Salaries in Hong Kong?
Fri, 2004-01-16 03:57 — Anonymous
I am making US$120K right now in Washington, DC suburbs right now. According to the international salary calculator website, to be on par, I should make roughly US$200K in Hong Kong.
I have heard from one Human Resources person that this sounds too high, but I simply don't know. I am scheduled to come to finalize my taking job in HK soon. As of yet, however, we have not talked money, but my potential HK employer does know what I am making now.
1) Does $200K sound high, low, or about right?
2) Should I broach this topic with potential HK employer before I fly there? I have figured that they would not incur the expense of flying me there unless they were going to make a serious offer, but I really don't want to bother flying there (as lovely as it sounds), if ultimately, the offer they make is too low, and thus I will not accept the job.
Re:Salaries in Hong Kong?
Hello John,
I'm not sure how the website makes the 120k=200k comparison ? It may not be that you'd expect to get 200K salary, rather that the total package would add up to that. eg if the employer is hiring you from abroad, in the knowledge you'll want a similar lifestyle to the one you'd have at home, then you'd look at whether your employment package includes rent for a larger than average (by local standards) appartment, school fees for children, paid flights home each year, etc.
If you've already taken that into account, and salary will be paid on top of the other benefits, then a 60% increase seems on the high side - but only you know how valuable you are to the employer, and what it will take to make you move.
If you're going to impress them in a face-to-face meeting, you'll be in a stronger bargaining position after that. But if you're concerned they can't meet your bottom-line, I don't see there's any harm in asking for a ballpark figure from them, so you are not wasting each other's time.
I hope it turns out well for you,
MrB
One other thing . . . .
One other thing to remember, John: your tax burden will be lighter here than in the US. You'll be taxed here in Hong Kong at a flat 16%, and then you'll be liable for US taxes as well, but at a far higher exemption level.
Frankly, I really doubt that US120,000=200,000 here, unless someone is making the comparison assuming you have to have just as much square footage of housing here as you would in the states. This is really a specious comparison: an upper-middle class person here simply lives in less space than an upper-middle class person in the US. If you're willing to make small concessions in this area (i.e. being willing to live in what might seem to you a mid-sized apartment instead of a house), you'll be doing quite well.
Mr Tall
International Salary Calculator
Messrs. B & Tall,
Thanks very much for your thoughts.
From the United States State Department, I find this link:
http://www.homestore.com/Move/Tools/SalaryCalcInt.asp?poe=homestore
That's where I get a 60% mark-up from where I live in the Washington, DC suburbs to HK.
However, what I am picking up from both of you is that that sounds like a bit much. Maybe if I get a 30% increase, I should be happy.
The idea of going to HK appeals to me greatly, I just want to make sure I get a fair deal.
Regards,
John Boyd
small raise
OK, so the website saying that my US$ 120K in DC salary should be increased to US$200K was overstating things, but I am here in HK now and was just offered US$125K. What do people think of that? Move around the world, leave family and friends, take great career risks, and don't have your pay noticeably change?! This is a great city, i am loving it here, but am really taken aback! What do others in HK make of this?
Re:Salaries in Hong Kong?
What perks did they offer you?
I'd say your salary is fine as you're paying alot less taxes, however, try to get the typical expat perks:
- Housing allowance
- Good Health insurance
- Club Membership(s)
Etc.
Good luck!!!
perks
John:
Gary is right: you have to look carefully at the perks, especially the housing. If they're offering you an upscale place to live in HK it's worth a great deal, as you no doubt have realized at this point.
Also, are they offering to pay your HK and/or US income taxes? This is not uncommon in some industries in HK, especially banking/finance.
Also, what about the retirement fund contribution? The law here now requires that all workers in HK put away 5% of their salary each month into some kind of long-term savings/investment scheme. Some people have to pay this themselves out of their own salaries, but others get this covered by their employers, and many get much more than 5%. At the end of your tenure here, you get that investment handed to you as a lump sum. You need to find out how much you'll be getting in this area.
Also (this is becoming a trend) many companies in HK pay out highly variable bonuses; again, in banking and finance and some other fields these are often massive , but you're of course taking a risk in that some years you may get little or none.
Finally, think in terms of take-home pay: even if you do have to pay your own taxes, you're taking home a lot more here than in the US on the same salary.
Anyway, good luck in making your decision.
Mr Tall
Thanks, Gary & Mr. Tall
Thank you much for your input.
Well, unfortunately, they aren't offering much perks at all. In fact, to be more precise, I am making US$120K now, but with various benefits, my current compensation package is worth US$132K. The offer I received yesterday was for US$124K, but the minimal health and retirement benefits brings it to US$127K. In other words, a net DECREASE in compensation!
No housing allowance. No schooling allowance for the kids. No perks like that.
SO, possibly some deal can be worked out, but it is not looking real hopeful...
The potential employer emphasized the lower taxes in HK, which is true, but still, everything else here seems to be more expensive.
Thanks, again...
Re:Salaries in Hong Kong?
Hi John;
Sorry to hear that it doesn't seem to be working out as you hoped. If I may ask, what industry are you in? It's unusual to hear about a job paying at the level you're talking about having so few perks. It may be sign of the times here, I guess. If you'd rather not say, though, I fully understand -- it's a small town in many ways.
Mr T
Re:Salaries in Hong Kong?
compensation has and is moving along the lines of 'all cash' in hong kong, i.e. pay is determined for the job and there's no real delineation for cash allowances within the total cash approach, though there is still often a packaging breakdown that allows the individual to reduce taxation by offering a housing allowance
the days of housing/education and so on relating to family size are beginning to be a way of the past....the approach being that a job commands a certain level of compensation and how you spend that is up to you. And in line with this personal family decisions no longer have such an impact on an employee's cost to company - the basic concept being the job is worth 100k a month and that's what we will pay, in total, leaving the individual to make spending choices. Great for the single guy/gal, not so great for the employee with a family
It's hard to quantify medical insurance as a benefit, a lot of the group rates are pretty attractive when offered by a company, with pretty good benefits - impossible to do a cost on cost especially with somewhere like the States. As for retirement, it sounds like they are offering basic MPF which is not that common but for someone on perhaps a contract basis it makes more sense than investing in a more generous retirement plan
and there you have it from me :)
Salaries in Hong Kong?
Mr Tall & Fiona,
Thanks for the info. The job is in the accounting/legal arena.
I am back in America now, and was sad leaving yesterday to think that I may never see Hong Kong again. My five days there convinced me that it is a very lovely place.
Yes, Fiona, you are right, they offered basic MPF.
Yes, the did talk about how I could somehow designate so much of my salary for housing costs, and this would reduce my HK income tax. Nice, but the fact remains that the pay is about the same as what I make back in a much cheaper city in America, where my family and friends are all, and where the schools are OK and free.
Well, if the potential employer does not want to take into account my costs of having a family, I suppose that's OK -- that's the free market. But, if I don't want to like it, and won't take the job because of it, that's also OK -- that's also the free market.
I couldn't really figure out much about the medical insurance the HK employer offered. I had heard through the grapevine that it is not very good, and, given that the base salary is not very good, I didn't bother to get enmeshed in the details...
Thanks again. This discussion board has been very helpful to me.
JohnBoyd
Tax
The tax thing may not play very well for you - don't US citizens have to pay US tax wherever they live in the world?
Re:Salaries in Hong Kong?
Sorry it didn't work out for you John.
Chris is right....you may have had a US tax implication on top of all this, sounds like your income would have been high enough to be hit
Schooling would have taken a HUGE chunk out of your disposable income, and the way things are going it could get worse....
Best of luck in your future endeavours
Fiona
Tax implications for US citizens living abroad
John,
Yes, US citizens' income tax liabilities are based on worldwide income. But if you live/work overseas, you can get an income tax exclusion up to $80,000 of your income. Which means you save a lot in paying Uncle Sam. There are also things such as foreign tax credits but that really works better if you work in a country with a higher tax rate than the USA (like Germany or Italy); HK tax is lower, so you're better off just paying Inland Revenue and probably taking the exclusion.
I'm not really surprised at the relatively low offer stated. Salaries in HK have gone down in the last few years due to the slumping economy since 1998 (as have other costs).