Salary differential from NYC

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  1. #1

    Salary differential from NYC

    Hello all,

    This is my first post. I am considering a job offer from a financial services institution as a product manager. I currently work for the same company in New York City, and am trying to figure out how much higher the salary "should" be. Currently, they haven't offered any sort of expat benefits or housing allowance.

    According to the recent Mercer survey, Hong Kong indexes around 115 on cost of living, vs. 100 for New York (linear scale I think). Although, when I spent about 2 months in HK earlier this year, it seemed about as expensive as NYC (eating, drinking, transport).

    Would appreciate any advice or opinions. Dpes 15% higher (overall) for HK vs. NYC make sense?

    Thanks!


  2. #2

    Join Date
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    Remember that the tax rate in HK is 16% flat, and no sales tax. For a net salary in HK that is 15% higher than NYC I guess you would need a gross salary that is pretty similar...

    You should get one time relocation costs though - removal expenses, serviced apartment for 2 or 3 weeks while you find somewhere to live, etc.


  3. #3

    Join Date
    Nov 2005
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    That is not quite correct.

    The tax is 16% max. Tax is calculated on the annual salary and is paid annually.

    First, there are about HK$ 100,000 tax free per adult; and about 30,000 per child (changes every year).
    The next HK$ 30,000 are taxed with 3%.
    The next HK$ 30,000 are taxed with 7%.
    The next HK$ 30,000 are taxed with 15%.

    The rest is taxed with 23%.
    (something like that, I might miss here one step and the rates might be a bit different.)

    Overall, the tax payed shall not exceed 16% of the gross salary.


  4. #4

    Join Date
    Feb 2006
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    HK housing, by and large, is more expensive than NY prices, at somewhat lower quality, although it depends what districts you're comparing with each other.


  5. #5

    Join Date
    Jul 2006
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    HK taxes are lower, and taking away housing expenses, I would not think HK is 15% more expensive than NYC. If you are with a multinational financial institution, you can always check with your friendly HR or Finance person for the staff pay scale in your HK office. Otherwise, try to search for a salary survey report of reputable headhunters.


  6. #6

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    Bear in mind that if you are a US citizen or green-card holder, you are taxed globally. You do get a break (the first US$80k and change is exempt) but you do get taxed on the rest. Some firms do tax-equalization for their employees so you are no worse off or better off than you would be if you were in the U.S.


  7. #7

    Join Date
    Feb 2006
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    On that good point, remember that the proposed changes to the US tax laws for expats, if imposed, would disadvantage people living in HK, given the changes to how housing allowances will be taxed. Under the proposed amendments, people working in low taxation, high housing cost areas will be worse off.