# Expat versus Local Package



## ashwalla (Aug 1, 2017)

Hi All,

I am senior employee (director level) in England with a large, global company, and I expect to be moving (with my current employer) to Dubai in Jan 2018, at the same grade. 

I am in the process of discussing terms with my employer. HR have given me figures for two packages - 1) expat and 2) local.

The expat package is roughly 200,000 GBP per year (approx the same as what I earn now but this will be all tax free, so worth a lot more). The 'local' package however is 50% HIGHER (approx 300,000 GBP per year).

The local package is substantially higher, so it seems obvious that I should go for that.

I would love to know if there is a downside with the local package.

Both packages are all in (i.e. both include, salary, bonuses, housing, etc.

Thanks in advance.


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## The Rascal (Aug 6, 2014)

The expat will be a contract - ie 2, 3, 5 years or whatever, if it's cancelled they pay you the contract off.

If it's a local contract then they can sack you with a few month's notice and that's it. However you will have a greater End of Service.

Risk and reward my friend.


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## ashwalla (Aug 1, 2017)

The Rascal said:


> The expat will be a contract - ie 2, 3, 5 years or whatever, if it's cancelled they pay you the contract off.
> 
> If it's a local contract then they can sack you with a few month's notice and that's it. However you will have a greater End of Service.
> 
> Risk and reward my friend.


Thanks for that. I have over 20 years of service so if I was laid off while in England, I would get about 90 weeks of pay. I shall have to make sure that this is covered in the new 'local' contract. 

I am puzzled why my employer would offer me the local package when it will cost them £100k more every year!


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## The Rascal (Aug 6, 2014)

ashwalla said:


> I am puzzled why my employer would offer me the local package when it will cost them £100k more every year!


Cos their risk is less, forget the 90 weeks, you'll get 3 months maximum.

Also, you need to ensure that your previous employment is taken into account, ie, a local contract means you start from scratch, an expat contract (in this case, I would expect), means that your previous employment is taken into account.

If that is the case you may want to go for the expat contract, as the end of service will be massive in comparison.

Jam today or jam tomorrow.


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## twowheelsgood (Feb 21, 2013)

ashwalla said:


> I shall have to make sure that this is covered in the new 'local' contract.


Not a cat in he**s chance - there is no 'redundancy' payment in the UAE - there's just 'Gratuity' which is in lieu of a pension. You get a notice period and thats it - you leave, gratuity in hand.



ashwalla said:


> I am puzzled why my employer would offer me the local package when it will cost them £100k more every year!


Because its less hassle for them, and the door shuts behind you and your previous level of role no longer has to be held over for your return in a couple of years time. You are effectively joining a different company with completely different terms, no severance, no pension , no tax and the safety cushion which seems nice when you're on it in Europe is gone.

You now know how much your employment 'rights' at home cost you 

the only thing I disagree with from rsinner is that if you are on an ex-pat contract and its terminated early, you'll never gat it paid out - you'll just get to return to a job at home. I've never heard of anyone from a big UK company getting a payout on an early return.


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## The Rascal (Aug 6, 2014)

twowheelsgood said:


> the only thing I disagree with from rsinner is that if you are on an ex-pat contract and its terminated early, you'll never gat it paid out - you'll just get to return to a job at home. I've never heard of anyone from a big UK company getting a payout on an early return.


I morphed LOL

What i meant was if it's a fixed term then by UK law it must be paid out (or you're on gardening leave) but in that time if the OP gets another job then the original company don't have to pay it anymore.

it's all in the wording as you know.


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## twowheelsgood (Feb 21, 2013)

The Rascal said:


> What i meant was if it's a fixed term then by UK law it must be paid out (or you're on gardening leave).


More years than I care to remember but I've never come across anyone who got that. You'd get severance pay sure, and gardening leave during any notice period but paying out years of salary of unused contract duration - nope.

Maybe 20 years ago in the halcyon days of ex-pat life but not any time recently.


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## UKMS (Jan 9, 2017)

ashwalla said:


> Hi All,
> 
> I am senior employee (director level) in England with a large, global company, and I expect to be moving (with my current employer) to Dubai in Jan 2018, at the same grade.
> 
> ...


In many ways I was in a similar scenario earlier this year when we moved over from the UK. I didnt pursue an expat package but moved within my company on a local open ended contract (global tech company) in the same role on the same pay point but on the UAE salary scale etc etc so I can pretty much compare apples to apples in my world. Comparing my UK package pre tax to UAE there was around about an 85% uplift (including minimum bonuses in each location) this doesn't take into account that any stock I get allocated is also now tax free. That 85% base uplift gives me a 'take home' uplift of about 125% (after I've paid my rent). That said there are some things i got as benefits in the UK that I dont get here but make minimal difference. 

So although the 100k jump may seem a lot I dont think it is. Personally I wouldnt have moved here for the same as I earned in the UK even though it is tax free. If you already earn 200k in the UK, then you take 200k here including allowances by the time you remove housing (and education ? ) that starts to eat into your tax saving unless you get housing in the UK ?


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## ashwalla (Aug 1, 2017)

UKMS said:


> In many ways I was in a similar scenario earlier this year when we moved over from the UK. I didnt pursue an expat package but moved within my company on a local open ended contract (global tech company) in the same role on the same pay point but on the UAE salary scale etc etc so I can pretty much compare apples to apples in my world. Comparing my UK package pre tax to UAE there was around about an 85% uplift (including minimum bonuses in each location) this doesn't take into account that any stock I get allocated is also now tax free. That 85% base uplift gives me a 'take home' uplift of about 125% (after I've paid my rent). That said there are some things i got as benefits in the UK that I dont get here but make minimal difference.
> 
> So although the 100k jump may seem a lot I dont think it is. Personally I wouldnt have moved here for the same as I earned in the UK even though it is tax free. If you already earn 200k in the UK, then you take 200k here including allowances by the time you remove housing (and education ? ) that starts to eat into your tax saving unless you get housing in the UK ?


Thanks for the reply.

I am little confused. At the moment, my £200k in the UK leaves with a net amount of abut £110K (tax, NI and pension contributions).

With the 'local package' of £300k, I will have no tax to pay, so even if I paid £50k rent (we have no kids that are school age) and, say, £30k into a pension, then I will have £220k. That is exactly double what I am left with here. We will also get some renal income from our current home. I understand that the cost of living in Dubai is very similar to London, so we (in theory) be saving £110k a year.


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## ashwalla (Aug 1, 2017)

twowheelsgood said:


> Not a cat in he**s chance - there is no 'redundancy' payment in the UAE - there's just 'Gratuity' which is in lieu of a pension. You get a notice period and thats it - you leave, gratuity in hand.
> 
> 
> 
> ...


I am glad I posted on this forum, and I very grateful to people responding.

I have been told by HR that if I transfer (local or ex-pat package), they will NOT guarantee a job back home if I decide to come back. So, in that regard, both contracts are the same.

The main thing that is worrying me now is the severance package (redundancy) and pension contributions. My company could easily be acquired and I could be given marching orders. If I stayed here, then I would get 90 weeks of pay (taxable, except for the first £30k), but if it happened in Dubai then I shall get very little. I presume I shall also have to pay rent for the remaining portion of the (yearly) contract?

Cheers


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## UKMS (Jan 9, 2017)

Couple of things ... 

Cost of living here is considerably higher than London if you compare in £'s but if you take your cost of living as a % of income compared to home it's probably same or lower (I know not everyone can make that comparison but doing the same job for the same company you can) 

Regarding rent if you were made redundant. It might depend on your company, I get my annual housing allowance paid up front for the year, some just take it monthly but either way in the event of redundancy my company will pay for the remainder of the tenancy contract but claw it back if you are reemployed locally before the contract end. You will have probably noted in your research that rent here is paid up front to a landlord in a negotiated amount of cheques. 

You mentioned you were concerned about pension contributions, what is your concern ?

I guess the loss of the severance package if you move is a risk that only you can weigh up knowing your company


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