New survey for compensation packages based on price of one beer

Published:  19 Sep at 6 PM
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A new approach to cost of living surveys, calculated on the price of a beer, gives more accurate results than traditional studies.

It goes without saying that surveys can be very useful for expats looking for new assignments or pensioners looking for an exotic retirement, but a new, simpler approach is likely to prove very popular as a reference. Similar to the Economist’s ‘Big Mac’ survey, which based the purchasing power of top currencies on the cost of a hamburger, Sovereign’s new survey kid on the block is basing itself on the amount of a top earner’s wage packet it takes to buy one beer.

The company decided a new, more relevant means of calculating what wage levels were needed after local taxes were paid in order to live a comfortable life. The best example quoted the price of a pint of beer in New York, where local income taxes are set at 50 per cent, meaning an expat would need to earn $20 to pay $10 for a beer. Compared with the Cayman Island cost of a beer at $15, the island’s tax-free status would mean only $15 would need to be earned, making the location less expensive in tax net terms.

It’s interesting to note that the new method of calculating comparative salaries and their locations has coincided with the furore in the Gulf States caused by new health service fees for expats in several of the world’s most remunerative locations. The Sovereign survey upset the ratings tables of most of their rivals, with the findings far different from those of the EIU index.

Low levels of income tax in, for example, Hong Kong and Singapore, pushed those locations lower down the listings as they were cheaper for expat living than Copenhagen, the new top of the list for pricey living. New York came in on second place, coming as no surprise to expat professionals attempting to fund a quality of life in the Big Apple, and other top cities for cost included Paris, Brisbane, Reykjavik and, of course, London.
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