Living Abroad - Cost-of-Living Calculator?

[OneFinger]

I know is this way off topic. But there's a wealth of knowledge out there and I'd appreciate some help.

 

I'm currently considering a job change that would take me to another country in an expat status (which I understand exempts me from paying federal taxes).

 

There are several good websites that offer salary and cost-of-living comparisons between locations. However, I've only found sites that compare within the United States. For example:

 

http://www.bestplaces.net/col/

 

http://cgi.money.cnn.com/tools/costofliving/costofliving.html

 

http://www.homefair.com/find_a_place/calculators/salarycalc/index.asp?cc=1

 

Does anyone know a good website where I can enter my current salary and location and compare it to international locations? Does anyone have experience working as an expat and how taxes are handled?

 

Any help appreciated.

[trilingual]

Don't have a site for you, but as far as taxes are concerned you can exclude up to about US$80,000 in foreign-earned income from being taxable after you have been abroad for a year. Any income over the limit is taxable. Foreign-earned income includes income paid by a U.S. company for work you do abroad. Be aware that you may be liable to income tax in the foreign country, so inform yourself about the tax laws there -- in some cases the tax rates may be higher than in the U.S. If you do owe tax in the foreign country AND owe tax in the U.S., too, you can probably get a credit on your U.S. tax for the tax you paid in the foreign country. (And vice-versa.) All of this depends on whether the country in question accepts the policy of no double taxation and/or has a tax treaty with the U.S. -- the treaties are on the IRS website. You need to get some tax advice before you accept this position to avoid finding yourself paying more in taxes than if you'd stayed home!

[trilingual]

Don't have a site for you, but as far as taxes are concerned you can exclude up to about US$80,000 in foreign-earned income from being taxable after you have been abroad for a year. Any income over the limit is taxable. Foreign-earned income includes income paid by a U.S. company for work you do abroad. Be aware that you may be liable to income tax in the foreign country, so inform yourself about the tax laws there -- in some cases the tax rates may be higher than in the U.S. If you do owe tax in the foreign country AND owe tax in the U.S., too, you can probably get a credit on your U.S. tax for the tax you paid in the foreign country. (And vice-versa.) All of this depends on whether the country in question accepts the policy of no double taxation and/or has a tax treaty with the U.S. -- the treaties are on the IRS website. You need to get some tax advice before you accept this position to avoid finding yourself paying more in taxes than if you'd stayed home!

[EXPAT]

I wanted to also add to your comments about taxes. You are not exempt from federal taxes but you should be "equalized". Make sure you fully understand your companies policy on what expat status means. In most companies they will neutralize you so that you pay no more and no less tax than you would have in your last US location. That is what happened to me during my 7 years overseas. In general depending on company policy you can really make out on an expat deal and it is definitely worth it. But you need to fully understand your companies approach in handling expat status.

[EXPAT]

I wanted to also add to your comments about taxes. You are not exempt from federal taxes but you should be "equalized". Make sure you fully understand your companies policy on what expat status means. In most companies they will neutralize you so that you pay no more and no less tax than you would have in your last US location. That is what happened to me during my 7 years overseas. In general depending on company policy you can really make out on an expat deal and it is definitely worth it. But you need to fully understand your companies approach in handling expat status.

[Guest Merlin]

Most newspapers carry a daily currency comparison showing how many units of foreign money the dollar will buy, and vice versa. When the dollar is relatively low compared with what it sometimes has been, it takes more dollars to buy things in the foreign country. If you are paid in the foreign currency, you will not be able to convert to as many US dollars as at other times. This is something to consider, but it is not a sure guide to relative costs of living. Third world countires will still, as a general rule have much lower costs of living, but the industrialized countries will probably have higher.

[Luv2play]

When the dollar is relatively low compared with what it

>sometimes has been, it takes more dollars to buy things in the

>foreign country. If you are paid in the foreign currency, you

>will not be able to convert to as many US dollars as at other

>times.

 

While the first sentence quoted above is correct, the second is incorrect. If you are paid in the foreign currency and the USdollar is low, you will be able to convert to MORE USdollars per unit of foreign currency earned. With the USdollar collapsing against many major currencies, this is indeed the time for Americans to consider working abroad in a foreign currency.

 

However, we all know these things never last so currencies could reverse course sometime in the near future or perhaps not. As long as the Bush administration is running up huge deficits, the USdollar is likely to continue to decline. In Canada, our dollar is approaching par with the USdollar, something we haven't seen in over 30 years.

[OneFinger]

Thanks to you and EXPAT for the tax suggestions. I do plan on running things past my accountant. But, I had no idea about the "equalized" aspect to the tax situation. That's really something I need to make sure is clearly defined and explained.

 

I've also found a website set up by other expat's in that country which lists common products/services and their current cost. For example, a one bedroom apartment rents for approximately $2100/month (about 3 times higher than where I live now and twice as much as my mortgage for a 5-bedroom house). A bottle of catsup or salad dressing is $2.50 (also slightly higher). But electronic products seem significantly lower.

 

Still looking for a easy comparison tool but not sure that one exists for international cities.

 

Thanks again for the input.

[Guest showme43]

you might try getting a newspaper (or on line addition) and check ads and classifieds for some general ideas

[Luv2play]

Housing and the cost of operating a car are two areas where you may find the costs are significantly higher overseas than in the USA or Canada. The major cities of Europe are all extremely pricey by US standards unless you live in Manhattan. Places like London and Zurich can exceed even Manhattan's prices.

 

You will find that you are competing for housing with people from the middle east and Latin America who are far richer than most Americans if you are looking for housing in Europe's most desirable cities. Now even the Chinese and Russians have millionaires who are spending big bucks abroad.

 

Many companies offer housing allowances to equalize the differentials. When I worked abroad I paid a monthly rental on an apartment that was based on the rates I would have paid in my home town, which was substantially below the market rate in that country.

 

Also be prepared to be shocked at the price of gasoline in Europe. It is 3 or 4 times the price in the US.

[+ Charlie]

Although housing in the center of a city is expensive, it is worth it to avoid the problem of transportation. Owning and maintaining a car is often much more expensive in other countries than in the US, not to mention the problem of licensing, especially if you are not fluent in the local language.

 

Wherever you go, be prepared for things to work differently than you are used to.

[+ Gar1eth]

>you might try getting a newspaper (or on line addition) and

>check ads and classifieds for some general ideas

 

 

I don't have personal experience--but I had some cousins who were in England for 2 years--and some friends who are in Japan for 3 years currently.

 

From what I understand--both of them are doing quite well. Of course it would depend on the the company you work for.

 

At least one of the families I know were renting out their house while they were gone. In addition they received a housing allowance from their company. I think especially-- for the couple in Japan--since the cost of living is much higher there-they adjusted his salary upward to recompense for the different cost of living. The companies flew the families home twice a year. And each family has children--the companies gave some type of educational allowance to allow for the children to go to American type private schools.

 

So I believe both families were/are actually making quite a bit of money off the deal.

 

Gman

[edjames]

Your post does not tell us whether or not you will be working independently or for a multinational company?

 

If you are working for a company, they should provide serivces to you to help you relocate and give you all the necessary information. Generally they've done this before and have staff available to transition you to a new international location. Assistance with housing, moving, subletting your house or apartment, legal advice, visas, taxes, are usually included as part of your employment package.

 

Many multinationals offer housing allowances and differentials to accomodate employees in overseas locations with the cost-of-living and exchange rate differences. They also provide help filing your US taxes, and most importantly help with your work visas and any political situations you may find yourself in.

 

If your working independently, you're screwed! Just kidding. There are a lot of international laws and regulations you need to be aware of, so I wonder if your first step shouldn't be to consult a lawyer to discuss your situation and get some legal advice. Second, seek out others in a similar situation who can share their experiences.

 

Good luck!

 

ED

[OneFinger]

ED,

 

Thanks for your response. Yes, I am considering a multi-national company. Prior to preliminary talks they asked for a detailed salary/benefit history. Then, after initial talks, they asked me to tell them my salary requirements.

 

Several current co-workers have relatives working there and they are provided with company-paid housing, a driver, and private school allowance for the kids. But, these people are also in executive management positions which are several pay grades above the job I'm considering. Don't really know and they didn't say (yet) what type of non-typical benefits are offered (although they did provide detailed info on health care, 401K, pension, etc).

 

Like I said in my original post, it's easy for me to compare U.S cities to ensure I can maintain my current lifestyle. But, I'm finding it difficult to make the comparison for the UAE.

 

Don't know yet if my response to them took me out of the running. We'll have to see about that one.

 

Currently have appointments with my accountant to do preliminary discussions on tax implications. Have also joined a couple of discussion boards for expats working in that area. I'm getting the impression that for some it's a great deal. But, others sound like they got screwed.

 

This is the kind of career move I want to carefully consider before making a commitment.

 

;-)

[Guest zipperzone]

>Thanks for your response. Yes, I am considering a

>multi-national company. Prior to preliminary talks they asked

>for a detailed salary/benefit history. Then, after initial

>talks, they asked me to tell them my salary requirements.

 

I would take exception to these two questions. Why would you want to give them a detailed salary/benefit history? And more importantly, why would you tell them your salary requirements?

 

Such questions are unfair to the applicant. For example, you might say your salary requirement is $150k. They might have been willing to pay you $180, but by knowing you are looking for 150 - they've just saved 30 grand per year.

 

A lot of companies operate this way but my feeling is that they should tell you what the salary would be for a person with your qualifications and you then respond.

[edjames]

I wish you well with the job application. I'm surprised that the HR rep or the manager who interviewed you didn't provide more info about ex-pat differential and all the benefits the company provides to its overseas employees. This is a wonderful and exciting opportunity. It will involve some self sacrifice on your part but there are many advantages to consider.

 

One small bit of advice. Start a question/answer list. List all the questions you, and your accountant/lawyer, may have about relocating to the UAE, which by the way, will be a very challenging experience for you. Although Arab countries are very uber-modern, they are still fundamentally Islamic and you will have to adjust to their customs and laws. Don't expect to find any friendly gay bars over there! Alcohol is a non-no but most hotels do provide it. Expect to need and want weekend trips outside the country for recreational purposes. Be very, very cautious about gay sex in an Islamic country. It could be punishable by death, or expulsion from the country which will reek havoc with your travel status, not to mention what list you'll wind up on in Homeland Security! Also, let’s not forget they still believe in beheading! Maybe I'm being a little too cautious but these are considerations. There is also the consideration that being an American in an Arab country makes you a target for terrorists.

 

You're right, if you were married with children, you'd have nannies and all sorts of perks. As a single individual, you should be able to get really inexpensive domestic help. The UAE is a magnet for immigration from less developed countries and you should be able to get help for just dollars a week.

 

I worked for 33 years for a multi-national and they treated ex-pats very, very well. People were falling over themselves to get relocated to a foreign location. My good friend did it many times. She's lived in London, Paris, Sao Paulo, and Sydney and in between traveled the globe for our company. There are very few places on the face of this earth she hasn't been in as a result of her business travel.

 

I look forward to hearing the end-result of this thread! I wish you all the best and good luck!

 

ED