The question that often comes up is how tax figures into international salary calculations adjusted for cost of living differences.
For example: "Does the calculator take into account the tax rates of each country. I currently pay about 38% in Australia but the UAE tax rate is nil. should I enter my before tax or after tax salary into the calculator."
We advise using net (after tax) salary. The calculator will then apply the following formula based on the selections in the calculator:
Net Salary in Home Location X Cost of living Index Differential X Exchange Rate X Hardship Differential = Calculated Net Salary in Host Location
If you use net salary the result will be the net salary in the new location. Given the tax rate is nil in AED the net salary would not be grossed up for tax but will be adjusted for cost of living, hardship and exchange rate. If however the new location tax rate was 25% then the net salary would be grossed by 25% to arrive at the equivalent gross salary in the host location.
Embark on a journey with Xpatulator, your guide to mastering global living standards. Explore the intricacies of relocating with our insights on cost of living, quality of life, and the unique challenges faced when moving across borders. Our calculators offer essential data for over 780 destinations worldwide, helping you navigate cost-of-living comparisons, purchasing power parity, and tailor international packages. Perfect for those seeking to balance lifestyle and expenses in new locations.
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