Thursday, September 22, 2011

Hong Kong Purchasing Power



Does salary purchasing power lag in Hong Kong?

Accommodation, flights and education allowances are among the perks many companies use to entice their employees to move to places where the cost and quality of living might be very different to their countries of origin. Salary surveys indicate that managerial level expats in Japan receive the highest salaries in the region. Expats who work at the same level in Hong Kong reportedly receive an average of 18% less salary than Japan. However, the cost of living is on average just 16% lower in Hong Kong compared to Japan. That means that on average an expat manager in Hong Kong has 2% lower purchasing power than Japan. It is very important to take into consideration what the relative salary purchasing power is, the 2% difference between Hong Kong and Japan is relatively small, but some international locations have far larger differences in both cost of living and salary market.

Conduct a cost of living review for both the location you are moving from and to in order to get a feel for the differences in cost of living. To get a really detailed calculation of your current salary's purchasing power in the new location do a salary purchasing power parity calculation.