# Salary Package and US Tax



## Amina987

Hi there,

I am a single mom working in investment management. I have a daughter who goes to elementary school, and currently earn about USD80k/yr(gross). A headhunter recently contacted me for a position in soverign fund in Abu Dhabi and the package includes: 

housing provided or 150-180k DHS/yr, school 54k DHS/yr, allowance 5000DHS/mo, medical, business class flights.

I wonder how much base do I need to live comfortably at least the same level as I live now. One important thing to consider is that Federal law requires US citizens and resident aliens to report any foreign income, although there may be partial exclusion.

Does anyone give me a kind advice?

Thank you in advance


----------



## kenwise

*Cost Thoughts*

My experience is in Dubai, not Abu Dhabi. US tax law excludes about your first $93,000 provided in your first year you do not spend more than 35 days in the US. (Lawyers, please check me on this.) After you have "resident status", you can be in the US more. Don't forget to check your home state tax situation as well. Remember that monies offered you for housing (or the value of housing provided) you must also report as dollar income; check rate with your accountant. Amounts the prospective employer is offering (especially at the upper end for rent) should cover a three-bedroom apt in several acceptable neighborhoods in Abu Dhabi. Other expenses -- food, eating out -- will be close to those of the US (depending where you live in the US); many services (domestic help) will be cheaper.


----------



## Jynxgirl

It depends where you live, what would be needed to level you out. If you are in Atlanta, making 80k is quite different then being in NYC making 80k. If I were you, I would ask for 350k and see what they say. And then come to 320k as the goal. The company is probly aware that you will be paying taxes on anything that you are receiving in benefits over 93k$, but you might pull that out of your back pocket as a negotiating factor.


----------



## Amina987

Thank you very much for your precious advice! Glad to hear that first $93K is tax-free.

>If you are in Atlanta, making 80k is quite different then being in NYC making 80k.

I am in NYC, so things are not easy with this income. I just submit my resume to the headhunter in hopes that I will be able to pay up mortgage faster and save more for my daughter's college.

Thanks again both for your insight.


----------



## Jamidon

Amina, I too have a similar career plan and currently work/ live in NYC. Would you mind sharing how you get hold of head hunters and or where have you been applying for jobs. Thanks in advance


----------



## Amina987

*Linked In*



Jamidon said:


> Amina, I too have a similar career plan and currently work/ live in NYC. Would you mind sharing how you get hold of head hunters and or where have you been applying for jobs. Thanks in advance


I constantly update my profile on LinkedIn, so head hunters call me from time to time. Actually, I never had thought of UAE until two weeks ago when a head hunter from Europe reached me and explained about the package. I had an interview in NYC before they sent my CV to UAE last week. That is a niche head hunter which I have not heard of. Posting your experience on LinkedIn will help since head hunters call you only when their clients' needs match your profile = higher possibility of interviews. Good luck in your search - and wish me a luck


----------



## Jamidon

Thanks Amina - this is helpful. Re expat packages. I have seen employers (is US) grossing up wages to cover foreign tax liabilities......another negotiating tool you could use during your conversations. Just do some hypothetical tax calcs using any online tax software ( remember to calculate this for NY State and City ). Recently NY state has gone very aggressive with foreign income / split state cases- the state is broke and they are coming after people in every possible way. 

Also, for the sake of networking and if you don't mind I would love to add you to my linked in ( Asim Razzaque - Time Warner Inc ). I managed Time Warner's global equity plans here at Columbus circle (Corporate HQ ). again good luck to you!!


----------



## Jamidon

Hi, how did your salary negotiation go ?


----------



## mcnichols30030

Amina, 

You should look at IRS Publication 54 'Tax Guide for US Citizens and Resident Aliens Abroad'. There are two related exclusions - one for housing, the other for income (and a limit on the total that can be excluded). 

The supply of apartments in Abu Dhabi is increasing and it appears that the rents are decreasing somewhat as a result. But housing will be a significant expense. You will find the housing deduction limit for Abu Dhabi in the instructions for IRS Form 2555, also worth looking into. 

If your employer will put you up in a hotel for a month, there is a fair amount of documentation to deal with initially (visa, Emirates ID, setting up a bank account, mobile phone). You will also need time to look at housing options. 

Good luck, hope it works out for you.

Mike


----------



## terdubai

I believe you have to be paid locally, in UAE, to get the $93K exclusion. We are paid thought the company in the US so we do not get the exclusion.


----------



## Jynxgirl

Not true. My company also pays in the usa. How they do that... beyond me, as it is illegal to do so is my understanding on the uae side. Anyhow, you can get the exclusion terdubai. Easy to do it yourself if you do your own taxes, but any accountant can add in the extra paperwork at a minimal cost if you dont want to bother.


----------



## terdubai

Thanks! It seems like there is a lot of conflicting info. Will contact accountant.


----------



## Pillsbur24

*Similar situation*

I'm in a similar situation and has an offer. The offer (base salary + housing) is less than 20% increase from my US salary, but bonus potential is much higher. I'm struggling with whether I should relocate to UAE given the small increase but higher bonus potential.

Does anyone have any good advice?


----------



## Jamidon

What specifically have been offered ? just remember 100k is pretty much tax free but you will be taxied anything over that amount. And it includes housing benefits.


----------



## Pillsbur24

*My offer*

773,000 AED/year total salary including 317,200 AED/year cash allowances (i.e. housing). This is less than a 20% increase than my US total salary.
Bonus potential is much higher though at maximum 166% first year. Bear in mind that obviously is not guaranteed and very challenging to achieve.
Rest is standard with annual tickets home for the family, full medical, and school tuition.

I was also thinking about the US taxes. I think this would be a good offer for British of Canadian, but much less attractive for US citizen due to taxes.




Jamidon said:


> What specifically have been offered ? just remember 100k is pretty much tax free but you will be taxied anything over that amount. And it includes housing benefits.


----------



## Jamidon

It's a reasonable offer given you can have some assurance on bonus front . I would want to know payouts of last threes of your comparable position. But yes you will have tax liabilities here in US. Good luck


----------



## CaliforniaMan

terdubai said:


> I believe you have to be paid locally, in UAE, to get the $93K exclusion. We are paid thought the company in the US so we do not get the exclusion.


Hi, I just called the IRS International Customer Service Office in Philadelphia at +1-267-941-1000. They also have a dedicated webpage.

I believe what you said is not valid. The IRS agent said that the Foreign Earned Income Exclusion rules are the same regardless of whether you get paid in USD deposited into your US Bank account or in AED in Dubai.

Please call them yourself to verify. Its best to get information directly from the real source before posting it online and confusing others. Good luck.


----------



## babutan

Yeah, got an offer as well. Low basic salary but plus allowance is OK, not great. Tough to take advantage of the foreign exclusion tax in the first year since you cannot be in the US for more than 35 days or so.


----------



## Bounty Hunter

mcnichols30030 said:


> Amina,
> 
> You should look at IRS Publication 54 'Tax Guide for US Citizens and Resident Aliens Abroad'. There are two related exclusions - one for housing, the other for income (and a limit on the total that can be excluded).
> 
> The supply of apartments in Abu Dhabi is increasing and it appears that the rents are decreasing somewhat as a result. But housing will be a significant expense. You will find the housing deduction limit for Abu Dhabi in the instructions for IRS Form 2555, also worth looking into.
> 
> If your employer will put you up in a hotel for a month, there is a fair amount of documentation to deal with initially (visa, Emirates ID, setting up a bank account, mobile phone). You will also need time to look at housing options.
> 
> Good luck, hope it works out for you.
> 
> Mike[/QUOT
> 
> Mike, you seem to know a lot about this tax business. Lets get together because I am nw to ALL of this!
> 
> Tony


----------

