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Hank_Wanker
Newbie

Joined: May 30, 2007
Posts: 4

Posted: May 31, 2007 - 02:39 PM
Post subject: Expatriate packages

I'm currently negotiating my package for a 2 year "stint" in Shanghai, what is "normally" included for you guys here on proper expat packages.
Salary is not an issue, but the perks are.
This is a new position, so the company have not set the standards.

I've asked for, housing (4000 USD), car & driver, Housekeeper, 3 flights home per year, 30 days holiday, insurances. Is this the norm? we don't have kids so schooling is not required.

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Angie

LoopKicker

Joined: Feb 01, 2004
Posts: 848

Status: Offline

Posted: May 31, 2007 - 03:39 PM

add school to yoru contract, too. In case you get some you don't have to re-negotiate the contract.

Angie

LoopKicker

Joined: Feb 01, 2004
Posts: 848

Status: Offline

Posted: May 31, 2007 - 03:41 PM

you can also pay the housekeeper from your pocketmoney, so better ask for a high salary (coz it will stay even if you're repatriated) and forget about the housekeeper. Better to have a high reference salary than high perks.

jarrmatey

Talker

Joined: Apr 18, 2007
Posts: 99
Location: Shanghai
Status: Offline

Posted: May 31, 2007 - 04:05 PM

What country are you coming from, how long have you been with the company and what will you be doing?
If you're coming from the US and have been with your company for say, less than 5 yrs, I'd be very surprised for you to get 30 days holiday. Plus you've got to remember that here there's a week for Chinese New Year, another for Labor and another in October. If you're coming from Europe I know that they're much more generous with vacation time and that might not seem like such an outrageous request. I just get one economy class trip home a year so try to get business class. Angie is right about the salary though, you've got a good opportunity to save a lot of money while here. I don't know what you'll be doing, but some of your request seem a bit larger than what I've heard (but not for all). Since this is new for your company you might as well push the limits.

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Hank_Wanker
Newbie

Joined: May 30, 2007
Posts: 4

Posted: May 31, 2007 - 04:33 PM

Thanks for the advise so far.
I'm european, and in divisional senior management, will be working for a european company. I'm working in SEA at the moment, and have been an expat for several years. This is not a posting for my current employer, but a new appointment, and as part of the deal, I will not be required to spend more than two years in SH, and then be moved to a SEA location.

I've found that there are a lot of difference between packages offered in various countries, such as car and driver, e.g. common in Indonesia, not common in Singapore.
I realize that Gong Xi Fa Cai gives me a week off, but for travel purposes, this period is usually a nightmare, at least in SEA.
The salary has been agreed, and without knowing nearly enough about the cost of living in SH, I recon I'll be comfortable. And from rental prices I've seen on websites, 4k is a reasonable housing allowance.
The "home" flights are to SEA, as I have my house here, so 3 flights is not far off the cost of 1 to Europe/US.
I tried to find some salary info on various web pages, and it seems to be ranging from "going hungry" to 7 Days of fine dining, so I've negotiated based on a western european scale.

I'm not going to China for the fun of it, but to make money, and I want to live well while doing it. That said, it's always exiting moving to a new country, and I've only spent limited time in Shanghai, so it'll be an experience if I decide to take the job.

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Michael

Moderator

Joined: Mar 22, 2002
Posts: 5291

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Posted: May 31, 2007 - 04:34 PM

Depends on the level and the company. 30 days and 3 trips home does seem like lot - your vacation says should roughly match your company standard in your home country.. and then you take a few days with the week long chinese holidays for effect.

jarrmatey

Talker

Joined: Apr 18, 2007
Posts: 99
Location: Shanghai
Status: Offline

Posted: May 31, 2007 - 04:49 PM

Given your situation is does not sound as though you are being unreasonable. But with your position I would definitely try for a car and driver.

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answerer

Raver

Joined: Apr 26, 2006
Posts: 453
Location: Shanghai
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Posted: May 31, 2007 - 10:52 PM

Sounds about right. Unless you get ripped off, you shouldn't need anything more than 3000 USD for housing for 2 people. There are only a few places in Shanghai that cost more than that and in my opinion, they aren't worth the money.

Since you sound like a seasoned expat already, you really don't need our advice. Expat packages are more of less the same around the world.

Get the company to include utilities in the housing allowance.
Car and driver are common in places where car ownership and labor costs are relatively low. Ie Very unlikely to get one in HK, SG and Tokyo, but elsewhere in Asia, there's a pretty good chance.
Make sure insurance is the "expat type", covering a "western" hospital
Do you normally get tax equalization? Taxes in China are quite high (about US levels) and equalization can be worth 30-40%

rxg

Raver

Joined: Sep 06, 2005
Posts: 457

Status: Offline

Posted: May 31, 2007 - 11:04 PM

Everything sounds about right except the 30 days vacation. But if your are from Europe, maybe that is normal. Ask to go home 4 times per year. Definitely tax equalization. At the end of the year get your own tax lawyer. You tend to get the short end of the stick if your coporate tax lawyer do your tax.

horsemandk

StreetBeater

Joined: Mar 23, 2006
Posts: 2241
Location: Shanghai
Status: Offline

Posted: June 01, 2007 - 11:11 PM

The packages are shrinking very fast now and you're lucky if there's anything to negotiate.

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Lappen

Barker

Joined: Oct 29, 2005
Posts: 152

Status: Offline

Posted: June 02, 2007 - 04:06 AM

It seems OK to me. Also the vacation 30 days. Agree that you should increase salary and pay ayi yourself. Good luck!

redtab1

Reacher

Joined: Mar 10, 2007
Posts: 213

Status: Offline

Posted: June 02, 2007 - 06:22 AM

I have a housing allowance for $4500 USD a month and have used every cent although it is a very big apartment ( 240 square metres - bigger than my wife and I need) and the building is very nice. The apartment is cleaned twice a week and fully furnished with high quality furniture and has two plasma screen TVs, satillite TV and wireless internet. The complex has a gym, tennis court, very large out door pool, 24 hour front desk etc. The apartment is in the French Concession. I know our relocation company bargained hard on the rent. However, I am sure you can find something similar for $4000USD. I am the General Counsel for a large multinational and my package includes car and driver, full western life and health insurance, hardship allowance, wife intergration allowance, rellocation allowance and a return home leave allowance. I do not have a set number of trips, rather there is a set budget and it is based on FULL Economy travel - full economy is actually very expensive and it is easy to find a discount business class fare for the money. I have 21 days leave plus all the public holidays. Also get language training for my wife and I. With cleaning twice a week no need for an ayi

knockknock

Lurker

Joined: June 02, 2007
Posts: 24

Status: Offline

Posted: June 02, 2007 - 08:38 AM

I am posting a quick note of my package for comparison. I will be moving to SH in August this year for a 2 yr. contract.
I am a sr. mgr. for a large US multinational. We are a family of 4 with 2 school age children.

1. Housing: 52,000 RMB per month
2. Domestic Help: 2,000 RMB per month
3. Car / Driver: 15,000 RMB per month
4. School tuition for the children
5. US$5000 spousal assistance for the whole 2 yr.
6. R&R once a year that can be taken after 6 month.
7. Annual home leave / taken after the 1st year.
8. Transfer premium: 13% of salary
9. Hardship (Shanghai): 15%
10. COLA US$17,000 annually.
11. Relocation Assistance (use to restock food??): US$7,000

All of the others, I think, are pretty standard: health insurance, tax equalization, shipping, moving, storage, relocation.

After reading about other packages, I think our company is pretty generous. I hope they don't change anytime soon. Smile

answerer

Raver

Joined: Apr 26, 2006
Posts: 453
Location: Shanghai
Status: Offline

Posted: June 02, 2007 - 10:35 AM

Important note: With the RMB expected to appreciate 5% a year, it is highly advisable to negotiate at least part of your salary (enough to cover living expenses) to be paid in RMB. Otherwise, you can watch your purchasing power slide downwards everyday...not fun!

sinned69

SuperStar

Joined: Sep 01, 2004
Posts: 1511
Location: China, Middle East, Asia Pacific
Status: Offline

Posted: June 02, 2007 - 11:09 AM

my 2 cents...
IMO your package is pretty on par, though its hard to guage completely without being able to factor in the salary.

I don't think you are being unreasonable with the holiday allowance at all, it's actually same as mine, which is dependent on what professional field one is in. also one needs to consider what other markets can bear or offer, this is how i wrote my own contract and i mean that literally.

you might also consider more on taxation issues, superannuation contributions, language/cultural assimilation classes/learning, medical insurance that covers the use of expat facilities as opposed to local ones, as there's a huge difference. how about relocation allowance?

you should build into your contract schooling, even though at the moment you don't have children -you never know what may arise in the very near future Wink

make sure you have currency conversion or salary delineation etc covered. Smile

lastly, make sure that its all in writing but just remember that in Chinese eyes, contract is paper -worthless it means nothing. Yes maybe it is an WOFE, JV, or European company, still it will have some facet of localisation
-just be careful if the operation is handled by the Chinese managers or counterparts.
Don't mean to sound alarming, but many games and tricks played here in China.

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Last edited by sinned69 on June 02, 2007 - 12:31 PM; edited 1 time in total

hautumncloud
LoopKicker

Joined: Nov 04, 2006
Posts: 911

Posted: June 02, 2007 - 11:31 AM

answerer wrote:

The COLA should be adjusted periodically to cover for the slide in exchange rate.

redtab1

Reacher

Joined: Mar 10, 2007
Posts: 213

Status: Offline

Posted: June 02, 2007 - 02:03 PM

Knockknock, sounds ok altough I think you are getting duded a bit on the spouse allowance, transfer premium, hardship and COLA - looks like half of what you should be getting.

Hank_Wanker
Newbie

Joined: May 30, 2007
Posts: 4

Posted: June 02, 2007 - 04:07 PM

Thanks guys, some interesting thoughts here. Packages will vary a lot, and I have friends here who are willing to take good "local" salaries without perks, to continue to live here. I'm sure those can be found in SH as well.
Spouse allowance is an interesting perk, which I've never had, but I will give it a go on this one.

I'm in a lucky situation, as the company approached me, not the other way around.

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Victorian

Reacher

Joined: May 03, 2004
Posts: 367

Status: Offline

Posted: June 02, 2007 - 05:20 PM

Add the SOS Medical Evacuation as well.

redtab1

Reacher

Joined: Mar 10, 2007
Posts: 213

Status: Offline

Posted: June 02, 2007 - 05:36 PM

yep - sos is one I would certainly push for

knockknock

Lurker

Joined: June 02, 2007
Posts: 24

Status: Offline

Posted: June 02, 2007 - 09:49 PM

Thanks redtab. I did make a mistake with the spouse assistance. It's $5K per year. Unfortunately, the percentages for hardship/transfer premiums and COLA are set by HR per company policy. So they weren't quite negotiable. But I am surprise to see that the hardship premium for SH would be 30%/year and a transfer premium of 26%/year would be more of a norm? That would be quite a boost to your salary....a good thing.

canuckyyz

Reacher

Joined: Feb 13, 2007
Posts: 223
Location: Canadian living in Shanghai Lujiazui
Status: Offline

Posted: June 02, 2007 - 10:59 PM

Hardship - I received 25% in Beijing and R&R every 3 months. Shanghai is down to only 15% with R&R every 6 months. R&R is 1 week in Singapore or other recognized vacation destination with all expenses paid (I go to Thailand and play golf.) The US Government publishes some hardship tables that you can view on-line. Some of my acquaintances out in the smaller cities of China have R&R only every 4 months but they also have a shopping weekend Fri-Mon in Hong Kong every 4 months so they alternate and are out of the country every 2 months either for shopping or R&R.

COLA - Cola is normally based only on the spendable portion of your income so if you car and housing are provided then your COLA will be quite low. Mine is currently just under 10% but is tax free.

Tax equalization or tax protection is the norm.

Housing and all utilities should be paid directly by the employer or paid by you and refunded by your employer. (You will need "fapio".) Price Waterhouse Coopers advised me that this was important because a "housing allowance" paid to me directly would be taxable.

Dislocation: Since I an not working in the home office so I am out-of-sight for promotions. Wife's income also lost. So I get 15% non-taxable.

On Call - I get 5% non-taxable since there is 12 hours time change between the home office and China and people phone me in the middle of my night.

Blue Cross - 100% medical and dental coverage.

SOS or similar - it is great service!

Car & Driver at least M-F. You might want to drive by yourself on the weekend. It is far less intimidating than is seems from the back seat of a taxi. I have driven about 36,000 km in my first year in China and got a much better perspective of the country. You and the wife could have a weekend getaway in another city without the inconvenience of a driver.

Good luck!
DK

answerer

Raver

Joined: Apr 26, 2006
Posts: 453
Location: Shanghai
Status: Offline

Posted: June 02, 2007 - 11:37 PM

I was quite surprised to find that I got higher hardship, COLA, and R&R in Shanghai than I did in Mexico City. Shanghai is actually much safer, less polluted and cheaper than el DF!

Reacher

Joined: Oct 08, 2006
Posts: 208

Status: Offline

Posted: June 02, 2007 - 11:47 PM

my company has this strange policy where COLA and R&R are lower the closer the country is to the US. the irony is that our package in China is similar to that in parts of Africa. I would really suggest your company hire you a car and reliable driver....my wife uses it most of the time, but it allows her to be mobile and we can sometimes have the driver take us out of Shanghai on the weekends, for which we need to pay the driver a slight supplement as the contract only covers the Shanghai metropolitan area.