Moving around the world has its ups and downs and we must be honest you never really quite know what you are letting yourself into. It takes at least 6 months to settle down into a kind of routine, then you need to learn the rules of the road, country and people (unless of course they are similar to yours), where are the best shops, restaurants, beaches or entertainment, places of interest, etc etc. Even after exploring, researching and talking to other expats and locals , you can still unfortunately get this horribly wrong.
6 months to a year down the road, and you are an expat local, you know where YOU like to go, what YOU like to do and how YOU like to relax. The city is now yours, but getting there takes time and it is this time that we need to give ourselves to settle. Unless you are a nomad or a gypsy, getting used to being an expat can be trying at best.
I would like to try and make this a blog where you can express yourself as an expat, how have you coped, what insight can you give to others on your experiences, how can you help people moving to your part of the world to settle? Do you have something to help people, let them know…….help is all that is needed.
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.
Monday, March 16, 2009
Sunday, January 25, 2009
A New Approach to Expatriate Pay
The challenges of ensuring expatriates are paid fair salaries across different countries, in the current economic climate, of the credit crisis together with rapid currency and inflation fluctuations are increasingly complex.
The current economic climate has made it necessary to constantly review expatriate salaries. Rapidly fluctuating exchange rates and inflation can increase or decrease the amount of salary paid, and significantly impact purchasing power both positively and negatively in a very short period of time. The approach many organizations have taken is to convert a spendable percentage (typically 60%) of the expatriate’s salary into the host country currency on a monthly basis and to provide non-cash benefits such as accommodation, transport, education of children etc. This can result in employers paying too much or too little salary in these volatile times.
Too Much: The expatriate experiences short-term upside, as a result of a change in the exchange rate. A fall in the value of the host country currency against the home country currency, without an increase in the prices of goods and services in the host country, results in the expatriate having increased purchasing power. It may appear for a while that all is well. The expatriate has an unexpected windfall. A wise expatriate will save this windfall knowing that the situation will not be permanent. Either the exchange rate will adjust back to where it was or prices and inflation will begin to increase until economic equilibrium is achieved. The reality is, that in the short-term the employer will be faced with increased overall salary costs, and will eventually have to deal with disappointed expatriates when the trend inevitably reverses itself and their purchasing power drops again to realistic levels.
Too Little: The expatriate experiences short-term downside as a result of a change in the exchange rate. An increase in the value of the host country currency against the home country currency, without a decrease in the prices of goods and services in the host country, results in the expatriate having reduced purchasing power. This is when the employer faces complaints from expatriates unable to make ends meet. Prices of goods and services have remained the same in the host country but as a result of the change in the exchange rate, the expatriate receives less salary in local currency. In the long term either the exchange rate will adjust back to where it was, or prices and inflation will begin to decrease until economic equilibrium is achieved. The reality is that in the short-term the employer will be faced with decreased overall salary costs and will have to deal quickly with unhappy expatriates.
Clearly the approach on converting a portion of the salary into host country currency on a monthly basis does not work any more.
The expatriate compensation questions that employers must consider:
-What amount of salary will ensure that the expatriate will have the same purchasing power overseas as they have at home?
-What process / tool will be used to ensure the salary retains its purchasing power when inflation and exchange rates change?
New Approach: The ideal approach is for the employer to decide on a process / tool that establishes and maintains the expatriate’s salary purchasing power. The Salary Purchasing Power Parity (SPPP) approach is one such approach and involves the following steps:
-Committed Salary: Decide what amount / portion of the current salary (in home currency) will remain in the home country to meet committed expenses such as mortgage commitments, retirement funding, savings etc.
-Home Gross Spendable Salary: Establish what amount / portion of the current salary (in home currency) is spent in maintaining the expatriates 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 expatriate pay rent, will healthcare be provided etc.
-Home Net Spendable Salary: Establish the net spendable salary by deducting the amount of tax, social contributions and any other statutory deductions applicable in the home country to the Home Gross Spendable Salary.
-Host Net Spendable Salary: Use the established amount of Home Net Spendable Salary in home currency, to calculate the amount of Host Net Spendable Salary required in the host country, in order for the expatriate to have the same amount of purchasing power as they have in their home country. The calculation comprises 4 factors:
1) The difference in the cost of living index for the same basket of goods and services between the home and host country applicable for the spendable salary.
2) The difference in hardship that the expatriate and their family are likely to experience.
3) The exchange rate between the home and host country.
4) The Net Spendable Salary
-Host Gross Salary: The Host Net Spendable Salary is “grossed up” by the amount of tax, social contributions and any other statutory deductions applicable in the host country, to establish the host gross salary that will provide the expatriate with the same standard of living as they had in their home country.
The Host Gross Salary is established in local host currency. As a result it is no longer subject to changes in the exchange rate. Over time the salary may be eroded by local inflation which will be reflected in the cost of living indexes. It is recommended that the Host Gross Salary be reviewed on a quarterly basis, to monitor the impact of any change in cost of living and the exchange rate.
Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups and includes a COLA calculator. Follow Steven on twitter
http://twitter.com/steveninseattle/.
The current economic climate has made it necessary to constantly review expatriate salaries. Rapidly fluctuating exchange rates and inflation can increase or decrease the amount of salary paid, and significantly impact purchasing power both positively and negatively in a very short period of time. The approach many organizations have taken is to convert a spendable percentage (typically 60%) of the expatriate’s salary into the host country currency on a monthly basis and to provide non-cash benefits such as accommodation, transport, education of children etc. This can result in employers paying too much or too little salary in these volatile times.
Too Much: The expatriate experiences short-term upside, as a result of a change in the exchange rate. A fall in the value of the host country currency against the home country currency, without an increase in the prices of goods and services in the host country, results in the expatriate having increased purchasing power. It may appear for a while that all is well. The expatriate has an unexpected windfall. A wise expatriate will save this windfall knowing that the situation will not be permanent. Either the exchange rate will adjust back to where it was or prices and inflation will begin to increase until economic equilibrium is achieved. The reality is, that in the short-term the employer will be faced with increased overall salary costs, and will eventually have to deal with disappointed expatriates when the trend inevitably reverses itself and their purchasing power drops again to realistic levels.
Too Little: The expatriate experiences short-term downside as a result of a change in the exchange rate. An increase in the value of the host country currency against the home country currency, without a decrease in the prices of goods and services in the host country, results in the expatriate having reduced purchasing power. This is when the employer faces complaints from expatriates unable to make ends meet. Prices of goods and services have remained the same in the host country but as a result of the change in the exchange rate, the expatriate receives less salary in local currency. In the long term either the exchange rate will adjust back to where it was, or prices and inflation will begin to decrease until economic equilibrium is achieved. The reality is that in the short-term the employer will be faced with decreased overall salary costs and will have to deal quickly with unhappy expatriates.
Clearly the approach on converting a portion of the salary into host country currency on a monthly basis does not work any more.
The expatriate compensation questions that employers must consider:
-What amount of salary will ensure that the expatriate will have the same purchasing power overseas as they have at home?
-What process / tool will be used to ensure the salary retains its purchasing power when inflation and exchange rates change?
New Approach: The ideal approach is for the employer to decide on a process / tool that establishes and maintains the expatriate’s salary purchasing power. The Salary Purchasing Power Parity (SPPP) approach is one such approach and involves the following steps:
-Committed Salary: Decide what amount / portion of the current salary (in home currency) will remain in the home country to meet committed expenses such as mortgage commitments, retirement funding, savings etc.
-Home Gross Spendable Salary: Establish what amount / portion of the current salary (in home currency) is spent in maintaining the expatriates 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 expatriate pay rent, will healthcare be provided etc.
-Home Net Spendable Salary: Establish the net spendable salary by deducting the amount of tax, social contributions and any other statutory deductions applicable in the home country to the Home Gross Spendable Salary.
-Host Net Spendable Salary: Use the established amount of Home Net Spendable Salary in home currency, to calculate the amount of Host Net Spendable Salary required in the host country, in order for the expatriate to have the same amount of purchasing power as they have in their home country. The calculation comprises 4 factors:
1) The difference in the cost of living index for the same basket of goods and services between the home and host country applicable for the spendable salary.
2) The difference in hardship that the expatriate and their family are likely to experience.
3) The exchange rate between the home and host country.
4) The Net Spendable Salary
-Host Gross Salary: The Host Net Spendable Salary is “grossed up” by the amount of tax, social contributions and any other statutory deductions applicable in the host country, to establish the host gross salary that will provide the expatriate with the same standard of living as they had in their home country.
The Host Gross Salary is established in local host currency. As a result it is no longer subject to changes in the exchange rate. Over time the salary may be eroded by local inflation which will be reflected in the cost of living indexes. It is recommended that the Host Gross Salary be reviewed on a quarterly basis, to monitor the impact of any change in cost of living and the exchange rate.
Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups and includes a COLA calculator. Follow Steven on twitter
http://twitter.com/steveninseattle/.
How to Calculate a Cost of Living Allowance
A Cost of Living Allowance (COLA) is a salary supplement paid to employees to cover differences in the cost of living, particularly as a result of an international assignment.
The amount of COLA should enable an expatriate to be able to purchase the same basket of goods and services in the host location as they could in their home country. The basis for calculating a COLA is the Cost of Living Index (COLI) which indexes the costs of the same basket of goods and services in different geographic locations. COLA is a simple accurate method of measuring fluctuating salary purchasing power and ensuring parity.
Cost of Living Index
Our cost of Living Indexes measure the cost of 230 products and services across 13 different basket groups in 276 cities across the globe. The data is gathered by a team of research analysts who survey comparable items that are available internationally. A minimum of 3 prices for the same brand/size/volume of product is used to determine the average price for each item in each location. The items are priced on a quarterly basis and tend to rise and fall with inflation. The 13 different basket categories are as follows:
· Alcohol & Tobacco: Alcoholic beverages and tobacco products
Alcohol at Bar
Beer
Cigarettes
Locally Produced Spirit
Whiskey
Wine
· Clothing: Clothing and footwear products
Business Suits
Casual Clothing
Children’s Clothing and footwear
Coats and hats
Evening Wear
Shoe Repairs
Underwear
· Communication
Home Telephone Rental and Call Charges
Internet Connection and service provider fees
Mobile / Cellular Phone Contract and Calls
· Education
Crèche / Pre-School Fees
High School / College Fees
Primary School Fees
Tertiary Study Fees
· Furniture & Appliances: Furniture, household equipment and household appliances
DVD Player
Fridge Freezer
Iron
Kettle, Toaster, Microwave
Light Bulbs
Television
Vacuum Cleaner
Washing Machine
· Groceries: Food, non-alcoholic beverages and cleaning material
Baby Consumables
Baked Goods
Baking
Canned Foods
Cheese
Cleaning Products
Dairy
Fresh Fruits
Fresh Vegetables
Fruit Juices
Frozen
Meat
Oil & Vinegars
Pet Food
Pre-Prepared Meals
Sauces
Seafood
Snacks
Soft Drinks
Spices & Herbs
· Healthcare: General Healthcare, Medical and Medical Insurance
General Practitioner Consultation rates
Hospital Private Ward Daily Rate
Non-Prescription Medicine
Private Medical Insurance / Medical Aid Contributions
· Household: Housing, water, electricity, household gas, household fuels, local rates and residential taxes
House / Flat Mortgage
House / Flat Rental
Household Electricity Consumption
Household Gas / Fuel Consumption
Household Water Consumption
Local Property Rates / Taxes / Levies
· Miscellaneous: Stationary, Linen and general goods and services
Domestic Help
Dry Cleaning
Linen
Office Supplies
Newspapers and Magazines
Postage Stamps
· Personal Care: Personal Care products and services
Cosmetics
Haircare
Moisturiser / Sun Block
Nappies
Pain Relief Tablets
Toilet Paper
Toothpaste
Soap / Shampoo / Conditioner
· Recreation and Culture
Books
Camera Film
Cinema Ticket
DVD and CD’s
Sports goods
Theatre Ticket
· Restaurants, Meals Out and Hotels
Business Dinner
Dinner at Restaurant (non fast food)
Hotel Rates
Take Away Drinks & Snacks (fast Food)
· Transport: Public Transport, Vehicle Costs, Vehicle Fuel, Vehicle Insurance and Vehicle Maintenance
Hire Purchase / Lease of Vehicle
Petrol / Diesel
Public Transport
Service Maintenance
Tyres
Vehicle Insurance
Vehicle Purchase
Each basket category does not count equally and are weighted in the final calculation based on expatriate spending patterns.
In order to calculate an accurate cost of living index for a specific individual the basket items that are not relevant to the individual should be excluded from the calculation. For example if education and housing is provided by the employer these basket categories would be excluded from the cost of living index calculation. This increases the accuracy of the cost of living index and makes it possible for each individual to have their own customized cost of living index based on their specific arrangements rather than using an overall “generic” index which is likely to contains costs that are not relevant to the individual.
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.
Cost of Living Allowance (COLA)
The formula for calculating the cost of living allowance using the above inputs is 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 2008 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.
Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups and includes a COLA calculator. Follow Steven on twitter
http://twitter.com/steveninseattle.
The amount of COLA should enable an expatriate to be able to purchase the same basket of goods and services in the host location as they could in their home country. The basis for calculating a COLA is the Cost of Living Index (COLI) which indexes the costs of the same basket of goods and services in different geographic locations. COLA is a simple accurate method of measuring fluctuating salary purchasing power and ensuring parity.
Cost of Living Index
Our cost of Living Indexes measure the cost of 230 products and services across 13 different basket groups in 276 cities across the globe. The data is gathered by a team of research analysts who survey comparable items that are available internationally. A minimum of 3 prices for the same brand/size/volume of product is used to determine the average price for each item in each location. The items are priced on a quarterly basis and tend to rise and fall with inflation. The 13 different basket categories are as follows:
· Alcohol & Tobacco: Alcoholic beverages and tobacco products
Alcohol at Bar
Beer
Cigarettes
Locally Produced Spirit
Whiskey
Wine
· Clothing: Clothing and footwear products
Business Suits
Casual Clothing
Children’s Clothing and footwear
Coats and hats
Evening Wear
Shoe Repairs
Underwear
· Communication
Home Telephone Rental and Call Charges
Internet Connection and service provider fees
Mobile / Cellular Phone Contract and Calls
· Education
Crèche / Pre-School Fees
High School / College Fees
Primary School Fees
Tertiary Study Fees
· Furniture & Appliances: Furniture, household equipment and household appliances
DVD Player
Fridge Freezer
Iron
Kettle, Toaster, Microwave
Light Bulbs
Television
Vacuum Cleaner
Washing Machine
· Groceries: Food, non-alcoholic beverages and cleaning material
Baby Consumables
Baked Goods
Baking
Canned Foods
Cheese
Cleaning Products
Dairy
Fresh Fruits
Fresh Vegetables
Fruit Juices
Frozen
Meat
Oil & Vinegars
Pet Food
Pre-Prepared Meals
Sauces
Seafood
Snacks
Soft Drinks
Spices & Herbs
· Healthcare: General Healthcare, Medical and Medical Insurance
General Practitioner Consultation rates
Hospital Private Ward Daily Rate
Non-Prescription Medicine
Private Medical Insurance / Medical Aid Contributions
· Household: Housing, water, electricity, household gas, household fuels, local rates and residential taxes
House / Flat Mortgage
House / Flat Rental
Household Electricity Consumption
Household Gas / Fuel Consumption
Household Water Consumption
Local Property Rates / Taxes / Levies
· Miscellaneous: Stationary, Linen and general goods and services
Domestic Help
Dry Cleaning
Linen
Office Supplies
Newspapers and Magazines
Postage Stamps
· Personal Care: Personal Care products and services
Cosmetics
Haircare
Moisturiser / Sun Block
Nappies
Pain Relief Tablets
Toilet Paper
Toothpaste
Soap / Shampoo / Conditioner
· Recreation and Culture
Books
Camera Film
Cinema Ticket
DVD and CD’s
Sports goods
Theatre Ticket
· Restaurants, Meals Out and Hotels
Business Dinner
Dinner at Restaurant (non fast food)
Hotel Rates
Take Away Drinks & Snacks (fast Food)
· Transport: Public Transport, Vehicle Costs, Vehicle Fuel, Vehicle Insurance and Vehicle Maintenance
Hire Purchase / Lease of Vehicle
Petrol / Diesel
Public Transport
Service Maintenance
Tyres
Vehicle Insurance
Vehicle Purchase
Each basket category does not count equally and are weighted in the final calculation based on expatriate spending patterns.
In order to calculate an accurate cost of living index for a specific individual the basket items that are not relevant to the individual should be excluded from the calculation. For example if education and housing is provided by the employer these basket categories would be excluded from the cost of living index calculation. This increases the accuracy of the cost of living index and makes it possible for each individual to have their own customized cost of living index based on their specific arrangements rather than using an overall “generic” index which is likely to contains costs that are not relevant to the individual.
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.
Cost of Living Allowance (COLA)
The formula for calculating the cost of living allowance using the above inputs is 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 2008 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.
Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups and includes a COLA calculator. Follow Steven on twitter
http://twitter.com/steveninseattle.
Wednesday, November 26, 2008
November 2008 - International Cost of Living Comparison - Global Trends
The ongoing impact of the credit crisis, slowing global economies, falling house prices, global stock market and exchange rate volatility, together with the US dollar strengthening against most currencies are all factors contributing to a major change in the global cost of living rankings.
The International Cost of Living Comparison comprises indexes for each of 276 global locations. The indexes are calculated using the prices for specific quantities of the same goods and services in each location, based on expatriate spending patterns across 13 broad categories (Basket Groups).
The latest international cost of living ranking, together with the overall cost of living index as at 24 November 2008 is as follows:
Rank Location (Overall Cost of Living Index New York=100)
1. Japan, Tokyo (126.03)
2. Norway, Oslo (123.74)
3. Denmark, Copenhagen (121.11)
4. Switzerland, Geneva (119.59)
5. Brazil, Brasilia (118.53)
6. United Kingdom, London (118.23)
7. Greenland, Nuuk (117.14)
8. Switzerland, Zurich (116.18)
9. Hungary, Budapest (114.36)
10. Russia, Moscow (113.41)
11. Nigeria, Lagos (112.69)
12. Ireland, Dublin (112.65)
13. New Caledonia, Noumea (112.43)
14. France, Paris (112.38)
15. Chad, N'Djamena (111.3)
16. Italy, Milan (111.19)
17. Cameroon, Douala (111.06)
18. Liechtenstein, Vaduz (110.89)
19. San Marino, San Marino (110.78)
20. Monaco, Monaco (109.83)
21. Czech Republic, Prague (109.81)
22. Austria, Vienna (109.68)
23. Slovakia, Bratislava (109.31)
24. Isle of Man, Douglas (108.97)
25. Poland, Warsaw (107.63)
26. Bermuda, Hamilton (107.53)
27. Italy, Rome (107.29)
28. Finland, Helsinki (107.07)
29. Australia, Sydney (106.52)
30. USA, San Francisco Calif (104.53)
31. Cote D'Ivoire, Abidjan (104.4)
32. Venezuela, Caracas (104.02)
33. China, Hong Kong (103.43)
34. United Arab Emirates, Dubai (103.36)
35. Croatia, Zagreb (103.29)
36. Angola, Luanda (103.27)
37. Belgium, Brussels (103.19)
38. Netherlands, Amsterdam (102.33)
39. Jersey, Saint Helier (102.24)
40. Papua New Guinea, Port Moresby (102.22)
41. Korea Republic of, Seoul (101.94)
42. Iceland, Reykjavík (101.66)
43. Ukraine, Kiev (101.2)
44. Guernsey, St Peter Port (100.68)
45. Qatar, Doha (100.64)
46. Central African Republic, Bangui (100.58)
47. Spain, Madrid (100.26)
48. USA, San Jose Calif (100.13)
49. Falkland Islands, Stanley (100)
50. USA, New York NY (100)
51. Sweden, Stockholm (99.76)
52. USA, Boston Mass (99.63)
53. Cameroon, Yaounde (98.84)
54. Mali, Bamako (98.74)
55. Benin, Cotonou (98.6)
56. Germany, Berlin (98.18)
57. Micronesia, Palikir (97.98)
58. Gabon, Libreville (97.77)
59. Canada, Toronto (97.39)
60. Germany, Bonn (96.38)
61. Vatican City, Vatican City (96.23)
62. Australia, Melbourne (95.88)
63. Australia, Canberra (95.88)
64. Estonia, Tallinn (95.08)
65. Turkey, Ankara (94.87)
66. Singapore, Singapore (94.6)
67. Guinea-Bissau, Bissau (94.24)
68. USA, Los Angeles Calif (93.93)
69. Palau, Melekeok (93.85)
70. Luxembourg, Luxembourg (93.77)
71. Canada, Vancouver (93.48)
72. Portugal, Lisbon (92.84)
73. Australia, Perth (92.82)
74. Germany, Frankfurt (92.81)
75. Azerbaijan, Baku (92.76)
76. Gibraltar, Gibraltar (92.33)
77. Comores, Moroni (92.04)
78. USA, Washington DC (91.8)
79. USA, Philadelphia Pa (91.49)
80. Nauru, Yaren (91.16)
81. Kazakhstan, Almaty (90.99)
82. Bahrain, Manama (90.82)
83. USA, San Diego Calif (90.7)
84. Bahamas, Nassau (90.63)
85. Togo, Lome (90.11)
86. Taiwan, Taipei (90.07)
87. Haiti, Port-au-Prince (90)
88. Senegal, Dakar (89.57)
89. Saint Helena, Jamestown (89.26)
90. USA, Baltimore Md (89.25)
91. United Kingdom, Glasgow (88.88)
92. Djibouti, Djibouti (88.45)
93. Niger, Niamey (88.38)
94. Zambia, Lusaka (88.36)
95. USA, Seattle Wash (88.3)
96. Andorra, Andorra la Vella (88.13)
97. Vietnam, Hanoi (88.03)
98. Tonga, Nuku'Alofa (87.34)
99. Gambia, Banjul (87.23)
100.United Arab Emirates, Abu Dhabi (87.16)
101.Cayman Islands, George Town (86.81)
102.Sudan, Khartoum (86.64)
103.Greece, Athens (86.59)
104.Barbados, Bridgetown (86.5)
105.USA, Portland Ore (86.1)
106.Sierra Leone, Freetown (85.92)
107.Equatorial Guinea, Malabo (85.89)
108.USA, Chicago Ill (85.73)
109.Romania, Bucharest (85.55)
110.USA, Miami Fla (85.54)
111.Marshall Islands, Majuro (85.41)
112.Cyprus, Nicosia (85.26)
113.Malta, Velletta (84.99)
114.Moldova, Chisinau (84.89)
115.Ghana, Accra (84.89)
116.United Kingdom, Birmingham (84.76)
117.Canada, Montreal (84.37)
118.Algeria, Algiers (84.01)
119.Israel, Jerusalem (83.82)
120.Australia, Brisbane (83.29)
121.Burkina Faso, Ouagadougou (82.92)
122.Lebanon, Beirut (82.74)
123.Jordan, Amman (82.41)
124.Guinea, Conakry (82.16)
125.Jamaica, Kingston (82.11)
126.Philippines, Manila (82.07)
127.Georgia Republic of, Tbilisi (82.03)
128.Congo Democratic Rep, Kinshasa (81.84)
129.Seychelles, Victoria (81.78)
130.Indonesia, Jakarta (81.76)
131.USA, Las Vegas Nev (81.75)
132.Lithuania, Vilnius (81.67)
133.Vanuatu, Port Vila (81.35)
134.Grenada, Saint George's (81.23)
135.Trinidad and Tobago, Port-of-Spain (81.13)
136.Mozambique, Maputo (80.82)
137.New Zealand, Auckland (80.71)
138.Samoa, Apia (80.64)
139.Congo, Brazzaville (80.14)
140.Armenia, Yerevan (80.13)
141.Albania, Tirana (80.1)
142.Martinique, Fort-de-France (80.09)
143.Latvia, Riga (79.92)
144.Thailand, Bangkok (79.86)
145.Sao Tome and Principe, Sao Tome (79.79)
146.USA, Denver Colo (79.74)
147.China, Beijing (79.73)
148.Fiji, Suva (78.99)
149.Slovenia, Ljubljana (78.85)
150.Canada, Ottawa (78.82)
151.Tuvalu, Funafuti (78.78)
152.Myanmar, Yangon (78.51)
153.Puerto Rico, San Juan (78.49)
154.Kenya, Nairobi (78.4)
155.USA, Phoenix Ariz (78.26)
156.Mauritius, Port Louis (78.25)
157.Madagascar, Antananarivo (78.24)
158.USA, Tampa Fla (78.22)
159.Serbia, Belgrade (78.13)
160.Kiribati, South Tarawa (78.06)
161.Guam, Hagatna (77.8)
162.Brunei, Bandar Seri Begawan (77.72)
163.Uruguay, Montevideo (77.41)
164.Colombia, Bogota (77.23)
165.USA, Atlanta GA (76.99)
166.Morocco, Rabat (76.93)
167.USA, Milwaukee Wis (76.77)
168.Paraguay, Asuncion (76.49)
169.Mexico, Mexico City (76.13)
170.USA, Columbus Ohio (76.06)
171.India, Mumbai (76.04)
172.Tanzania, Dar es Salaam (76)
173.Solomon Islands, Honiara (75.93)
174.USA, Cleveland Ohio (75.84)
175.USA, Detroit Mich (75.74)
176.Liberia, Monrovia (75.63)
177.USA, Austin Tex (75.57)
178.USA, Dallas Tex (75.47)
179.USA, Jacksonville Fla (75.47)
180.Australia, Adelaide (75.39)
181.Kuwait, Kuwait City (75.22)
182.Bulgaria, Sofia (75.14)
183.Saudi Arabia, Riyadh (75.08)
184.USA, Pittsburgh Penn (74.54)
185.Timor-Leste, Dili (74.29)
186.Iran, Tehran (74.24)
187.USA, Indianapolis Ind (74.13)
188.USA, Fort Worth Tex (73.64)
189.Somalia, Mogadishu (73.49)
190.Maldives, Male (73.48)
191.USA, Charlotte NC (73.47)
192.USA, Houston Tex (73.36)
193.Chile, Santiago (73.01)
194.Mauritania, Nouakchott (72.99)
195.Botswana, Gaberone (72.86)
196.Cape Verde, Praia (72.81)
197.USA, El Paso Tex (72.61)
198.Uganda, Kampala (72.25)
199.Afghanistan, Kabul (72.13)
200.Antigua and Barbuda, Saint John's (72.04)
201.USA, St Louis MO (71.93)
202.Malaysia, Kuala Lumpur (71.82)
203.Peru, Lima (71.7)
204.Korea Democratic Republic of, Pyongyang (71.62)
205.Kosovo, Pristina (71.55)
206.India, New Delhi (71.4)
207.Belarus, Minsk (71.28)
208.Malawi, Lilongwe (71.24)
209.Saint Kitts and Nevis, Basseterre (71.07)
210.USA, Memphis Tenn (71.02)
211.India, Chennai (70.76)
212.Kyrgyzstan, Bishkek (70.29)
213.Burundi, Bujumbura (70.07)
214.Macedonia, Skopje (70.02)
215.USA, San Antonio Tex (70.02)
216.Guatemala, Guatemala City (69.74)
217.Honduras, Tegucigalpa (69.57)
218.Saint Vincent and the Grenadines, Kingstown (69.5)
219.Canada, Calgary (69.46)
220.India, Calcutta (69.31)
221.India, Hyderabad (68.85)
222.Dominica, Roseau (68.79)
223.Rwanda, Kigali (68.75)
224.Panama, Panama City (68.58)
225.Guyana, Georgetown (68.58)
226.China, Shanghai (68.48)
227.Syria, Damascus (67.99)
228.Montenegro, Podgorica (67.75)
229.Laos, Vientiane (67.43)
230.Ethiopia, Addis Ababa (66.87)
231.Cuba, Havana (66.61)
232.Belize, Belmopan (66.33)
233.Nicaragua, Managua (65.89)
234.Nepal, Kathmandu (65.67)
235.Dominican Republic, Santo Domingo (64.93)
236.Tunisia, Tunis (64.87)
237.Suriname, Paramaribo (64.75)
238.India, Bangalore (64.56)
239.South Africa, Johannesburg (64.51)
240.Costa Rica, San Jose (64.47)
241.Egypt, Cairo (64.18)
242.El Salvador, San Salvador (63.34)
243.Swaziland, Mbabane (63.11)
244.Mongolia, Ulaanbaatar (62.85)
245.South Africa, Pretoria (62.71)
246.Oman, Muscat (61.61)
247.Saint Lucia, Castries (61.2)
248.Pakistan, Lahore (59.48)
249.Tajikistan, Dushanbe (59.25)
250.South Africa, Cape Town (58.99)
251.Namibia, Windhoek (58.89)
252.Sri Lanka, Colombo (58.51)
253.Pakistan, Islamabad (58.33)
254.Iraq, Baghdad (58.25)
255.Pakistan, Karachi (57.72)
256.Lesotho, Maseru (57.49)
257.Argentina, Buenos Aires (57.46)
258.Bangladesh, Dhaka (57.03)
259.Bhutan, Thimphu (56.78)
260.Bolivia, La Paz (56.66)
261.China, Macao (56.41)
262.South Africa, Durban (56.07)
263.Bosnia and Herzegovina, Sarajevo (54.35)
264.Ecuador, Quito (53.83)
265.Uzbekistan, Tashkent (53.03)
266.Libya, Tripoli (52.74)
267.China, Shenzhen (51.65)
268.Eritrea, Asmara (50.72)
269.China, Dalian (50.54)
270.China, Wuhan (49.93)
271.China, Guangzhou (47.28)
272.Cambodia, Phnom Penh (45.65)
273.Yemen, Sanaa (45.6)
274.Turkmenistan, Ashgabat (38.77)
275.China, Tianjin (29.5)
276.Zimbabwe, Harare (17.12)
About The Author: Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups.
http://www.xpatulator.com/
The International Cost of Living Comparison comprises indexes for each of 276 global locations. The indexes are calculated using the prices for specific quantities of the same goods and services in each location, based on expatriate spending patterns across 13 broad categories (Basket Groups).
The latest international cost of living ranking, together with the overall cost of living index as at 24 November 2008 is as follows:
Rank Location (Overall Cost of Living Index New York=100)
1. Japan, Tokyo (126.03)
2. Norway, Oslo (123.74)
3. Denmark, Copenhagen (121.11)
4. Switzerland, Geneva (119.59)
5. Brazil, Brasilia (118.53)
6. United Kingdom, London (118.23)
7. Greenland, Nuuk (117.14)
8. Switzerland, Zurich (116.18)
9. Hungary, Budapest (114.36)
10. Russia, Moscow (113.41)
11. Nigeria, Lagos (112.69)
12. Ireland, Dublin (112.65)
13. New Caledonia, Noumea (112.43)
14. France, Paris (112.38)
15. Chad, N'Djamena (111.3)
16. Italy, Milan (111.19)
17. Cameroon, Douala (111.06)
18. Liechtenstein, Vaduz (110.89)
19. San Marino, San Marino (110.78)
20. Monaco, Monaco (109.83)
21. Czech Republic, Prague (109.81)
22. Austria, Vienna (109.68)
23. Slovakia, Bratislava (109.31)
24. Isle of Man, Douglas (108.97)
25. Poland, Warsaw (107.63)
26. Bermuda, Hamilton (107.53)
27. Italy, Rome (107.29)
28. Finland, Helsinki (107.07)
29. Australia, Sydney (106.52)
30. USA, San Francisco Calif (104.53)
31. Cote D'Ivoire, Abidjan (104.4)
32. Venezuela, Caracas (104.02)
33. China, Hong Kong (103.43)
34. United Arab Emirates, Dubai (103.36)
35. Croatia, Zagreb (103.29)
36. Angola, Luanda (103.27)
37. Belgium, Brussels (103.19)
38. Netherlands, Amsterdam (102.33)
39. Jersey, Saint Helier (102.24)
40. Papua New Guinea, Port Moresby (102.22)
41. Korea Republic of, Seoul (101.94)
42. Iceland, Reykjavík (101.66)
43. Ukraine, Kiev (101.2)
44. Guernsey, St Peter Port (100.68)
45. Qatar, Doha (100.64)
46. Central African Republic, Bangui (100.58)
47. Spain, Madrid (100.26)
48. USA, San Jose Calif (100.13)
49. Falkland Islands, Stanley (100)
50. USA, New York NY (100)
51. Sweden, Stockholm (99.76)
52. USA, Boston Mass (99.63)
53. Cameroon, Yaounde (98.84)
54. Mali, Bamako (98.74)
55. Benin, Cotonou (98.6)
56. Germany, Berlin (98.18)
57. Micronesia, Palikir (97.98)
58. Gabon, Libreville (97.77)
59. Canada, Toronto (97.39)
60. Germany, Bonn (96.38)
61. Vatican City, Vatican City (96.23)
62. Australia, Melbourne (95.88)
63. Australia, Canberra (95.88)
64. Estonia, Tallinn (95.08)
65. Turkey, Ankara (94.87)
66. Singapore, Singapore (94.6)
67. Guinea-Bissau, Bissau (94.24)
68. USA, Los Angeles Calif (93.93)
69. Palau, Melekeok (93.85)
70. Luxembourg, Luxembourg (93.77)
71. Canada, Vancouver (93.48)
72. Portugal, Lisbon (92.84)
73. Australia, Perth (92.82)
74. Germany, Frankfurt (92.81)
75. Azerbaijan, Baku (92.76)
76. Gibraltar, Gibraltar (92.33)
77. Comores, Moroni (92.04)
78. USA, Washington DC (91.8)
79. USA, Philadelphia Pa (91.49)
80. Nauru, Yaren (91.16)
81. Kazakhstan, Almaty (90.99)
82. Bahrain, Manama (90.82)
83. USA, San Diego Calif (90.7)
84. Bahamas, Nassau (90.63)
85. Togo, Lome (90.11)
86. Taiwan, Taipei (90.07)
87. Haiti, Port-au-Prince (90)
88. Senegal, Dakar (89.57)
89. Saint Helena, Jamestown (89.26)
90. USA, Baltimore Md (89.25)
91. United Kingdom, Glasgow (88.88)
92. Djibouti, Djibouti (88.45)
93. Niger, Niamey (88.38)
94. Zambia, Lusaka (88.36)
95. USA, Seattle Wash (88.3)
96. Andorra, Andorra la Vella (88.13)
97. Vietnam, Hanoi (88.03)
98. Tonga, Nuku'Alofa (87.34)
99. Gambia, Banjul (87.23)
100.United Arab Emirates, Abu Dhabi (87.16)
101.Cayman Islands, George Town (86.81)
102.Sudan, Khartoum (86.64)
103.Greece, Athens (86.59)
104.Barbados, Bridgetown (86.5)
105.USA, Portland Ore (86.1)
106.Sierra Leone, Freetown (85.92)
107.Equatorial Guinea, Malabo (85.89)
108.USA, Chicago Ill (85.73)
109.Romania, Bucharest (85.55)
110.USA, Miami Fla (85.54)
111.Marshall Islands, Majuro (85.41)
112.Cyprus, Nicosia (85.26)
113.Malta, Velletta (84.99)
114.Moldova, Chisinau (84.89)
115.Ghana, Accra (84.89)
116.United Kingdom, Birmingham (84.76)
117.Canada, Montreal (84.37)
118.Algeria, Algiers (84.01)
119.Israel, Jerusalem (83.82)
120.Australia, Brisbane (83.29)
121.Burkina Faso, Ouagadougou (82.92)
122.Lebanon, Beirut (82.74)
123.Jordan, Amman (82.41)
124.Guinea, Conakry (82.16)
125.Jamaica, Kingston (82.11)
126.Philippines, Manila (82.07)
127.Georgia Republic of, Tbilisi (82.03)
128.Congo Democratic Rep, Kinshasa (81.84)
129.Seychelles, Victoria (81.78)
130.Indonesia, Jakarta (81.76)
131.USA, Las Vegas Nev (81.75)
132.Lithuania, Vilnius (81.67)
133.Vanuatu, Port Vila (81.35)
134.Grenada, Saint George's (81.23)
135.Trinidad and Tobago, Port-of-Spain (81.13)
136.Mozambique, Maputo (80.82)
137.New Zealand, Auckland (80.71)
138.Samoa, Apia (80.64)
139.Congo, Brazzaville (80.14)
140.Armenia, Yerevan (80.13)
141.Albania, Tirana (80.1)
142.Martinique, Fort-de-France (80.09)
143.Latvia, Riga (79.92)
144.Thailand, Bangkok (79.86)
145.Sao Tome and Principe, Sao Tome (79.79)
146.USA, Denver Colo (79.74)
147.China, Beijing (79.73)
148.Fiji, Suva (78.99)
149.Slovenia, Ljubljana (78.85)
150.Canada, Ottawa (78.82)
151.Tuvalu, Funafuti (78.78)
152.Myanmar, Yangon (78.51)
153.Puerto Rico, San Juan (78.49)
154.Kenya, Nairobi (78.4)
155.USA, Phoenix Ariz (78.26)
156.Mauritius, Port Louis (78.25)
157.Madagascar, Antananarivo (78.24)
158.USA, Tampa Fla (78.22)
159.Serbia, Belgrade (78.13)
160.Kiribati, South Tarawa (78.06)
161.Guam, Hagatna (77.8)
162.Brunei, Bandar Seri Begawan (77.72)
163.Uruguay, Montevideo (77.41)
164.Colombia, Bogota (77.23)
165.USA, Atlanta GA (76.99)
166.Morocco, Rabat (76.93)
167.USA, Milwaukee Wis (76.77)
168.Paraguay, Asuncion (76.49)
169.Mexico, Mexico City (76.13)
170.USA, Columbus Ohio (76.06)
171.India, Mumbai (76.04)
172.Tanzania, Dar es Salaam (76)
173.Solomon Islands, Honiara (75.93)
174.USA, Cleveland Ohio (75.84)
175.USA, Detroit Mich (75.74)
176.Liberia, Monrovia (75.63)
177.USA, Austin Tex (75.57)
178.USA, Dallas Tex (75.47)
179.USA, Jacksonville Fla (75.47)
180.Australia, Adelaide (75.39)
181.Kuwait, Kuwait City (75.22)
182.Bulgaria, Sofia (75.14)
183.Saudi Arabia, Riyadh (75.08)
184.USA, Pittsburgh Penn (74.54)
185.Timor-Leste, Dili (74.29)
186.Iran, Tehran (74.24)
187.USA, Indianapolis Ind (74.13)
188.USA, Fort Worth Tex (73.64)
189.Somalia, Mogadishu (73.49)
190.Maldives, Male (73.48)
191.USA, Charlotte NC (73.47)
192.USA, Houston Tex (73.36)
193.Chile, Santiago (73.01)
194.Mauritania, Nouakchott (72.99)
195.Botswana, Gaberone (72.86)
196.Cape Verde, Praia (72.81)
197.USA, El Paso Tex (72.61)
198.Uganda, Kampala (72.25)
199.Afghanistan, Kabul (72.13)
200.Antigua and Barbuda, Saint John's (72.04)
201.USA, St Louis MO (71.93)
202.Malaysia, Kuala Lumpur (71.82)
203.Peru, Lima (71.7)
204.Korea Democratic Republic of, Pyongyang (71.62)
205.Kosovo, Pristina (71.55)
206.India, New Delhi (71.4)
207.Belarus, Minsk (71.28)
208.Malawi, Lilongwe (71.24)
209.Saint Kitts and Nevis, Basseterre (71.07)
210.USA, Memphis Tenn (71.02)
211.India, Chennai (70.76)
212.Kyrgyzstan, Bishkek (70.29)
213.Burundi, Bujumbura (70.07)
214.Macedonia, Skopje (70.02)
215.USA, San Antonio Tex (70.02)
216.Guatemala, Guatemala City (69.74)
217.Honduras, Tegucigalpa (69.57)
218.Saint Vincent and the Grenadines, Kingstown (69.5)
219.Canada, Calgary (69.46)
220.India, Calcutta (69.31)
221.India, Hyderabad (68.85)
222.Dominica, Roseau (68.79)
223.Rwanda, Kigali (68.75)
224.Panama, Panama City (68.58)
225.Guyana, Georgetown (68.58)
226.China, Shanghai (68.48)
227.Syria, Damascus (67.99)
228.Montenegro, Podgorica (67.75)
229.Laos, Vientiane (67.43)
230.Ethiopia, Addis Ababa (66.87)
231.Cuba, Havana (66.61)
232.Belize, Belmopan (66.33)
233.Nicaragua, Managua (65.89)
234.Nepal, Kathmandu (65.67)
235.Dominican Republic, Santo Domingo (64.93)
236.Tunisia, Tunis (64.87)
237.Suriname, Paramaribo (64.75)
238.India, Bangalore (64.56)
239.South Africa, Johannesburg (64.51)
240.Costa Rica, San Jose (64.47)
241.Egypt, Cairo (64.18)
242.El Salvador, San Salvador (63.34)
243.Swaziland, Mbabane (63.11)
244.Mongolia, Ulaanbaatar (62.85)
245.South Africa, Pretoria (62.71)
246.Oman, Muscat (61.61)
247.Saint Lucia, Castries (61.2)
248.Pakistan, Lahore (59.48)
249.Tajikistan, Dushanbe (59.25)
250.South Africa, Cape Town (58.99)
251.Namibia, Windhoek (58.89)
252.Sri Lanka, Colombo (58.51)
253.Pakistan, Islamabad (58.33)
254.Iraq, Baghdad (58.25)
255.Pakistan, Karachi (57.72)
256.Lesotho, Maseru (57.49)
257.Argentina, Buenos Aires (57.46)
258.Bangladesh, Dhaka (57.03)
259.Bhutan, Thimphu (56.78)
260.Bolivia, La Paz (56.66)
261.China, Macao (56.41)
262.South Africa, Durban (56.07)
263.Bosnia and Herzegovina, Sarajevo (54.35)
264.Ecuador, Quito (53.83)
265.Uzbekistan, Tashkent (53.03)
266.Libya, Tripoli (52.74)
267.China, Shenzhen (51.65)
268.Eritrea, Asmara (50.72)
269.China, Dalian (50.54)
270.China, Wuhan (49.93)
271.China, Guangzhou (47.28)
272.Cambodia, Phnom Penh (45.65)
273.Yemen, Sanaa (45.6)
274.Turkmenistan, Ashgabat (38.77)
275.China, Tianjin (29.5)
276.Zimbabwe, Harare (17.12)
About The Author: Steven Coleman runs the most comprehensive international cost of living website available www.xpatulator.com an internet service that provides free cost of living and hardship information for 276 global locations to registered users. The premium content calculators allow you to customise your own cost of living index by choosing your own basket groups.
http://www.xpatulator.com/
Sunday, November 16, 2008
Moving to a new Country, How to cope
A while ago I wrote about moving countries, where to find information and what questions you should be asking yourself. Having experienced a couple of country moves I can give you a few tips.
Everything I wrote before on researching the country on websites, joining blogs and finding out whether your salary is going to cover your cost of living, are all relevant. What I want to do is take you through the process of moving. If you are being hired by a company who are going to help you move, life is going to be a lot easier.
If however, you are going to be doing this on your own you need to prepare yourself for a little work. Firstly, find out what you need from a documentation point of view to get into the new country.
1. Do you need a visa, which type of visa will you need (working, spousal, minor children, etc) for each member of the family and start preparing the documentation for them.
2. Documents could include Unabridged birth certificates, ID documents, Passports, Passport Photos, Marriage Certificate, each country has its own requirements. Some countries require a police / criminal clearance. Find out either from the government website or the embassy in your country as to what you need, or alternatively find an agency that can do it all for you. An agency will let you know what you need to get and can assist you in obtaining the relevant documents.
Secondly, what will you need to do when you get to the new country.
1. You will need to find a place to stay in the interim, open a bank account, organise a post box, transport, etc, so you need to find out what you need to have to do these. Do you need to keep certified copies of your passport or bank statements, etc?
2. Will you need to go through medicals for any reason, do you need to take any medical records with you? 3. How do you set up your medical aid, life insurance, buy or rent a property, get a phone installed??? Once again if you are moving with a company all of this will be a lot easier, as you will always have someone to facilitate you with the processes, but moving to a foreign country where everything is different could take its toll. Sometimes the best advice is just to ask.
Thirdly, prepare yourself for the move.
1. Start planning, make a list of everything you need to do.
2. Our list consisted of the following:
a. Plan the day you are going to fly out and book the tickets, this date will determine all the below dates. First ensure that you have all documentation required before booking your tickets.
b. List all accounts that need to be paid or cancelled and the dates that this needs to be completed by e.g. Medical Aid, Security company, Car insurance, Telephone account, Internet account, Post box, Clothing accounts, etc.
c. Decide what to do with your bank account, and all the cards attached to it. Do you want to keep your account open and keep all the cards, or just keep 1 card? Remember the bank charges that you will need to pay monthly and that you will have 2 sets of bank accounts if you do keep it open. However, it could be worthwhile so that you have money available and cards that you can use.
d. What are you going to do with your car/s, house, other assets, furniture, even down to your clothes - if you are going to sell them start planning what to sell, how much for and how you need to go about doing this, with deadline dates. Alternatively you can store your belongings.
e. If you require to give someone power of attorney to sell anything or do any other legal work for you, decide on who you would want to do this for you and how to go about doing it. Your bank can normally assist you in this process.
f. Decide what you want to do with your Life policies, Retirement annuities, or any other policy or investment you have made, your broker can help you with these decisions.
g. When are you going to tell everyone about this decision you have made, do you have to resign from a job before you go and when do you need to let them know, plan your decision carefully as you don't want to leave with any problems.
h. Do you employ anyone, start planning how to tell them you are leaving, what they need to be paid, is there a retrenchment package attached, write referral letters, do you need to write letters to any government departments to inform them of the change in status of your employee and leave with everyone happy.
i. If you are taking any personal belongings with you start getting quotes from removal companies and make a decision on who to go with. Get at least 5 quotes to be objective and ensure you are comfortable with the service, and get referrals.
j. Are you taking animals with you? If so do the same as above. Find out whether there are any special requirements you need to take into account when taking your animals with you. Do you need to keep them in quarantine and if so for how long, what documentation do you need to get for them and vaccinations?
k. Organise someone to take you to the airport.
l. Check on how you are all feeling, how are the kids doing and how do they feel about the move. Talk about it and let the kids know what is happening.
m. Have a farewell party for all of you, the kids and their friends and you and your friends. There needs to be some form of closure, and it will make you feel just how special all the people in your life are and how special you are to them.
n. Remember to keep contact details close at hand of everyone that is important to you.
o. See if you can find a personal relocator in the country you are moving too, they can be of great help too. I hope this helps in the process required to relocate. It can be daunting and unsettling, or an adventure, you need to decide how to perceive the move. In my next article, I will write about settling in and the processes you need to go through to do this.
xpatulator.com
Everything I wrote before on researching the country on websites, joining blogs and finding out whether your salary is going to cover your cost of living, are all relevant. What I want to do is take you through the process of moving. If you are being hired by a company who are going to help you move, life is going to be a lot easier.
If however, you are going to be doing this on your own you need to prepare yourself for a little work. Firstly, find out what you need from a documentation point of view to get into the new country.
1. Do you need a visa, which type of visa will you need (working, spousal, minor children, etc) for each member of the family and start preparing the documentation for them.
2. Documents could include Unabridged birth certificates, ID documents, Passports, Passport Photos, Marriage Certificate, each country has its own requirements. Some countries require a police / criminal clearance. Find out either from the government website or the embassy in your country as to what you need, or alternatively find an agency that can do it all for you. An agency will let you know what you need to get and can assist you in obtaining the relevant documents.
Secondly, what will you need to do when you get to the new country.
1. You will need to find a place to stay in the interim, open a bank account, organise a post box, transport, etc, so you need to find out what you need to have to do these. Do you need to keep certified copies of your passport or bank statements, etc?
2. Will you need to go through medicals for any reason, do you need to take any medical records with you? 3. How do you set up your medical aid, life insurance, buy or rent a property, get a phone installed??? Once again if you are moving with a company all of this will be a lot easier, as you will always have someone to facilitate you with the processes, but moving to a foreign country where everything is different could take its toll. Sometimes the best advice is just to ask.
Thirdly, prepare yourself for the move.
1. Start planning, make a list of everything you need to do.
2. Our list consisted of the following:
a. Plan the day you are going to fly out and book the tickets, this date will determine all the below dates. First ensure that you have all documentation required before booking your tickets.
b. List all accounts that need to be paid or cancelled and the dates that this needs to be completed by e.g. Medical Aid, Security company, Car insurance, Telephone account, Internet account, Post box, Clothing accounts, etc.
c. Decide what to do with your bank account, and all the cards attached to it. Do you want to keep your account open and keep all the cards, or just keep 1 card? Remember the bank charges that you will need to pay monthly and that you will have 2 sets of bank accounts if you do keep it open. However, it could be worthwhile so that you have money available and cards that you can use.
d. What are you going to do with your car/s, house, other assets, furniture, even down to your clothes - if you are going to sell them start planning what to sell, how much for and how you need to go about doing this, with deadline dates. Alternatively you can store your belongings.
e. If you require to give someone power of attorney to sell anything or do any other legal work for you, decide on who you would want to do this for you and how to go about doing it. Your bank can normally assist you in this process.
f. Decide what you want to do with your Life policies, Retirement annuities, or any other policy or investment you have made, your broker can help you with these decisions.
g. When are you going to tell everyone about this decision you have made, do you have to resign from a job before you go and when do you need to let them know, plan your decision carefully as you don't want to leave with any problems.
h. Do you employ anyone, start planning how to tell them you are leaving, what they need to be paid, is there a retrenchment package attached, write referral letters, do you need to write letters to any government departments to inform them of the change in status of your employee and leave with everyone happy.
i. If you are taking any personal belongings with you start getting quotes from removal companies and make a decision on who to go with. Get at least 5 quotes to be objective and ensure you are comfortable with the service, and get referrals.
j. Are you taking animals with you? If so do the same as above. Find out whether there are any special requirements you need to take into account when taking your animals with you. Do you need to keep them in quarantine and if so for how long, what documentation do you need to get for them and vaccinations?
k. Organise someone to take you to the airport.
l. Check on how you are all feeling, how are the kids doing and how do they feel about the move. Talk about it and let the kids know what is happening.
m. Have a farewell party for all of you, the kids and their friends and you and your friends. There needs to be some form of closure, and it will make you feel just how special all the people in your life are and how special you are to them.
n. Remember to keep contact details close at hand of everyone that is important to you.
o. See if you can find a personal relocator in the country you are moving too, they can be of great help too. I hope this helps in the process required to relocate. It can be daunting and unsettling, or an adventure, you need to decide how to perceive the move. In my next article, I will write about settling in and the processes you need to go through to do this.
xpatulator.com
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