[nyc2hk2006]

Hi,
I am being offered a position in our HK office. I am currently working in the NY office. Does anyone know the average percentage for the cost of living adjustment? I don't want to get low-balled.

Any help will be greatly appreciated!!

[esquire1113]

What's up NYC2HK2006,

I'm also moving from NYC to HK in July of this year. Here's what you should expect at a minimum for COLA.

Housing is quite expensive for HK and the amount you get for allowance often depends on the package you are offered. Most companies in NY have standard packages for relocation. If you are 2 people, a range of 3 to 6k us per month is good.

COLA Allowance, usually calculated with an index provided by some int'l relocation specialist firm. My calculation came out to be 25% increase from 25% of my base salary. This is only to compensate for purchasing american goods in HK.

In addition to COLA, you should ask for utilities allowance, which could net you 2-300/month. This will help defray some of the aircon costs in hK.

When will you find out more details about your relo?

[z754103]

Sorry, please could you explain what 25% increase from 25% of base salary mean?
Thanks!

[esquire1113]

Yeah, it's a bit confusing... but here goes the explanation.

COLA is only paid on the portion of your income that is spent on Goods & Services. ORC Corporation calculated that for a U.S. person, that amounts to 25% of their income.

Then ORC determined that the true cost of living adjustment for Goods & Services equals approximately 25% more in Hong Kong vs. U.S. Therefore, the company increases 25% of your base salary that is spent on Goods & Services by 25% for COLA adjustments.

Note: These calculations do not include housing, which is calculated using a separate index.

Hope this clarifies it for you.

[nyc2hk2006]

Thanks esquire1113! I hope to get all the details squared away by the end of next week since I'll have to start packing up my stuff here and find a place to dump then in Hong Kong. )
How about you? How long are you staying there for?
How is the housing calculated? So many questions, huh? hehehe.

[Katanga]

guys

It's all well and good using the COLA and the G&S portion as 25% but housing here is very steep if you want a comparable place so make sure you are getting a separate housing allowance.

cheers

[z754103]

did they also adjust for a tax differential at all?

[esquire1113]

Housing allowance calculated separately. I got a pretty good allowance for 2 people. So make sure to ask for this. The amount depends on your family size and rank within the corporation.

Also, I am tax equalized. Although this doesn't benefit me as much since HK taxes are actually lower than US taxes, I still save about 3-4 K per year after being equalized because my allowances are not taxed to me.

Note: If you earn less than 80k US per year, it's not beneficial to be tax equalized because you can get a foreign earn income credit from US and pay only HK taxes on that amount.

[esquire1113]

NYC2HK2006,

My assignment is for 2 years, starting in august. I am flying out there in June for a house hunting trip.

Good luck with your move. It should be very exciting.