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How far your expat salary will stretch in Shanghai

Shanghai Expat Forum Index » City Living Forums » Relocation and Moving

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ladylady

Reacher

Joined: Aug 29, 2007
Posts: 284

Status: Offline

Posted: Jan 13, 2009 - 10:19 AM
Post subject: How far your expat salary will stretch in Shanghai

Since the other thread on this topic has been cluttered by a lot of irrelevant banter, I’ve decided to post my two cents input to this question in its own thread. I hope others with relevant input will follow suit.

I think the really big ticket items in Shanghai are housing and schools, followed closely by eating a Western diet (especially a processed and packaged American diet), and traveling/entertainment.

1) Housing

Shanghai is the New York City of China. If you live in a suburban middle class house – and want a comparable environment in Shanghai, expect to pay A LOT for it. Some ex-pats have housing ‘packages’ of $8,000 and up per month. Usually the company has the employee pays some amount ($1,500 - $2,000 per month or so) in housing and the company pays the rest.

Of course, if you are single, a couple, or a couple with a small family, you may be happy to live in an apartment (like the other 20 million Shanghainese), and the housing price can be comparable – even if the housing standard is not (i.e. smaller, not as well equipped or furnished as what you may have had at home).

2) Schools

School will cost $20,000 or more per kid, per year for international school. Yes, there are some less expensive options (second tier international schools, international divisions of local schools, local school (in Chinese) for very young kids, or home schooling) but frankly, for most ex-pats, these are not acceptable options.

Many ex-pat packages cover international schools.

3) Eating

Eating can be very cheap if you eat whole foods (fresh meats, vegetables, and grains) purchased from local markets/supermarkets and enjoy authentic Chinese Restaurants.

However, it can get very expensive, very fast if you don’t. Yes you can get Ragu spaghetti sauce, Hamburger Helper, and Lucky Charms in the import section of the supermarket or at the specialty imported supermarket but you pay a huge premium. Families with kids who cannot adapt to local food spend A LOT on groceries ($10 for a small box of cereal, $7 for a jar of Ragu). Cheese, good beef, nice wines are all things that you will spend more on here than you would at home.

Eating at good quality Western Restaurants (i.e. not Burger King, McDonalds, or KFC) will be expensive. There are no inexpensive options. Drinking is especially expensive.

My family tries to split the difference, having the ayi do the shopping and cooking Chinese for us 5 days a week – and then splurging a bit on western food on the weekend.

4) Traveling/Entertainment

You will be in Asia! There hopefully will be loads and loads of places you want to see and that costs money. You may spend more on travel – going to the Great Wall, Thailand, Australia, etc.. Again, while budget travel is possible, you may find yourself booking with ex-pat oriented tours or staying a Western branded hotels to help you overcome the language barrier and cultural differences in the places that you go to.

Also – Western oriented entertainment comes at a western price. There are expat woman’s club activities, bike groups, laser tag, go-karting, movies, sports and camps for kids, etc… but they cost western prices. You may find yourself paying for entertainment then when at home you might have participated in clubs or did things with friends without the high cost to participate. These costs will go down as you develop friends and find things you like to do on your own.

seanryan471

Reacher

Joined: Aug 08, 2008
Posts: 307

Status: Offline

Posted: Jan 13, 2009 - 12:13 PM

^A good post. You left out many important "big ticket" items, though. Taxes, health insurance, and home leave spring to my mind immediately. There are also some important, but potentially "smaller ticket" items such as languange classes and cultural orientation. The problem still remains. We are trying to give advice on an unspecified expat package to an unspecified family. So, in response to how far she can stretch her expat package I think....
<--------------------------------------------------------> that far.

My two cents.

chingiskhan

Wonder Wit

Joined: Apr 24, 2007
Posts: 3680
Location: Shanghai
Status: Offline

Posted: Jan 13, 2009 - 12:38 PM

Geat. Just what we need. ANOTHER thread on the same topic because there aren't enough already!

Admins? Where are you?

Renovator

FooJay

Joined: Apr 18, 2007
Posts: 1634
Location: Century Park & MA,USA
Status: Offline

Posted: Jan 13, 2009 - 02:06 PM

You can get around Shanghai by subway and occasional taxi. Some expats need to go everywhere by private chauferred cars and taxi. I would think this could be big ticket as well.

Then of course clothing and accessories for those that wear Armini, Cartier, etc. vs the knock offs and fakes available here and the list goes on, and on and on.

ladylady

Reacher

Joined: Aug 29, 2007
Posts: 284

Status: Offline

Posted: Jan 13, 2009 - 03:56 PM

seanryan471 wrote:

^A good post. You left out many important "big ticket" items, though. Taxes, health insurance, and home leave spring to my mind immediately.

A decent expat package should include tax preparation and tax equalization as well as global health insurance coverage, if it doesn't, and the empoyee has to cover these things out of pocket, then yes, big ticket!

The point about home leave is good - even though companies often pay for 1-2 trips, what happens if you need/want to go back for a family gathering? or to see a specialist doctor - yes that can get expensive!

(And chingiskhan - the OTHER thread is huge bitch session about the OP's lack of information and NOT about the cost of being an expat in Shanghai!)

rxg

Raver

Joined: Sep 06, 2005
Posts: 496

Status: Offline

Posted: Jan 13, 2009 - 04:23 PM

If you need to see a specilaist or have to have an operation, the company will also pay for the airfare to transfer you back to your country (assuming it is not a third world country you are from).
The original OP's question is really too vague and you are very kind to lay it all out.

Some people are very annoyed or jealous at some expats because not all expats packages are created equal.

Would you call a Phipino maid an expat since China is really not her/his country? Based on this, therefore I think the original OP's question is unanswerable since she did not give any details of the package.

*Sarita

Reacher

Joined: Jan 26, 2008
Posts: 235
Location: Shanghai
Status: Offline

Posted: Jan 13, 2009 - 07:35 PM

Tax equalization would not be important to everyone. Some countries have hight income tax than China. Same goes for the health insurance. Since the OP didn't tell us where she is from it's hard to determine what the difference in costs for her would be as we have no idea what her costs are now.

ChiBob
Barker
Barker

Joined: Nov 04, 2008
Posts: 199

Posted: Jan 14, 2009 - 05:53 AM
Post subject: Re: How far your expat salary will stretch in Shanghai

ladylady wrote:

Some ex-pats have housing ‘packages’ of $8,000 and up per month.

8000usd housing allowance should get you a nice place in Richgate??
Realistic...Certainly some have Housing packages still at this level, but for the layman expat, numbers like this are quite infrequent, and if you have a package like this now, bless you, but you probably won't for long.
More typical expat housing benefits will range 2-5000usd monthly, scaled to family size. The bigger the family, the bigger the number. Numbers are Net.
You can live very nicely, in a nice place in Shanghai within that range.

DesertSpider
Post Boaster

Joined: Jan 19, 2007
Posts: 4725
Location: SHANGHAI, CHINA

Posted: Jan 14, 2009 - 12:54 PM

Here's the big stuff:

SALARY:
• Needs to stay the same or increase based on the assignment and relative cost of living adjustment (online calculators for this)
• Depending on how long your stay is (short term: < 5 years or long term: 5 years or more), decide whether to get paid in your home country to your home bank and pull money into China as necessary OR to get paid to a Chinese Bank (lots of discussions on this, search the forum)
o All ATM transaction fees expensed to company (pull system: currency into China as necessary)
• Bonuses: company and position dependent

EXPENSE ACCOUNT / CO. CC:
• Co. credit card / expense account [most places accept VISA, some MC, be warned: very few accept AMEX]
• Entertainment account (depends on job and function)

HEALTH CARE / INSURANCE:
• Full medical, dental and vision coverage
• Medical Emergency Evacuation is available (only if absolutely necessary to somewhere like Hong Kong, then to U.S. if severe injury or illness)

RETIREMENT / 401k + STOCK: (usually all performed in home country)
• Stock options dependent on business unit, function and responsibility
• Company stock purchase plan
• 401k contributions – company match

HOUSING:
• Housing allowance - anywhere from $1k USD on the low end to $3-6k USD average to $10k USD on the ultra high end

HOUSING EXPENSES:
o Utility expenses

TRANSPORTATION:
• Personal driver and vehicle provided

COST OF LIVING ALLOWANCE:
• Stress allowance - this is usually used for stuff like cultural and language classes and other 'adjustment' type issues

EDUCATION:
• Depends if you have kids in school or not, international schools are expensive

TAXES:
• Equalization provided – difference (any increase or offset) covered by company

TRANSLATOR:
• Business / office assistants for travel, logistics, legal, technical translation as necessary

LEGAL ASSISTANCE:
• Corporate law firm / legal representation available

MOVING / RELOCATION:
• Shipping containers and relo costs provided for future move(s)

ADDITIONAL TRAVEL:
• Flights home X per year for company related business, X tickets for personal leisure per year

rxg

Raver

Joined: Sep 06, 2005
Posts: 496

Status: Offline

Posted: Jan 14, 2009 - 01:27 PM

Spider - you covered it all on the above post. Some of the iems above might be foreign to some of the expats on this forum.

My company is sending the one with children and the annoying wives home for good. We are bring in more single expats (no school for children or 10K USD housing). All the above still apply.