Average cost of hiring an expat in Singapore falls: Survey

The slide in costs has been attributed to more expatriates being from lower-salary places, as well as many now being offered cash salaries in line with what Singaporeans get.
The slide in costs has been attributed to more expatriates being from lower-salary places, as well as many now being offered cash salaries in line with what Singaporeans get.ST PHOTO: KUA CHEE SIONG

Hiring an expatriate here has become markedly cheaper over the past year with average costs plunging around US$12,000 (S$16,000).

Firms are now outlaying US$223,095 for a typical annual compensation and benefits package for an expat middle manager, down from US$235,545 in 2016, said a survey by management software provider ECA International.

Regional director Lee Quane noted that it was one of the most dramatic falls in expat costs in Asia, one caused by two factors.

Historically, expats have come from high-salary locations such as Europe, North America, Japan and Australia, but there are more now from lower-salary places.

"The second factor is the tenure of employment," he added. "More expatriates are being employed in Singapore on a permanent basis. As a result, they are often provided a cash salary in line with what would be provided to Singaporeans."

Mr Quane added that Singapore remains one of the 20 most expensive countries in terms of the cost of employing expatriate staff, despite having very low personal tax rates.

Malaysia saw an even bigger drop - down US$17,188 for the average pay package - to keep it at the bottom of the 40-country list. The average cost of employing a middle-manager expat across the Causeway is US$150,868, less than half of what it would cost in Japan. Mr Quane noted its cheap accommodation and relatively low levels of tax.

  • US$223k

    What firms in Singapore are now outlaying for a typical annual compensation and benefits package for an expatriate middle manager.

    US$235k

    What they were outlaying in 2016.

Elsewhere in Asia, expat pay packages in Hong Kong rose last year after hitting a five-year low in 2016. A typical pay package there is now US$268,514, up by US$3,027.

In contrast, the average pay package in China has dropped by around US$6,000 to US$276,387, as the gap continues to narrow between expats in Hong Kong and those on the mainland. Mr Quane said this is a result of exchange rate movements, although China is still the fourth-most expensive country in the world for a company to employ expats.

In Europe, Britain has become cheaper, slipping behind Japan in the rankings, given the weakness in the pound. The total expat pay package in Britain stood at US$344,508, below Japan's US$356,224 last year.

A version of this article appeared in the print edition of The Straits Times on May 29, 2018, with the headline 'Average cost of hiring an expat in S'pore falls: Survey'. Print Edition | Subscribe