The United Kingdom is the priciest country for employee relocation, with expatriate annual pay and benefits costing businesses an average of £351,992 ($486,243) in 2022, marking an increase of £33,887 ($46,864) or 11% from the previous year. This is according to the latest data from ECA International, a global mobility expert. More than half of the increase stemmed from the rising costs of typical expatriate benefits, such as accommodation, international schools, or cars.
ECA International conducts an annual MyExpatriate Market Pay Survey to help businesses benchmark their staff relocation packages against the market. The survey takes into account three key elements: benefit allowances, cash salary, and tax treatment.
Oliver Browne, Remuneration and Policy Surveys Manager at ECA International, pinpointed the escalating cost of benefits and exchange rate changes as significant factors in the UK retaining its status as the most expensive country for expatriate assignments. Rents in the UK soared by 15%, pushing up the overall cost of benefits. At the same time, average salaries grew by 5% to £63,250 ($87,412) for middle management positions, bringing the UK’s salary ranking down to the 28th place worldwide.
Switzerland follows the UK as the second most expensive European country for expatriate pay and benefits packages, with an average annual cost of £212,880 ($294,577). It also boasts the highest salaries in Europe, at £77,760 ($107,548) per annum.
“Swiss salaries consistently rank at the higher end of the scale,” Browne said. “However, the higher prices in most Swiss cities are balanced out by the high salaries, making locals well-off compared to their European counterparts.”
Italy emerged as a more competitive location for staff relocation due to lower taxes. Despite a 4% increase in salaries and a 7% increase in benefits costs, the total cost of sending a middle manager to Italy only grew by 1% to £147,145 ($203,565).
In contrast, the strength of the US dollar led to the United States rising seven places into the global top ten most expensive locations for employee relocation. Despite a slight decrease in salaries, the total package cost grew by 6% to £217,417 ($300,753), largely due to higher housing costs.
Interestingly, Saudi Arabia offers the highest salaries for expatriate middle managers worldwide, despite a 3% decrease from the previous year. With an average salary of £83,763 ($115,780), the Middle Eastern country pays £20,513 ($28,366) more than the UK.
Meanwhile, the pay gap between the UK and Japan, the second most expensive location globally, has widened. Although Japan saw a 5% increase in expat pay and benefits in local currency terms, the weak Japanese yen led to an overall cheaper package when converted to GBP, costing £295,062 ($408,096).
