say re tax. I've talked to the IRD and an independent accountant, and they both report that I am likely to have to pay the difference between the tax in HK and the tax here (which would mean about 25% overall, averaging out the various tax rates for differing portions of income). The clincher is a property here that has been your 'permanent abode' and could easily be your abode in future (it's around 'availability'). The other 'enduring ties' (such as bank accounts, life insurance, etc) have much less weight, and 'intentions' are also key.


The policy is laid out in IR292 online, and there's a 90-page 'Clarification Statement' on tax residence (IS 14/01), which appears (according to my partner) to warn about people who try to present a previous permanent abode as an investment property to avoid being considered a NZ resident for tax purposes. This in itself seems a bit crazy to me because I would have thought that it's actually perfectly reasonable to turn what had been a home into an investment.


Don't get me wrong - I'm with you on this. The whole thing seems ridiculous and a huge disincentive, particularly to middle-income families. One might expect to pay NZ tax on NZ-earned income (ie, on the rental of property), but not an entire HK salary. Am meeting with an accountant later this week to look at our situation and options. The way in which you organise your affairs before leaving probably plays a big part.


It all comes down to the Direct Tax Agreement (DTA) between NZ and HK, which came into force in 2012. Here's a quote: 'The individual shall be deemed to be a resident only of the Party [ie, country] in which a permanent home is available to the individual; if a permanent home is available to the individual in both Parties, the individual shall be deemed to be a resident only of the Party with which the individual’s personal and economic relations are closer (centre of vital interests).'


Well, as I say, yes I'll be doubling checking this week.


Any opinions about the minimum salary we'd need to live comfortably (but not luxuriously) per month?


Thanks enormously again.

cookie09


i didn't say you can survive on 3500 K, i just said 50K is doable salary,

it all depends on how you live and where kids go to school


some people just cant read.

Thanks beancurd, as I suspected then. I have a feeling they won't move on relocation costs, simply because that's the one thing that was specified (and apologised for) by phone - ie, I suspect it may be policy. The other aspects, yes, I'll aim for. Have fortunately confirmed that I shouldn't need to pay NZ tax, so that brings my counter-proposal down a lot. The coverage I really need is for schooling/accomm - and family air tickets would be a great sweetener. Thanks again.

i don't think the deal is worth it. if your partner can find a job then it will of course help things out but based on your salary you won't live much of a comfortable life. hong kong is a really expensive place to live and you will find that out pretty fast.


apartments in hk are small and with a $20k housing budget you will have to look in pretty undesirable areas to find something big enough but it will likely be old and outdated.


i don't know anything about the field of work you're in but i think it would be fair to ask for $80k as an experienced manager.


if you do decide to take the job on what they're offering then it doesn't mean you're stuck with it forever. there are a lot of opportunities in hong kong and there is always a bigger company looking to hire someone who has gained some local experience.


good luck

I believe that with two adults and two kids you cannot live on HK$50k pm – you can exist but not forever. You need to decide if taking the job in HK is a stepping-stone to something else in which case, as part of a larger plan, it may make sense ie aim to stay 2 years then move back.

Don’t forget you will need to furbish the flat (beds, linen, microwave, TV cups, plates etc etc). If you are lucky you may get a fridge & washing machine. You will need to pay utility charges, buses, food and other regular expenses. And of course schooling. There will be no money left for flights back to NZ, at least not for the whole family. And no money for a car, not even an old banger like mine.

Even if you live in the New Territories and pay less in rent per month and are very frugal I believe you will need to earn at least HK$85k pm to have any chance of remaining in HK for more than a year or two without dipping in to savings.

Thanks board nasty and Greene King. My area of work is in the arts/cultural sector, so I don't expect to paid the same as in banking - but still something decent given my experience and skills, and living costs. Good to hear about other opportunities in HK - a plan B is always wise. Cheers for the tips on amount needed overall.

It sounds like you have done your home work on the Tax and you're absolutely correct. I am a kiwi. I declared myself a non-tax resident of New Zealand to avoid paying kiwi tax. My university tax law professor told me to do it. He said its all about risk and whether you get caught. For example, if you have a house, or a bank account or other assets in New Zealand, you may be liable for New Zealand tax. Luckily for me I had no money and no assets, I closed my bank account and basically have no financial ties to New Zealand and got a proper non-tax resident confirmation from the New Zealand IRD as well. This is really important, because if you do get caught for not paying the right tax, you could be fined. I suggest actually consulting with a kiwi tax lawyer, for a few hundred dollars you will have clear answer. A dependency visa can only be obtained by a married spouse, and unfortunately HK does not yet recognise same-sex marriage so even if you guys got married I'm not sure if the HK immigration department would grant your partner a visa. It might not be too hard to find a part-time fitness position, but HK immigration's policy is that work visas are usually granted to individuals who possess skills that a local worker do not have. For fitness training it may be difficult to get a work visa granted unless your partner decides to work in a different field and try to get a work visa sponsored. I don't have kids but I hear ESF is very difficult to get into nowadays, and kids have to be home-schooled until they get a spot, usually when another child drops out of the school. I think your budget is extremely tight for a family, even if you live quite far away and need to travel on public transport to work, it is still going to be tough. Would you consider explaining to your employer that you have a family to look after, and see? For example, instead of increasing your salary, you can negotiate for all of the other perks like relocation costs, air fares, and possibly an allowance for housing and school fees? Sometimes simply asking for more money per month is a bit of a shock but the "soft perks", which also have monetary value, tend to be easier to swallow.

Thanks Kia Ora - and kia ora ki a koe! I've had that chat with an accountant (rather than tax lawyer) and think we'll be OK, but it's useful to hear about your experience too. I'm a woman, my partner's a man, so we're OK on the same-sex marriage front - but thanks for the advice :)


Re negotiating - yes, the plan you outline is very much what I'm thinking, and I also need to clarify the role because I think the amount is too low even in that respect. That conversation is happening tonight. We shall see. Thanks again.

Ops! My bad, this is a very long post and I was reading between the lines. I deserve to be shunned for assuming a senior position in publishing must be a man's role. In that case, get a marriage certificate and a dependency visa!

You're not the first to assume that. Forgiven!

You should be fine not having to account for NZ taxes. The main thing is your intention to make your home in HK as your permanent abode. That doesnt mean selling your property ect, closing bank accounts, although selling your personal household furniture and cars would go a long way to show your move to HK is permanent and not short term. Also, returning to NZ should be restricted other than for the odd annual holiday. In truth you are unlikely to come to the attention of IRD unless you are making other claims or deductions.


It sounds like the job you are taking up pays similar to what you earn in NZ. Personally I wouldnt move for the same money, given the high cost of living in HK. You dont want to make your move a struggle.

Bobby, thanks for the tips. Great. You're right, the salary is based on what I earn here (with a tiny bit extra - but that's insignificant when you taken into account other pluses here, like longer leave, time in lieu, etc). I agree re not moving for the same. What percentage more would you aim for? Any advice on that (eg, what percentage more do you get)?

My 2 cent: For your situation (with kids), I won't do the move with the current package. What's the advantage?



As mentioned in some comments above, 50k just won't cut it in HK for a family of 4. You will survive, but is that what you want to move for, just to survive in HK?


I would do it for some comfortable life experience for me and my family, and with some $$ in the bank afterwards. 50k/month won't give you that (for a family of 4 in HK).


Maybe you have other reasons for the move, then, please share?

Hi AotearoaNZ,


I am a headhunter which particular strength in package negotiation. Feel free to PM me and i will pass you my number, happy to help if you are still negotiating. Essentially salary negotiations really should be done early on so there are no surprises. Failing that, just be as open and upfront as possible,. explain your situation as you have done here, and set a new number which inform you prospective employer is your very low end, rather the medium or high, as you like the job and people so much. Golden rule of thumb for me, unless it is your dream job or your current Job is killing you,, apply a 25% increase on salary on any move. If you have schooling & accommodation in your current role, I would think long and hard about moving and suggest perhaps thinking how could I make my current role better ? Anyways good luck and if you need help, drop me a line.


Brian