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Salary cut from company for relocating to Hong Kong

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  1. #1

    Salary cut from company for relocating to Hong Kong

    Hello!
    I've been working in HK on assignment the past year and now my company is offering me a relocation package and become a local employee (from US to HK). I thought I was going to be taken care of by my company since i've been with them for many many years, but instead I'm getting a 40% pay cut because of the lower income tax. Is what they are doing reasonable? I feel like the income tax should benefit me and not the company. Everything else in the relo package looks fine except for the significant salary drop. I think i'm still getting paid more than other people with the same title in the region, but I just don't think it's right to cut my salary by that much.
    Thanks in advance


  2. #2

    Join Date
    Aug 2009
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    are you a US citizen?


  3. #3

    yes, i am


  4. #4

    Join Date
    Aug 2005
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    Clear Water Bay (In Da Jungle)
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    Dual tax and a 40% pay cut WTF, nothing reasonable about it. Re-Negotiate

    imparanoic and MandM! like this.

  5. #5

    Join Date
    Aug 2009
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    indeed. your HK tax benefit doesn't even apply if you move to HK


  6. #6

    Join Date
    Dec 2013
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    It's like any other decision - agree if you agree and if you don't; leave and find another job. There is no such thing as "fair". Is it "fair" that you would get paid more than other local employees? I suspect the real reason from the company has far more to do with that and they were using tax (possibly inadvisably) as an excuse.

    MandM! likes this.

  7. #7

    Join Date
    Jan 2008
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    To the op, I presume you are aware that you still have to pay us tax regardless where you move, hence, double tax


  8. #8

    Join Date
    May 2006
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    No it's not fair to you but could the employer get someone to do the job on a lower salary? Do you have special skills or knowledge?


  9. #9

    Join Date
    Oct 2012
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    I know of people who have come to HK and got a lower salary, but with the combined lower tax and housing allowance, it worked out to more. Has the company offered you a housing allowance? Given the extraordinarily high rents here, it would be unreasonable to accept a 40% pay cut simply because of rent alone, unless they were somehow taking care of this.


  10. #10

    Join Date
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    If you are a US citizen working for a US company, very often they will try to tax equalise you. That means that they will make an estimate that your after tax pay would be the same. This is common practice when relocating around the USA as different state and city taxes apply say between Dallas and New York.

    The US federal tax scheme only kicks in at a relatively $99,200 + and in most US states, by leaving for HK you will be exempt from state and city income taxes.

    What this fails to take into account is the high cost of living in HK and the fact that by being expatriate you still face US related costs (eg 401k, tax filing, health insurance etc).

    First step I would do would be to ask why the pay cut and how they calculated it.

    wtbhotia, shri and z754103 like this.

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