South Sudan as the Most Expensive Country in the World - April 2016

Thinking of moving? Cost of Living is changing constantly around the world, are you being offered the right package for your international move?

With the World Changing, is Modern Expatriate Pay Keeping Up?

How can organizations become more innovative and cost effective in their expatriate reward approaches to attract and retain the right expatriate talent?

Do you need some Expatriate Reward Approaches Explained......

Modern organizations are adopting a more flexible approach in the design of international assignment packages. For example instead of a standardized approach, expatriate reward is becoming differentiated based on the nature of the assignment and the individual's needs. For some assignees career development opportunities are more valued than compensation for cost of living and hardship.

Here are some suggestions:

• Talent needs to be sourced from a global talent pool. Instead of focusing on exporting home based expatriate talent, look more closely at potential host based expatriate talent.

• Look at alternatives to cash to be more cost effective. Promote opportunities such as mentoring by senior leadership, developmental exposure to a new product or strategy, or a sabbatical or paid further study after successfully completing an assignment.

• Turn around the traditional home (HQ) to host (developing nation) assignment with the typical large pay disparity between the HQ expatriate and local employees, by incentivizing the right host company talent with expatriate assignment opportunities back to the global or regional HQ. The total cost of expatriating a lower paid assignee, from a low cost location to a high cost location, is far more cost effective.

• The traditional International Assignment Management (see table below) build-up / balance sheet approach is no longer suitable for all. Expatriates consist not only of traditional assignees, but also commuters, employees in global roles and short-term project moves. It is expected that the trend will be increasingly towards these non-traditional expatriates. Consider alternative reward approaches such as Cost of Living Index (COLI), Cost of Living Allowance (COLA) and Salary Purchasing Power Parity (SPPP) approaches (see table below).

• Develop consistent principles for each expatriate type, depending on the purpose of the assignment, the duration, the family/residency status and the home-host combination.

• Instead of replacing one expatriate with another, cut the number of expatriates in the long run by making the identification and successful upskilling of a local successor a core objective of the assignment. Not only are expatriate mobility costs reduced over time, but it will have a positive impact on the company's local brand if the organization is seen to be focused on training and developing local people.

• Treat locations where additional cost of living, hardship and mobility incentives are justifiably required, as differentiated exceptions, by having a clearly articulated expatriate reward strategy and policy framework that is understood and communicated across the organization.

• Continually look for innovative opportunities to evolve the current expatriate reward approaches to ensure they stay modern and relevant.

Expatriate Reward Approaches Explained

Cost of living Index (COLI):

An index is used as input into the organizations expatriate package calculation. A COLI is calculated based on the cost of living difference between the home and host locations for cost of the same basket of goods and services in both locations.

Salary Purchasing Power Parity (SPPP):

Expatriate salary is adjusted for the cost of living difference between the home and host location, ensure the same standard of living (purchasing power) with no loss and no gain (parity) to the individual.

Cost of Living Allowance (COLA):

An allowance (over and above the current salary) to compensate for the difference in the cost of living.

International Assignment Management (IAM):

Expatriate package is calculated using the build-up / balance sheet / home based approach and including hypothetical tax, cost of living index, hardship premium, exchange rate, expatriation premium, benchmark housing allowance and benchmark transport allowance. The approach is to ensure consistent equitable treatment and benefits for all international assignees and have a user friendly reward structure to provide seamless coverage for different family scenarios.

Hong Kong, Singapore, Tokyo - Asia Pacific Expatriate Cost of Living

What do these three Asia Pacific locations have in common?

They are all on the top of the list of the most expensive expatriate locations to live, in this area.

Hong Kong tops the list as the most expensive location, this is due to the high cost of housing, schooling and limited space available.  Singapore is second, Tokyo comes in third, Sydney fourth and Shanghai fifth.   Australia sees four of its cities in the top ten, these include Sydney fourth (14th worldwide), Canberra sixth (24th overall), Melbourne eighth (29th overall) and Perth tenth (32nd overall).

For full cost of living comparison go here.

Top Ten Cost of Living Comparison over the Last Six Years

This article may be freely copied as long as reference is made to http://www.xpatulator.com/  

Thinking of Living in The Middle East? Which City Rates as the Most Expensive on the Cost Of Living Rankings?

Considering moving to the Middle East, raises many questions.  Which country are we moving to? Will we cope with the culture change?  How much will our every day living change?  How big is the expat community? What about people from our own country? Are the schools good? Will they have the same schooling system that our children are used to?The questions go on and on....

Interestingly, many people do the basic calculations on how much it will cost to live in the desired city, but many do not take all the relevant costs into account.  Xpatulator.com assists subscribers to calculate expatriate pay using the online calculators and extensive database of cost of living and hardship indexes, for 780 international locations. Data is collected from 50 types of data sources, including local service providers in each location, international service providers, official governmental statistics and global agency data. The data is thoroughly quality assured and manually checked by Xpatulator Analysts. 

Jerusalem in Israel is ranked as the most expensive city to live in as an expat in the region but ranks 136th worldwide, this is followed by Abu Dhabi, Doha and Dubai respectively.

For expat's the strong shekel has made imports more expensive, and the relatively high cost of housing has further contributed to Israel becoming the most expensive country, and Jerusalem the most expensive city in the Middle East.

Six Year Top Ten Ranking Comparison:

For the full listing go here.

This article may be freely copied as long as reference is made to http://www.xpatulator.com/ 

Living In Africa As An Expat? Where Does The City You Live In Rank On The Cost Of Living Scale?

Although Africa is perceived as one of the poorest continents in the world with a low cost of living for locals, the cost for expatriates due to the transportation and importation of products as well as accommodation make many of the cities here extremely expensive to live in.

Luanda, Angola remains at the top of the list due to its high cost for accommodation, imported produce and international schooling. Bangui in the Central African Republic (CAR) is the second most expensive city in Africa, and N'Djamena in Chad third, with the cheapest being Tunis in Tunisia.

Top Ten Cost of Living Ranking Comparisons:

For the full list for Africa go here.

This article may be freely copied as long as reference is made to http://www.xpatulator.com/ 

Which Cities Are the Most Expensive to Live in for Expats in Africa - October 2014?

Despite the obvious poverty and sprawling slums in Angola, accommodation for expatriates remains extremely costly.  Keeping the Capital City of Angola at the top of the list for most expensive locations for expats in Africa according to Xpatulator.com.  Bangui in the Central African Republic (CAR) is the 2nd most expensive city in Africa.
What other cities make up the costliest for expats in Africa?  

This article may be freely copied as long as reference is made to http://www.xpatulator.com/  

Compensation for Your Global Workforce - Using the Xpatulator Cost of Living Index Calculator

The global economy offers unique opportunities for companies doing business internationally. With opportunities come challenges and managing a global workforce requires reliable information on the cost of doing business and not every source of business information is created equal. Xpatulator has created a Cost of Living Index (COLI) calculator that is tailored to the needs of global companies and managers responsible for overseas workers.

Verified Information

Xpatulator uses up-to-date data collected and verified by our own expert analysts to provide the most accurate cost of living information available. Our proprietary database is updated quarterly with the latest price information for over 700 locations around the World. We collect prices on approximately 200 common goods and services.

Weighted to Reflect Actual Expat Worker Lifestyle

Some living expenses will impact your employees to a greater degree than others, so our cost of living data is grouped into 13 related baskets of goods and services, such as household, transportation and education. Each basket is weighted based on extensive surveys of expat worker’s spending habits to reflect the actual cost of living differences that your overseas workers will experience.

Based on Your Home Office

The COLI calculator uses your home office or whichever location you choose as your benchmark and sets the cost of living for that location as 100. You can then easily compare the cost of living at all your overseas offices with your home office.

Adjusted For Your Company’s Individual Benefits Package

If you are providing direct benefits like housing, private education or transportation at some or all of your overseas locations you can easily remove those baskets of benefits to see the impact they have on a specific cost of living index. You can calculate a reliable COLI on a location by location basis or even on an employee by employee basis.

When a certain basket is removed from the COLI calculation, that item’s weighting is removed and the COLI is calculated for the expenses that your employees will be paying directly from salary. This gives you the advantage of being able to assess the relative impact of paying for certain benefits directly.

Recruiting and Retention Advantages

Choosing to offer benefits where they have the greatest impact in reducing your employee’s cost of living can give you an advantage in attracting and retaining top talent. Having a tool like the Xpatulator COLI calculator also lets you highlight the value of benefits to your employees compared to direct salary adjustments or cost of living allowances.

Controlling Your Costs

In some cases there may be benefits to your bottom line by paying certain costs directly. Medical, housing and transportation are common benefits that some companies elect to pay themselves rather than have employees paying for with after tax dollars.

You can also equalize compensation for different employees that may not need or want some of the benefits that you have available. Quality private education is a benefit that families with school age children will place a high value on while individuals and couples will not. By talking with your employees about how specific benefits will affect their cost of living you can provide the most valuable compensation package while keeping an eye on your bottom line.    

COLI DEMO

Cost of Living Index Calculator

Cost of Living Index Calculator

What is this? The COLI calculates cost of living indexes for the host locations you select using the home location you specify.  

As the most comprehensive online source of international cost of living information, we provide you with FREE international location reviews and FREE cost of living rankings for every quarter period during the year, covering 13 different basket groups for every country in the world.

Use the calculators to create, run and receive your personalized report today.

Xpatulator.com is your superior international expatriate mobility cost of living calculator specialist.

This article may be freely copied as long as reference is made to http://www.xpatulator.com/

Introducing NEW Xpatulator.com Offerings

Introducing the many new exciting additions to our website is just the start.

Redesigned for your convenience.  The new Xpatulator.com user interface introduces an easier-to-use functional menu structure, faster reaction times, and superior usability on mobile devices.

Xpatulator.com

We have categorized  all the Home pages into user friendly sections for easy convenience. All the Premium Calculators are now easier to find under our second menu item CALCULATORS, this includes the invaluable new International Assignment Management Calculator;

general information on each calculator is available when you are signed out and the actual working calculators are available when you are logged in,

all your Reports will be saved into REPORT ARCHIVES when you are logged in and can now be found in their calculator Menu Item - Cost of Living Allowance, Cost of Living Index, Salary Purchasing Power Parity or International Assignment Management.

The old favourites are still available under COL Rankings for all location ranking information and Location Info is the Old Cost of Living Reviews section where you can still find all the usual country information.

Keep your eyes peeled on our blog for new information on what else has changed.

To come take a peak at the new site, go here.

Xpatulator.com is your superior international expatriate mobility cost of living calculator specialist.

What Exactly Is And Why Would I Use A Cost Of Living Calculator?

After speaking to a variety of people on the ground it was interesting to find out that very few understood the concept of using cost of living calculators or realized the importance of knowing how it can affect the negotiation of an expat salary.

What is cost of living?
This is the cost of maintaining a certain standard of living when comparing the cost of living between different locations. The objective is to calculate the difference in the cost of living expressed as and index (e.g. dividing the cost of living in location A by the cost of living in location B which may result in an index of say 140, this means that Location A is 40% more expensive than Location B) This would mean that a person who moves from Location B to Location A would need to earn 40% more, to have the same standard of living in Location A as they currently experience.

The difference in the cost of living between two locations is NOT the same for everybody, it is different for every basket group, i.e. the difference in housing costs is not the same as the difference in grocery costs or transport. Take the cost of living in Hong Kong as an example, Hong Kong is extremely expensive if housing is included in your basket selection, however the cost of living is only slightly above average if housing is excluded. It is therefore critical to be able to select which basket groups/expenses are applicable when calculating the cost of living difference between two locations.

Internationally comparable cost of living data is crucial to forming sustainable expatriate pay policies and monitoring progress. Market exchange rates give misleading comparisons because they do not reflect salary purchasing power differences.

Which calculator is right for you?

Do you want to calculate the equivalent salary in another country?	Salary Purchasing Power Parity Calculator
Do you want to calculate the cost of living allowance for another country?	Cost of Living Allowance Calculator
Do you want cost of living indexes for several international locations?	Cost of Living Index Calculator

There are of course a variety of ways you can obtain the above information, here are a few and why using data that has been verified is the obvious choice:

1) You could Do It Yourself: There is raw data via online shopping, official governmental and non-governmental organisations, as well as many statutory and non-statutory statistical organisations etc, all of which is difficult to make sense of if this is not your area of expertise. This information is time consuming to collect and difficult to maintain in the long-term.

2) You could use Consultants: There are consulting groups who serve corporate clients (not individuals) charge annual subscriptions which can be expensive. The traditional consultant approach takes a long time when reports are prepared manually and tend to provide more detailed information than clients actually require.

3) Why pay? There are Free Websites: There are free websites who rely on users adding price information and in return provide free average prices and indexes. These sites tend to be error prone. Prices are often submitted for incorrect quantities or in the wrong currency. Free sites allow anybody to submit data. If you are a professional / management level expatriate, the cost of living experienced by local workers will be very different to your cost of living.

4) Xpatulator.com:

Firstly: We manually collect and quality assure the cost of living data ourselves. Our quality is not only better than the free sites, it is also calculated based on the cost of living applicable to international professionals / managers.

Secondly: We organize the data into easy to use basket groups and allow you to select the baskets that are applicable so as to ensure the cost of living calculation is based on the actual costs paid from the salary.

Thirdly: You do not need to wait for a consultant to prepare your report. Our customers are both corporates and individuals. We understand your need for accuracy and speed. We deliver your report in less than 60 minutes. We are open 24 hours a day. 

Cost of living and hardship (quality of life) data is updated quarterly. Current data is as at 1 July 2013 based on data collected during the past 12 months.

This article may be freely copied as long as reference is made to http://www.xpatulator.com/

What is Salary Purchasing Power Parity?

Lets start with the purchasing power parity which determines the relative value of currencies, the PPP economic theory estimates the amount of adjustment needed on the exchange rate between countries in order for it to be equivalent to or on par with each country’s purchasing power.

How much money would you need to purchase the same goods and services in two countries? This is what the PPP rate answers and can then be used to calculate an implicit foreign exchange rate and can determine how much monetary power a specific amount of money has in different countries.  

The law of one price, taking into account the absence of transaction costs and official trade barriers, outcome is identical goods being the same price when expressed in the same currency. However market exchange rates are volatile and are affected by political, economic and financial factors, this results in the one-to-one price comparison being different in each country, with the standard of living in poor countries being steadily understated. PPP rates therefore facilitate international comparisons of income, when there are deviations from parity this is indicative of differences in purchasing power of a “basket of goods” across countries. The PPP rate adjustments into common units are therefore required for the purposes of international comparisons of countries’ GDPs or other national income statistics. The result is that the real exchange rate is equal to the nominal exchange rate. If the PPP held exactly, then the real exchange rate adjustment would always equal to one. However, the real exchange rates exhibit both short and long-term deviations from this value and therefore there can be a vast difference between purchasing power adjusted incomes to those merely converted by market exchange rates.

The Big Mac Index is an excellent example of measuring the law of one price, which underlies the PPP. This index compares the prices of a Big Mac Burger in McDonalds’ restaurants in different countries. What is important about the index is that it takes into account factors such as the input costs from a wide range of sectors such as the local economy including agricultural commodities, labour, advertising, rent and real estate costs, transportations, etc.

If you are offered a job overseas, in another country or state, it is a good idea to check how your salary will compare taking purchasing power factors into account before your move.

Xpatulator.com makes this process easy, using your current salary to compare whether the offer is higher or lower than what you earn now, in terms of local purchasing power.

The Salary Purchasing Power Parity then calculates how much you need to earn in another location to compensate for cost of living, hardship, and exchange rate differences, in order to have the same relative spending power and as a result have a similar standard of living as you have in your current location.

When using Xpatulator.com as your preferred supplier of information, you need to complete the following to use our calculators:

To get started, you need to register to use the SPPP Calculator.  You can do this here:  Register Now.

To run a Salary Purchasing Power Parity Calculator (SPPP) Report you need to follow the steps below:
  

1) Use your username and password to Login, you would have received confirmation of your registration via email. If you have not received your registration confirmation check your Spam Mail or contact us directly on help@xpatulator.com
 

2) Make sure that you have sufficient credit(s) to use the calculator, if not purchase credits by logging and selecting "Purchase Credits".  Each new SPPP report uses 1 credit.
 

3) Select "Calculators" from the left hand menu to start your calculation, this can only be seen if you are logged in
 

4) Choose the Salary Purchasing Power Parity Calculator (SPPP): The SPPP report calculates how much you need to earn in another location to compensate for a higher cost of living, hardship, and changes in the exchange rate, in order to have the same relative spending power and as a result have a similar standard of living as you have in your current location. 

The calculator (Report Wizard) will prompt you for the following:

5) Reference Information: This allows you to give your report a reference as well as include the name of the individual for whom you are running the report. These fields will help you identify your reports for future reference.
 

6) Locations: Here you can select the location that is being relocated FROM and the location that is being relocated TO.
 

7) Cost Allocations: This is a vital part of the selection process, you must select the basket costs that will be paid for by the employee from his own salary (column on right) and what will be provided for by the employer or state, for the employee (column on left). The default is that all basket costs will be paid for by the employee from their own salary unless otherwise specified. Note that there is no point in selecting that all costs are provided for the employee by the employer, as then theoretically the employee would not need to earn a salary.
 

8) Currency Details: This is where you need to select the appropriate currency. You can choose any currency, it does not have to be the currency of the selected locations. Enter the salary amount in the current location, used to pay for the items indicated above as "Paid from Salary". This is used as the basis of the Xpatulator calculation. You can choose the salary you wish to use as the basis for the calculation. For example depending on your salary structure you may choose to use Basic Salary, Base Salary, Guaranteed Cash, Total Cash, Total Remuneration or any other structure. Please note that we do not have tax tables within the calculator. We therefore recommend using net salary (i.e. after tax) as the basis for the calculation. This will provide you with the equivalent net salary in the “moving to location”. You can then apply tax to the equivalent net salary, if any tax is applicable.
 

9) You can choose if you want to allow negative cost of living differences to be applied to your calculation by checking the box. If you choose to allow negative cost of living differences, the calculator will decrease the salary when the cost of living is lower in the TO location. Unless you choose to allow negative cost of living differences, the calculator will only apply positive (higher) cost of living differences.
 

10) You can choose if you want to allow negative hardship differences to be applied to your calculation by checking the box. If you choose to allow negative hardship differences, the calculator will decrease the salary when the hardship is lower in the TO location. If you choose to allow negative hardship differences, the calculator will only apply positive (higher) hardship differences.
In this context hardship refers to the relative differences an expatriate family are likely to experience and the relative impact on their lifestyles when moving from one location to another.  Xpatulator hardship ranking system measures the relative quality of living in each location and assess the level of difficulty that will be experienced in adapting to each location.
 

11) Run Report: When you are sure that all your selection criteria are correct, click on run report. At this point the calculator will use 1 credit ($99).

12) Your report will be created immediately and will look like this Download Demo SPPP Report

1 credit costs $99. Register, then login using your email address and password, and buy your credits online. Please note that credit card verification time is usually a few minutes, but can take a few hours. Once you have your credits you can run the premium content calculators and receive your reports online within minutes.

For more information on cost of living, salary purchasing power parity, cost of living index or allowances go to www.xpatulator.com

Latest Cost of Living Rankings out tomorrow 1 July - Don't miss out!!

Will Tokyo retain its top spot as the most expensive place to live in the world based on the overall cost of living, encompassing all cost of living baskets for the 3rd quarter of 2012. How about Zurich, is the city still the most expensive based on the cost of living excluding the housing, education, healthcare and transport baskets. 

Where is the cheapest city to live in the world? Is it still Bhutan?


What are the overall Cost of living indexes and who is going to win the race?


Come back tomorrow to view the list....


brought to you by Xpatulator.com for your most comprehensive source of cost of living information .

How to Calculate a Cost of Living Allowance - Part 3

The formula for calculating a cost of living allowance using the inputs discussed in part 2 are as follows:

(Net Spendable Salary X Cost of Living Index X Hardship Index X Exchange Rate) less (Net Spendable Salary X Exchange Rate) = COLA

Examples of COLA Calculations using our data

Example 1) An Australian employee with a net spendable salary of AUD$100,000 moving from Perth to London where healthcare and communication will be provided by the employer

($100,000.00 X 1.2806 X 1 X 0.4768) less ($100,000.00 X 0.4768) = COLA of £13,379.44 (GBP)

Based on all the above factors a person would require a Cost of Living Allowance of £13,379.44 (GBP), in addition to their current salary of 100,000.00 Australian Dollar (AUD) to compensate for relocating from Perth to London. This Cost of Living Allowance compensates for the overall cost of living difference of +28.06% and the relative difference in hardship of 0%.

Example 2) A British employee with a net spendable salary of £18,000 moving from London to Mumbai where the employer will provide housing and education

Note: Because the Cost of Living Index is negative it is not applied.

(£18,000.00 X 1 X 1.3 X 67.2852) less (£18,000.00 X67.2852) = COLA of 363,340.32 Indian Rupee

Based on all the above factors a person would require a Cost of Living Allowance of 363,340.32 (INR ), in addition to their current salary of £18,000.00 British Pound (GBP ) to compensate for relocating from London to Mumbai. This Cost of Living Allowance compensates for the overall cost of living difference of [-30.53%] and the relative difference in hardship of 30%.

COLA Payment
The COLA is paid as a salary supplement (i.e. as an additional allowance) net of tax in the host country. If the COLA is a taxable allowance in the host country it should be grossed up in order that the full amount of calculated COLA is paid net of tax given that the basis of the calculation is Net Spendable Salary. The COLA is often accompanied by other allowances and benefits such as flights home, relocation / settling in allowance, and furnishing allowance.

Exchange Rate Fluctuations
Significant changes in the exchange rate can make a considerable difference in the COLA calculation. In 2010-2011 some of the major global exchange rates changed by as much as 30-40%.

The cost of living index reflects the changes caused by inflation and exchange rates. In the short-term there may be disequilibrium between inflation and the exchange rate (the one pushes the other), however over time the cost of living index provides the most accurate view of the cost of living.

It is important to remind expatriates that when the cost of living difference is negative, and the negative value has not been applied, they have higher purchasing power in the host country than they would at home.

Where a negative cost of living index has not been applied (our recommended approach), and a change in the exchange rate indicates an upward adjustment in COLA may be required, it is recommended that the COLA should not be adjusted upward until the cost of living index becomes positive i.e. the cost of living reflects that there is a “real” increase in cost of living between home and host countries. This may mean that their would be no increase in the COLA as a result of exchange rate fluctuations for some considerable time. During this time the employee’s purchasing power decreases. But it is important to remember that until the cost of living difference becomes positive, the individual will still have a higher purchasing power than they do in their home country.

It is advisable to stipulate a currency protection rule, rather than reacting to every fluctuation in the exchange rate. For example the rule may state that COLA will be reviewed if exchange rates or local inflation move by more than +10% during a year. It is important to keep in mind that the prices of goods and services are unlikely to drop in local currency. This would only occur in a period of deflation (negative inflation). Therefore the currency protection rule would normally make provision for upward adjustments in COLA and not downward adjustments during an employee’s assignment. Downward adjustments to an existing COLA due to exchange rate fluctuations without a corresponding drop in the prices of local goods and services puts immense pressure on an employee’s host currency budget commitments and can lead to the employee experiencing financial difficulty.

Using an independent service provider provides an independent, objective basis for determining an employee’s COLA.

We recommend therefore that a COLA is calculated by applying the specific (customized) cost of living index to the net spendable salary at the beginning of the assignment and monitoring exchange rate fluctuations thereafter in addition to the annual salary review.

How to Calculate a Cost of Living Allowance - Part 2

The formula for calculating the specific cost of living index for an international assignment is as follows:

Cost of Living Index = Customized Cost of Living Index for Host City / Customized Cost of Living Index for Home City

When moving to a higher cost of living host city, the index will be greater than 1 (positive). When moving to a lower cost of living host city the index will be less than 1 (negative). Where the index is negative it means that in real terms the cost of living in the host city is lower than the home city. This means that if the negative index where to be applied to the employee’s salary, they would actually be paid proportionately less spendable salary in the host city. It is important to note that the majority of organizations do not apply a negative cost of living index because it makes it difficult to persuade an employee to take up an assignment as they tend to see it as a reduction in salary. 

Examples of Cost of Living Index Calculations using our data:

Example 1) An Australian employee moving from Perth to London where healthcare and communication will be provided by the employer

More Expensive in London:
Alcohol & Tobacco +4.77%
Clothing +21.85%
Education +31.53%
Furniture & Appliances +16.03%
Groceries +16.35%
Household +50.72%
Miscellaneous +137.47%
Personal Care +11.18%
Recreation & Culture -6.82%
Restaurants Meals Out and Hotels +34.99%
Transport +19.80%

The overall difference in cost of living moving from Perth and London is +28.06%.

In this case the cost of living index is positive and would be applied as it is.

Example 2) A British employee moving from London to Mumbai where the employer will provide housing and education

More Expensive in Mumbai:
Alcohol & Tobacco -37.53%
Clothing -9.58%
Communication -44.92%
Furniture & Appliances -19.31%
Groceries -24.03%
Healthcare -31.24%
Miscellaneous -72.43%
Personal Care -24.94%
Recreation & Culture -35.73%
Restaurants Meals Out and Hotels -33.11%
Transport is -27.99%

The overall difference in cost of living moving from London Mumbai is -30.53%.

In this case the cost of living index is negative and would not be applied.

Net Spendable Salary

Differences in cost of living only impact the portion of the salary that is spendable in the host country. Items in the home country such as retirement funding, medical insurance and other home based costs are not impacted by the cost of living in the host country.

To determine the Net Spendable Salary establish what amount / portion of the current salary (in home currency) is spent in maintaining the employee’s current standard of living / lifestyle. What will the expatriate need to spend their salary on in the host country? For example will accommodation be provided or will the employee pay rent, will healthcare be provided etc. Deduct all items that are either provided in kind or are spendable in the home country. Deduct the hypothetical amount of tax, social contributions and any other statutory deductions applicable in the home country from the Spendable Salary. What is left is the Net Spendable Salary.

In part 3 we discuss the formula for calculating a cost of living allowance using the above inputs