Author Topic: seeking expat package negotiation advice  (Read 4466 times)

duellingbanjos

  • 5 O'Clock Shadow
  • *
  • Posts: 26
seeking expat package negotiation advice
« on: October 26, 2014, 08:48:35 PM »
Hi all, new poster.

Sorry for the vagueness, but I don't want to describe my situation too explicitly for fear of iding myself.

My employer is proposing an overseas move, for a few years but may be permanent. This move would be inconvenient for us in many ways as we have young children.

My ultimate question is - what kind of premium is worth it, if the move isn't really a step up career-wise? 100% of base salary on top of all expenses paid to replicate our standard of living here? 50%?

Any comments/thoughts appreciated.


Ynari

  • Pencil Stache
  • ****
  • Posts: 558
  • Age: 28
Re: seeking expat package negotiation advice
« Reply #1 on: October 27, 2014, 01:38:34 AM »
Sounds like a question you and your employer would have to come to an agreement on.

Personally, with no children etc., I would take an overseas move if they covered moving costs, a cost of living adjustment, and a standard raise.  But I like moving and have done it all my life (military dependent.)

Have you looked at what all the costs will be when you move?  Will they arrange the moving services, or will you have to do that?  Will you have to put your kids in private/international school?  Will you gain or lose benefits like health care?  Will it be difficult to move back if you decide you don't like it there, limiting your career options?  Think through all your expenses and current benefits, and actually calculate the amounts.  Ask for a raise and ask them to also give you a bonus/allowance/stipend for the expenses you found.

bluecheeze

  • Stubble
  • **
  • Posts: 114
  • Age: 34
Re: seeking expat package negotiation advice
« Reply #2 on: October 27, 2014, 01:41:48 AM »
It really depends on your financial situation, but remember to calculate everything into the equation-
Will they pay for housing? Paid meals? Furnishings? Re pat trip stipend?  Remember (if US) you get an approx 100k exemption from taxes off the bat.  Will they subsidize the remaining taxes for you?  Will they pay for your children's education?  International healthcare?  You won't pay FICA taxes unless it is a US based company so that is a net increase in your pay.

I decided to move for a somewhat similar base salary (25k increase), but my net increase is well over 250k when I factor in all of the above.  For every one year I stay here I would have had to work for 5 years in the US to have the same savings.

former player

  • Walrus Stache
  • *******
  • Posts: 6693
  • Location: Avalon
Re: seeking expat package negotiation advice
« Reply #3 on: October 27, 2014, 02:21:27 AM »
First thing is: will your contract of employment still be under your existing contract of employment, or will they try to turn you into a local employee in the new location?  Continuing your existing contract is the one which brings the potential benefits of expat extras.  But you need to make sure that it is not terminable at will once you have made the move, and to check out how you could legally enforce the contract once you are abroad.  How good are the legal systems in the country you are moving to, would any of their laws apply to your employment (local taxes?), and how much skin does your employer have in that country's game - does it have assets there you could claim in order to get you and your family home if you needed to? 

Terms you could be looking at are:

allowance for living abroad
housing suitable for family
moving expenses
education for the kids
travel home for family (no. of times during contract, repatriation at its end)
health care.

I would expect that with expenses paid and a modestly reasonable lifestyle abroad (ie not necessarily going "the full ex-pat"), for working abroad you should be looking at clearing at least twice what you do at home.








NewbieFrugalUK

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Re: seeking expat package negotiation advice
« Reply #4 on: October 27, 2014, 02:26:27 AM »
Make sure education for your children is included, as international schools in some places can be very expensive. Sounds like an opportunity worth siezing - living in another country can be very rewarding (not only financially!)

ken

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: seeking expat package negotiation advice
« Reply #5 on: October 27, 2014, 06:15:50 AM »
As previously posted, most companies have set policies. Mine offers 'full expat', 'modified expat' and 'cross boarder hire'. One can negotiate on which package they receive but the not on what is in the package so they can keep things standardized.

Cross Border includes:
Full relocation
Pay in local currency
Settling in services (work permit, realty services, etc)
Local Healthcare
Local employee benefits

Modified expat includes:
Full relocation
Pay in home currency in home bank
All home benefits (home rate of earned vacation, 401K,etc)
International healthcare (provided at rate of home healthcare)
International school tuition for dependents
Coverage of money transfer fees (2 per month)
Tax preparation services
Full relo back home at end of assignment (even if you quit as long as you were there 12 months.)
Paid airfare home for family emergency/death back home.

Full expat has all of modified plus:
Tax equalization (company pays all taxes and you pay what you would have paid if you never left)
Guaranteed position when assignment ends (6 months pay until you find job internally then severance if no position)
Cost of living adjustment (based on country cost of living compared to home)
Paid housing (less a norm allowance of what a typical family would pay at home)
Annual family home leave (paid airfare and rental car)

This is all just off the top of my head. It can be a tremendous experience personally and professionally. A family has to really want that type of experience. Families that don't embrace it or do it just for the money can be miserable. A failed expat assignment is very expensive for an employer.

Malaysia41

  • Magnum Stache
  • ******
  • Posts: 3324
  • Age: 48
  • Location: Verona, Italy
    • My mmm journal
Re: seeking expat package negotiation advice
« Reply #6 on: October 27, 2014, 06:32:34 AM »
As previously posted, most companies have set policies. Mine offers 'full expat', 'modified expat' and 'cross boarder hire'. One can negotiate on which package they receive but the not on what is in the package so they can keep things standardized.

Cross Border includes:
Full relocation
Pay in local currency
Settling in services (work permit, realty services, etc)
Local Healthcare
Local employee benefits

Modified expat includes:
Full relocation
Pay in home currency in home bank
All home benefits (home rate of earned vacation, 401K,etc)
International healthcare (provided at rate of home healthcare)
International school tuition for dependents
Coverage of money transfer fees (2 per month)
Tax preparation services
Full relo back home at end of assignment (even if you quit as long as you were there 12 months.)
Paid airfare home for family emergency/death back home.

Full expat has all of modified plus:
Tax equalization (company pays all taxes and you pay what you would have paid if you never left)
Guaranteed position when assignment ends (6 months pay until you find job internally then severance if no position)
Cost of living adjustment (based on country cost of living compared to home)
Paid housing (less a norm allowance of what a typical family would pay at home)
Annual family home leave (paid airfare and rental car)

This is all just off the top of my head. It can be a tremendous experience personally and professionally. A family has to really want that type of experience. Families that don't embrace it or do it just for the money can be miserable. A failed expat assignment is very expensive for an employer.

+1