Are you an expat living and working abroad? If so, congratulations on taking the plunge and exploring the world!
Working abroad is an exciting opportunity to gain new experiences and increase your earning potential.
I bet your wondering if expats earn more than locals? Well in this blog we explore how salary & life may differ between locals & expats…
Do expats really earn more than locals?
Everyone’s opinion differs.
Expats’ earnings can vary depending on a number of factors. So it’s hard to say whether they earn more than locals. Generally, these factors include the country of origin, the country of destination, the industry, experience & qualifications.
It is possible for expats to earn more than locals if they have specialised skills. Or on the other hand, work in an industry that is in high demand.
High-skilled expats working in industries such as finance, technology or engineering in countries like the United States you can earn considerably more than local counterparts.
Language barriers, inexperience with local culture and customs, and the lack of a strong professional network can cause expats to earn less than locals in some cases.
Due to the relatively low salaries for English teachers in countries like China, South Korea, and Japan, expats may earn less than locals in other occupations.
The United Arab Emirates
Due to the high demand for skilled workers in industries such as finance, oil and gas, and healthcare, expats in the UAE often earn more than locals. Global Media Insight reports that the UAE has over 8.9 million expats.
A recent Nafis initiative in the UAE has led to the equalisation of salaries between Emiratis and foreigners in private companies. It was created in 2021 as part of a wider reform program in the UAE to assist Emirati nationals in gaining employment in the private sector. A total of 75,000 private-sector jobs are expected to be created by 2025 through the initiative.
In Portugal, the average wage stands at €760 per month, yet expats often take home €1,500 – 2,500 per month and much more.
An attractive part of moving to Portugal is the lower cost of living combined with being able to keep earning at a rate similar to that of one’s home country.
Additionally, Portuguese emigrants who opt to settle in Portugal are eligible to apply for a Non-Habitual Resident (NHR) status. To be eligible, an individual must have lived abroad for the past five years, update their tax address to the country, and meet all the other qualifications. With the NHR status, high-value professions are subject to a flat Personal Income Tax rate of 20%.
United States of America
The salaries of expats in the USA can differ from those of locals depending on the industry, occupation, location, and level of experience and qualifications of the individual.
The median annual wage for all occupations in the United States in 2021 was $58,260, but salaries can vary widely by industry and occupation. A software developer’s median annual wage is $110,140, while a food service worker’s median annual wage is $26,500.
A person’s salary can vary significantly based on their experience and qualifications as well as the industry and location where they work in the United States. Due to their specialised skills and experience, expats in high-paying industries like finance, technology, and healthcare may earn higher salaries than locals.
As a result of language barriers, limited American work experience, or a lack of familiarity with local job markets, expats may earn less than locals.
Salary is often a prime consideration when moving abroad, but there are other considerations to take into account. These include:
- Cost of living: the cost of living in a country can be significantly more expensive than it is in your home country, which might cut into an expat’s discretionary income and make it difficult for them to be competitive with local cost-of-living.
- Exchange rates: Exchange rates can have a significant impact on an expat’s spending power, particularly if they are paid in a foreign currency. Fluctuations in exchange rates can affect the amount of money an expat can buy with their salary.
- Taxes: Tax rates can vary widely from country to country and can impact an expat’s take-home pay and overall spending power.
- Healthcare: The cost and quality of healthcare can also impact an expat’s spending power. In some countries, expats may need to purchase private health insurance, which can be expensive.
- Housing: Housing costs can be a significant expense for expats. In some countries, the cost of housing can be high, particularly in major cities.
- Other expenses: Other expenses such as transportation, food, and entertainment can also impact an expat’s spending power. These expenses can vary widely from country to country.
The overall cost of living in a country should be considered when comparing expat salaries to spending power. As well as exchange rates, taxes, healthcare, and housing costs. Furthermore, expats need to consider the lifestyle they want to lead and the additional expenses they may have to incur.
Thinking of moving abroad?
If you’re looking to get a visa and experience life in the Mediterranean or the United Arab Emirates – look no further. Not only can we help you to get there, we can help you in opening your bank account, setting up your business or another branch and so much more.
To enable you to learn more about the different visa options available to you, please explore more about the countries we operate in.