Xpatulator COLA Calculator - The Best Tool for Maintaining Your Standard of Living Abroad

COLA Calculator Example

Most companies that maintain a global workforce or regularly send employees overseas on special assignments offer a Cost Of Living Allowance (COLA). The purpose of a COLA is to partially offset the high cost of living overseas and maintain an employee’s purchasing power.

Disadvantages of Simple Cost of Living Calculators

Many COLA calculators simply apply a percentage adjustment between your current salary and the salary you would need to earn at the destination you are moving to, based on the overall cost of living. Simple calculators do not account your individual circumstances, family situation, or the value of any benefits that your employer may offer you. 

The Xpatulator COLA calculator allows you to run reports using many different scenarios. Depending on the benefits that are included in the offer, you can check to see what the affect will be on your actual purchasing power. The relative value of benefits such as housing and health care may far outweigh any disadvantages of your salary offer, such as accepting a compensation package tied to local pay rates.  

Customized For Your Situation and Lifestyle

The COLA calculator uses the cost of approximately 200 goods and services grouped into 13 different baskets, such as education, groceries and transportation. The baskets are then weighted based on surveys of how expat workers actually spend their money. You can choose which baskets to include in your calculation and which baskets to exclude.

Choosing Your Baskets

You may wish to eliminate certain baskets from your calculation based on your lifestyle, family situation or the benefits that your employer is providing. You might eliminate tobacco and alcohol as a lifestyle choice, education because you do not have any school aged children or plan to homeschool and household because the company will be providing housing for you. By removing these baskets the weight will be shifted to the remaining baskets. The amount of COLA that you require to maintain your purchasing power will be based on the expenses that you will actually be responsible for.

Accounting for Hardship

There are often costs of taking an overseas assignment that are more difficult to measure. Things like social freedom, personal safety and difficulties associated with not knowing the local language are broadly grouped as hardship. Xpatulator maintains a global hardship rating for over 700 destinations based on quality of life issues that foreign workers are likely to encounter. A relative difference in the hardship rating is used to add or subtract from your COLA calculation.

For example, transferring from a home location in Atlanta, Georgia, which has a hardship rating of 10%, to Sao Paulo, Brazil, which has a hardship rating of 20%, would entail a 10% relative difference in hardship. 10% of your inputted salary would be added to your calculated COLA to account for the additional hardship of relocating from Atlanta to Sao Paulo.

Adjusting Your Input Income

To accurately calculate your COLA needs, you should base your calculations on your net income, after taxes. Using the taxes you will be subject to at your host destination, determine how much COLA you will require to maintain the same after tax purchasing power at your host destination. You may need to contact tax advisers at home and abroad to confirm what your tax, withholding and tax return filing responsibilities will be.

If you are receiving benefits such as housing, private education and transportation from your company, adjust your income accordingly. Deduct the money that you would normally spend on those items from the portion of your income you use to calculate your required COLA. 

COLA DEMO

Four Cities You Should Consider Living In As An Expat

Xpatulator.com's Cost of Living Rankings always highlight the most expensive cities to live in as an expat, but what about the cheaper cities, the ones that will curl your toes, that are less costly, more interesting and offer great opportunities.  

Read more about four of the most overlooked cities where the cost of living is relatively low.

1. Dalian - The Back Door to China

China’s two largest cities - Shanghai and Beijing have been steadily climbing up the global cost of living rankings.

Shanghai breaking into the top twenty in 17th position, according to Xpatulator.com’s 2014 Q1 report. 

Beijing coming in at 28th spot. Why? Rising housing costs have made the biggest jump while everything from transportation to groceries has also been climbing.

However it is the little known Dalian that has a long history of foreign workers.

Dalian ranks 227th in the cost of living rankings of 780 locations. Compared to Shanghai, a luxury 3-bedroom suburban apartment will cost roughly half at $1271 USD per month in Dalian compared to $2371 in Shanghai. Taxi fares are also around 20% cheaper.  

In 2006 China Daily News ranked Dalian as China’s most livable city. For western workers, companies like Dell and Intel both have manufacturing and administrative offices here.

2. Budapest - The Unsung European Capital

Capital cities in Europe such as Stockholm, Paris and Oslo were near the top of the rankings, Budapest, the capital of Hungary, is the bargain city to be looking at. Budapest placed 536th out of the over 700 cities.

In a pub in Budapest you can expect to pay the equivalent of 89 U.S. pennies for a half liter bottle of domestic beer, while a local brew in Geneva, runs up to $2.54, nearly three times more. A four star hotel in Budapest averages $204 USD a night while in Geneva, expect to pay around $540.

The purchasing power parity (PPP) of the average Budapest wage earner is 147% of the average for the European Union as a whole. With nearly 400,000 companies operating in the city there are excellent opportunities in virtually every industry.

3. Cape Town - From Supply Stop to Global Center

This former colony has become a major international center. As the home of the South African Parliament, it also ranks as the manufacturing and business center for the southern part of the country. Almost every major international company has their manufacturing and operations headquartered here, including Johnson & Johnson, Levis Strauss and Adidas.

Despite its position as a global city, Cape Town ranks 550th on the Xpatulator.com global cost of living. Comparing costs it’s not hard to see why Cape Town is attracting attention among foreign workers. A Big Mac, can cost the equivalent of $4.18 USD, while the cost of private schooling - yearly tuition at an international school in Cape Town averages $8,320.

Cape Town is also actively promoting itself as a destination for foreign workers in key professions where it sees a skills gap. While unemployment in rural areas of South Africa is as high as 70% due to a large number of unskilled workers; teachers, engineers, medical and IT workers are in high demand and are eligible for special work permits through the S.A. Department of Home Affairs.

4. Calgary - Canadian Hub for Oil and Gas

Calgary is the booming center for Canada’s oil and natural gas industry, and it’s fastest growing economy. 

As the corporate headquarters for virtually every company involved in developing the Alberta tar sands, as well as renewed production from what is known in the industry as non-traditional drilling, Calgary is a bastion of stability in the global world of big oil.

Many expats are moving to this city from other places such as the volatile Caracas.

As the 87th most expensive city on Xpatulator.com’s latest report, Calgary is not cheap. When you consider however that the top 3 most expensive cities in the World are centers for oil and gas, Calgary becomes an attractive option. Canadian news agency, the Globe and Mail has reported that workers have been moving to Calgary “en mass” from the troubled oil fields of Caracas, Venezuela. Caracas ranks #2 and Luanda, Angola ranks #1 among the World’s most expensive cities.

  

In a global economy, international experience is a huge boost to personal marketability. As markets and businesses spill across borders and around the globe, the demand for skilled workers with international business experience and cultural sensitivity is growing. For experienced expat workers in many key positions there is also the prospect of an exceptionally high standard of living.

The new global cost of living rankings released by Xpatulator.com reveal that costs have risen sharply in many of the most popular destinations for expat workers, but there are still low cost cities with great opportunities.

If you are considering an overseas assignment you can access detailed cost of living ranking information on any one of 780 different locations through Xpatulator.com. Their online calculators also help you estimate the salary and benefits you will need to maintain the same purchasing power and standard of living on an overseas assignment.

Venezuelan Capital Tops List of Most Expensive Cities in the Americas

Caracas, Venezuela is the most expensive city to live in as an expat in the Americas.

According to Xpatulator.com's cost of living data collected for the April 2014 quarter, Caracas has dropped from being the most expensive expat city in the world to the second most expensive but it still tops the Americas list for foreign workers.

The ongoing rampant inflation, shortages and tight government controls on foreign exchange have continued to ensure that this South American city remains at the top of the rankings, keeping it ahead of Manhattan.  Manhattan which is the second most expensive city in this region, in contrast has well stocked boutiques, while shops in Caracas are suffering from shortages with long lines and bare shelves.  As the world's fifth largest exporter of oil, Venezuela was once a top destination for skilled foreign oil and gas works, this is being eroded by the strict government regulations that limit hiring and compensation for foreign workers and by the high cost of living.

The government price controls and official exchange rate of 6.3 Bolivers to the US Dollar have created a black market where products from cooking oil to rice is diverted to the Colombian border, creating prices that are 10 - 12 times higher. 

Canada is seeing an influx of skilled expat workers coming from this area, with a booming oil and gas industry growing in Calgary, which moved up the list from 101st to 87th most expensive city to live in the region as an expat.

Xpatulator.com provides up-to-date cost of living data for over 700 locations worldwide.

Top Ten City Rankings for The Americas

1. Caracas
2. Manhattan
3. Hamilton
4. George Town
5. Nassau
6. Sao Paulo
7. Brooklyn
8. Rio de Janeiro
9. New York
10. Toronto

For the full ranking list for The Americas go here.

Oslo Passes Two Swiss Cities to Become the Most Expensive City in Europe

April 2014 has seen Oslo, Norway jumping ahead of both Zurich and Geneva to become the most expensive European city for expats in this region and the world. 

The latest rankings saw Oslo move from seventh in the last quarter to third, while Zurich fell from first among the World’s most expensive cities in mid-2013 to sixth.

The one similarity between the cities of Oslo, Zurich and Geneva is that despite being part of the European continent, they are neither part of the European Union nor part of the European Economic Community. This means that Norway like Switzerland is free to set its own economic policies, it can therefore maintain aggressive tax rates to fund social programs. It also actively pursues social objectives through taxes on tobacco, alcohol and gasoline.

Although Norway has high wage rates, it also has a high cost of living as well as high taxes. There is very little difference between the lowest paid 10% of workers and the highest paid 10%, wages for restaurant workers, teachers, service people and unskilled labor are high enough for most workers to live comfortably. This concept of a living wage is highly ingrained within the Norwegian Social Value system, but allows every "class" of citizen to have a good standard of living.

Xpatulator.com provides up-to-date cost of living data for over 700 locations worldwide.

Top Ten City Rankings for Europe

1. Oslo
2. Zurich
3. Geneva
4. Monaco
5. Moscow
6. Copenhagen
7. London
8. Vaduz
9. Stockholm
10. Paris

For the full cost of living rankings for Europe go here.

Qatar Capital Doha Ranks as the Most Expensive City in the Mideast

Qatar once again tops the list of the Middle East's most expensive cities in the latest World rankings published by Xpatulator.com. 

Although it ranks first in this region, Doha's overall ranking is 89th in the World, making its cost of living comparable with cities like Manchester, United Kingdom and Calgary in Canada. The most expensive cities on the list were three other oil producing centers. Luanda, Angola ranked as the most expensive city for expat workers while Caracas, Venezuela and Oslo, Norway ranked 2nd and 3rd.

Compensation rates for upper-middle managers working in Doha are among the highest in the World and across the entire region, skilled expat workers enjoy generous benefits such as housing, transportation, education allowances and often companies include a trip home for the family on a yearly basis. 

Even though young Qatari nationals are encouraged by the government to study and enter the workforce, the reliance on expat workers continues. Top international talent will continue their influx into Qatar and its neighbors due to the generous compensation packages and relatively low cost of living.

Xpatulator.com provides up-to-date cost of living data for over 700 locations worldwide.

Top Ten City Rankings for The Middle East

1. Doha
2. Jerusalem
3. Abu Dhabi
4. Dubai
5. Beirut
6. Tehran
7. Manama
8. Kuwait City
9. Amman
10. West Bank

The full overall cost of living rankings are available here