Expats are usually highly skilled, highly paid, experienced professionals who intend returning to their home country when an assignment has been completed. Their pay therefore needs to make it worth their while to stay and face the unfamiliarity and possible hardships of being in a foreign environment, away from their home country.

 

Determining expatriate pay levels, and international salary levels in different countries, necessitates complex calculations that involve comparing the relative cost of living in both the host country and the expat’s home country.

The challenge for an employer is to offer them a quality of lifestyle, safety and security that is similar to, or better than, that of their home country.

21st Century Expat’s online calculators can help you manage short and long term expat assignments quickly, easily, accurately and affordably, whilst taking all these complexities into account

21st Century Expat is charged in Rands and costs a fraction of the price of international suppliers.

21st Century Expat supplies you all with all the combinations you need in 780 global locations.

780 Global locations
Each location has Cost of Living Index (COLI) and Hardship Index (quality of life)
information for 13 different Cost of Living baskets.

the 13 different basket groups

We use more than 50 types of raw data sources including local service providers in each location, international service providers, official governmental statistics and global agencies. Data is thoroughly quality assured, updated quarterly and manually checked by our analysts.

 

publically available data sources
Applying calculations to expat salaries is quick, accurate and online.

Receive your reports online within minutes – simply register and buy locations via your consultant, run the premium content calculators, and receive your reports instantly.

Reports can be re-run for the time period purchased and for each location purchased.

21st Century Expat is available in report form, for companies who require information for only a few expats (we collect your information regarding your unique expatriate details, and provide you with a detailed report)
OR
subscription to the system, for companies who require information for many expats (with the option of either a yearly subscription or a 7-day subscription).

contact us for more info

The COLA calculator calculates how much additional allowance (over and above your current salary) you need to earn in another location to compensate for cost of living, hardship, and exchange rate differences, in order to have the same relative spending power – and as a result, have a similar standard of living as you have in your current location.

The cost of living difference is the cost difference between the same basket of goods and services in order to maintain the same standard of living when relocating to a different location. When you relocate, the cost of everything you spend your salary on will either cost more or less. Some of the costs may be higher in the new location and some of the costs may be lower.

The difference in the aggregate cost of all the items in selected basket groups are examined in each location (this is done by using the average reported price in each location for the same quantity of each item).

A Cost of Living Allowance (COLA) is a salary supplement paid to employees to cover differences in the cost of living, particularly as a result of an international assignment. If the cost of living difference is 30% then in order to have the same purchasing power the COLA would be the amount paid to compensate for the 30% higher cost of living.

 

The formula for calculating the cost of living allowance is as follows:
(Net Spendable Salary x Cost of Living Index x Hardship Index x Exchange Rate) less (Net Spendable Salary x Exchange Rate) = Net COLA

The baskets are based on information – collected in each location – for approximately 200 different goods and services. Prices for the same quantity of each item are collected. The data is thoroughly quality assured and manually checked and moderated by experienced analysts.

For ease of use, the 200 goods and services have been grouped into 13 basket groups. To compare the cost of living, we use the total cost of the basket in each location. The basket groups that have been included in calculating the cost of living difference, are those that will be paid by the employee from their salary*. The difference in the cost of the basket at the ruling exchange rate is the basis of the cost of living difference.

  • The basket groups that have been excluded are those that will be provided by either the employing company, or in some cases, by the state in the new location.

The 13 different basket groups are weighted according to Expatriate expenditure norms.

These are as follows:

Alcohol and Tobacco Basket (Weight=2%)
*Cigarettes (International Brand Pack of 20)
*Cigarettes (International Brand Pack of 30)
*International Beer from a shop (330ml)
*International Beer from a Shop (500ml)
*Locally Produced Spirit at Bar (1 Glass Double Tot)
*Locally Produced Spirit a shop (1 Bottle)
*Whiskey at Bar (1 Glass Double Tot)
*Whiskey from a shop (1 Bottle)
*Wine (mid-range) at Bar (1 Glass)
*Wine (mid range) from a shop (1 Bottle)

 

Clothing Basket (Weight=2.4%)
*Business Suit (1 men’s suit)
*Business Suit (1 women’s suit)
*Business Jacket or Blazer (1 men’s)
*Business Jacket (1 women’s)
*Casual Long Sleeve Shirt (1 men’s)
*Casual Jeans (1 men’s)
*Casual Blouse (1 women’s)
*Casual Summer Dress (1 women’s)
*Children’s Jeans (1 pair aged 10-12)
*Children’s Skirt (1 pair aged 10-12)
*Children’s Boys Shoes (1 pair)
*Children’s Girls Shoes (1 pair)
*Coat (1 men’s outdoor)
*Coat (1 women’s outdoor)
*Evening Wear (1 men’s suit)
*Evening Wear (1 women’s suit)
*Hat (1 men’s outdoor)
*Hat (1 women’s outdoor)
*Shoes (international brand of running shoes)
*Shoes (office leather shoes)
*Underwear (1 men’s boxer shorts)
*Underwear (1 women’s Brassiere)

 

Communication Basket (Weight=2%)
*Monthly Phone Rental Charge (1 Domestic Landline)
*Internet Subscription Fixed Line (1 Month Standard Plan)
*Mobile Tariff (1 Minute Standard Rate)
*Mobile Data Rate (1 Meg Standard Rate)

 

Education Basket (Weight=5%)
*Annual Creche/Pre-School Fees (International; Private; Excluding Extras)
*Annual Primary School Fees (International; Private; Excluding Extras)
*Annual High School Fees (International; Private; Excluding Extras)
*Annual First Year Tertiary/University Fees (International; Private; Excluding Extras)

 

Furniture and Appliances Basket (Weight=5%)
*Dining Table and 6 Chairs (Executive)
*Home Entertainment Blu-ray Player (Sony BDP-S270 Blu-ray Player or Equivalent)
*Home Entertainment Television (46′ LED HD TV)
*Kitchen Appliances Fridge Freezer (Large Double Door)
*Kitchen Appliances Iron (1 Clothing Hand Steamer Iron)
*Kitchen Appliances Light Bulb (Energy Saver e.g. 11w=60w)
*Kitchen Appliances Microwave (Medium Sized)
*Kitchen Appliances Toaster (2 Slice Toaster)
*Kitchen Appliances Vacuum Cleaner (Household Carpet Vacuum Cleaner)
*Kitchen Appliances Washing Machine (Automatic Washing Machine)
*Kitchen Appliances Kettle (Standard Electric Kettle)
*Sofa / Lounge Suite (6 Seater; Leather)

 

Groceries Basket (Weight=16.5%)
*Baby Consumables (Powdered Milk Formula)
*Baby Consumables (Pured Baby Food)
*Baked Goods (Packet Plain Biscuits)
*Baked Goods (500g Loaf of Brown Bread)
*Baked Goods (500g Loaf of White Bread)
*Baking (1kg Cake Flour)
*Baking (12 Large Eggs)
*Baking (1kg Sugar)
*Canned Foods (1 Tin Baked Beans)
*Canned Foods (1 Tin Fruit Salad)
*Canned Foods (1 Tin Meat Balls)
*Canned Foods (1 Tin Soup)
*Canned Foods (1 Tin Tuna)
*Cleaning Products (1 kg Automatic Clothes Washing Powder)
*Cleaning Products (1 Litre Dish-Washing Liquid)
*Cleaning Products (1 Litre Window Cleaning Liquid)
*Dairy (1kg Breakfast Cereal)
*Dairy (250g Butter)
*Dairy (1 kg Standard Cheese e.g. Cheddar)
*Dairy (1 Dozen Large Eggs)
*Dairy (1 Litre Full Cream Milk)
*Fresh Fruits (1 kg Bananas)
*Fresh Fruits (1kg Green Apples)
*Fresh Fruits (1 kg Oranges)
*Fresh Vegetables (1 Head Lettuce)
*Fresh Vegetables (1kg Potatoes/Rice/Pasta)
*Fresh Vegetables (1kg Tomatoes)
*Fruit Juices (1 Litre Apple Juice)
*Fruit Juices (1 Litre Orange Juice)
*Frozen (1kg Mixed Vegetables)
*Frozen (1kg Peas)
*Meat (1kg Beef Steak)
*Meat (1kg Leg Lamb)
*Meat (1kg Minced Beef)
*Meat (1kg Boneless, Skinless, Chicken Breast)
*Meat (1kg Whole Chicken)
*Oil & Vinegars (1 Litre Cooking Oil)
*Oil & Vinegars (1 Litre Olive Oil)
*Pet Food (2kg Dry Cat Food)
*Pet Food (5kg Dry Dog Food)
*Pre-Prepared Meals (1 Frozen Meal e.g. Lasagne)
*Sauces (500ml Jam/Marmalade)
*Sauces (500ml Tomato Ketchup)
*Sauces (500ml Soy Sauce)
*Seafood (1kg Calamari)
*Seafood (1kg Fresh Fish)
*Seafood (1kg Frozen Fish)
*Snacks (100g Bar Chocolate)
*Snacks (250g Salted Peanuts)
*Soft Drinks/Non-Alc Bev (1 Can Coke)
*Soft Drinks/Non-Alc Bev (1 Litre Carbonated/Fizzy Cola)
*Soft Drinks/Non-Alc Bev (1 Litre Carbonated/Fizzy Soft Drink)
*Soft Drinks/Non-Alc Bev (1.5 Litre Natural Mineral Water)
*Soft Drinks/Non-Alc Bev (250g Tea Bags)
*Soft Drinks/Non-Alc Bev (500g Instant Coffee)
*Soft Drinks/Non-Alc Bev (500g Ground Coffee)
*Spices & Herbs (250g Pepper)
*Spices & Herbs (250g Salt)

 

Healthcare Basket (Weight=5%)
*Private Practice Doctor Visit for Uninsured Patient
*Private Hospital stay per day including nursing care, medications, diagnostic tests, food, and related costs
*Non-Prescription Medicine (1 Bottle Cough Mixture)
*Non-Prescription Medicine (1 Box Plasters)
*Non-Prescription Medicine (30 Multivitamins)
*Non-Prescription Medicine (1 Tube Anti-Inflammatory)
*Non-Prescription Medicine (1 Tube Anti-Septic Ointment)
*Private Medical Insurance/Medical Aid (Contribution Member+1)

 

Household Accommodation Basket (Weight=30%)
*Apartment Purchase (Per M2 Central Location)
*Apartment Purchase (Per M2 Central Suburban)
*Mortgage (Annual Interest Rate)
*Rental Secure Upmarket Unfurnished Apartment Excluding Utilities (1 Bedroom Central Location)
*Rental Secure Upmarket Unfurnished Apartment Excluding Utilities (1 Bedroom Suburban Location)
*Rental Secure Upmarket Unfurnished Apartment Excluding Utilities (3 Bedroom Central Location)
*Rental Secure Upmarket Unfurnished Apartment Excluding Utilities (3 Bedroom Suburban Location)
*Rental Secure Upmarket Unfurnished House/Villa Excluding Utilities (4 Bedroom Central Location)
*Rental Secure Upmarket Unfurnished House/Villa Excluding Utilities (4 Bedroom Suburban Location)
*Utilities (Power, Water, Garbage & Local Tax for 1 Bedroom Apartment)

 

Miscellaneous Basket (Weight=3%)
*Domestic Help (1 Hour Part Time Salary)
*Domestic Help (1 Months Full Time Salary)
*Dry Cleaning (1 Men’s 2 Piece Suit)
*Dry Cleaning (1 Men’s Leather Jacket)
*Dry Cleaning (1 Woman’s Sued Jacket)
*Dry Cleaning (1 Women’s Suit)
*Linen (1 Duve for Single Bed)
*Linen (1 Large Bath Towel)
*Linen (1 Sheet for Single Bed)
*Newspapers and Magazines (1 International Daily Newspaper)
*Newspapers and Magazines (1 International Magazine)
*Newspapers and Magazines (1 Local Daily Newspaper)
*Newspapers and Magazines (1 Local Magazine)
*Office Supplies (1 Black Inkjet Printer Cartridge)
*Office Supplies (1 Colour Inkjet Printer Cartridge)
*Office Supplies (1 Pack of 500 sheets of fine printer paper)
*Postage Stamps (1 International Airmail Stamp – Short-haul)
*Postage Stamps (1 Local Domestic Stamp)

 

Personal Care Basket (Weight=3%)
*Cosmetics (1 Blush Compact)
*Cosmetics (1 Lipstick)
*Haircare (1 Men’s Cut and Blow Dry)
*Haircare (1 Women’s Cut and Blow Dry)
*Toiletries (100ml Hair Conditioner)
*Toiletries (100ml Hair Shampoo)
*Toiletries (250g Bar of Soap)
*Toiletries Moisturiser/Sun Block (250ml Moisturising Body Lotion)
*Toiletries Moisturiser/Sun Block (50ml Factor 30 Sunblock)
*Toiletries Nappies (Disposable Nappies)
*Toiletries Nappies (Wetwipes)
*Toiletries Pain Relief Tablets (24 Tablets)
*Toiletries Toilet Paper (1 Roll Double Ply)
*Toiletries Toilet Paper (1 Roll Single Ply)
*Toiletries Toothpaste (1 Tube Toothpaste)

 

Recreation and Culture Basket (Weight=6%)
*Books (1 New Paperback – Fiction)
*Cinema 1 Adult Ticket (latest release international (average of on and off peak where applicable)
*Sport (1 Hour Tennis Court Hire)
*Sport (1 Month International Gym Membership for 1 Person)
*Sport (1 Round of Golf – Green Fees)
*Theatre Ticket (1 Ticket to Evening Theatre Show)

 

Restaurants, Meals Out and Hotels Basket (Weight=2%)
*Hotel Rates (3 Star Daily Rate in City Hotel)
*Hotel Rates (4 Star Daily Rate in City Hotel)
*Hotel Rates (5 Star Daily Rate in City Hotel)
*Restaurant (Meal Out for 1 Inexpensive Excl Alcohol)
*Restaurant (Meal Out for 2 Mid-Range Excl Alcohol)
*Restaurant Burger Meal (International Franchise or similar)
*Restaurant Business Dinner (3 Courses for 2 at 5 Star Hotel Excl Alcohol)
*Restaurant Cappuccino (Regular, Medium)
*Take Away (1 Medium Sized Pizza)
*Take Away (1 Toasted Sandwich)
*Take Away (330 ml Water))
*Take Away (Coke/Pepsi (330ml)

 

Transport Basket (Weight=18%)
*Hire Purchase/Lease of Vehicle (Sedan Monthly Payment Only)
*Petrol/Diesel (1 Litre Premium Unleaded Petrol)
*Petrol/Diesel (1 Litre Premium Diesel)
*Public Transport (1 Bus Ticket 2 Stops City Centre)
*Public Transport (Taxi Start Normal Tariff)
*Public Transport (Taxi 1 Hour Standard Tariff)
*Public Transport (Monthly Pass (Central))
*Service Maintenance (Sedan Annual Maintenance)
*Tyres (1 Imported Sedan Tyre)
*Vehicle Insurance (Sedan Monthly Insurance)
*Vehicle Purchase (Price Volvo XC90 Manual New)
*Vehicle Purchase (Price Subcompact/Small / Economy (VW Golf 1.4 or Equivalent)

The cost of living difference is based on calculating the difference in cost in each location of selected basket groups. If you change the selection of basket groups you are likely to get different results, as some basket groups may cost relatively more and some relatively less between the selected locations.

 

Weights2 reflects the proportion of salary spent on each basket as a result of extensive research of actual spending habits. By applying the weights we have reported the weighted indexes which are used to report the overall weighted difference in the cost of living. The difference in the cost of living between different locations is expressed as an index.

 

As an example, dividing the cost of living in Location A by the cost of living in Location B may result in an index of 140. This means that Location A is 40% more expensive than Location B. A person who moves from Location B to Location A would need to earn 40% more in order to enjoy the same standard of living they currently have.

The exchange rate between two currencies specifies how much one currency is worth in terms of the other.

Most countries have a free-floating exchange rate. This means that its exchange rate is allowed to vary against that of other currencies, determined by the market forces of supply and demand. Exchange rates usually change almost constantly as quoted on the financial markets worldwide. Exchange rates change whenever the values of either currencies change. A currency tends to be more valuable when demand is greater than supply (i.e. when a large amount of that currency is sort after for purchase), and less valuable when demand is less than supply (i.e. when very little of that currency is required for purchase. This typically occurs when the majority prefer holding their wealth in some other form – possibly in another currency.

 

Current and future exchange rates incorporate interest rate differentials between 2 currencies. Large interest rate differentials may result in a temporary imbalance in exchange rates.

Due to these factors, 21st Century Expat makes use of an arbitrage exchange rate rather than the ruling exchange rate. Arbitrage is the practice of taking advantage of a price difference between two or more markets. The 21st Century Expat Arbitrage Exchange Rate calculates each currency against a single currency in order to ensure that any temporary price differences that may occur are negated.

This data is updated quarterly.

Hardship refers to the relative level of difficulty an expatriate and their family are likely to experience in adapting to their new location and the relative impact on their lifestyle when moving between different locations.

Our hardship ranking system measures the relative quality of living in each location, and assesses the relative level of difficulty that will be experienced in adapting to each location.

  • Economic Factors – e.g. poverty levels and level of service provision.
  • Political Factors – e.g. freedom / tolerance towards different points of view / lifestyle.
  • Religious Factors – e.g. freedom / tolerance towards different religions.
  • Public Service Factors – e.g. provision of water, electricity, sanitation, work permits etc.
  • Environment/Climate Factors – e.g. extreme weather.
  • Personal Safety Factors – e.g. personal safety / level of crime.
  • Health Factors – e.g. prevalence of disease and health standards.
  • Education Factors – e.g. education standards, prevalence of international schools.
  • Transportation Factors – e.g. prevalence of public transport, fuel and road safety.

  • Login using your username and password.
  • Check that you have purchased locations.
  • Select the Cost of Living Allowance Calculator (COLA) from the menu.
  • The calculator will prompt you for the following inputs:
    • Reference Information:
      • Give your report a reference name
      • Include the name of the individual for whom you are running the report. (This will help you identify your reports for future reference)
    • Locations:
      • Select the location that is being relocated FROM (Home)
      • Select the location that is being relocated TO (Host).
    • Cost Allocations:
      • Select the basket costs that will be paid for by the employee from his own salary (column on right).
        Please note that basket costs that are provided for by the employer are NOT included in the cost of living calculation. The default is that all basket costs will be paid for by the employee from their own salary unless otherwise specified.
      • Select what will be provided for by the employer or state,  for the employee (column on left).

NOTE: There is no point in selecting that ‘all costs are provided for the employee by the employer’, as then theoretically the employee would not need to earn a salary.

    • Currency Details:
      • Enter the appropriate currency. You can choose any currency, it does not have to be the currency of the selected locations.
      • Enter the salary amount in the current location, used to pay for the items indicated above as “Paid from Salary”.
        • This is used as the basis of the calculation.
        • You can choose the salary you wish to use as the basis for the calculation – for example, depending on your salary structure, you may choose to use:
          • Basic Salary
          • Base Salary
          • Guaranteed Cash
          • Total Cash
          • Total Remuneration
          • Any other structure.
          • We recommend using net salary (i.e. after tax) as the basis for the calculation, as we do not have tax tables within the calculator. This will provide you with the equivalent net salary in the “moving to location” equivalent net salary.
  • Run Report: When you are sure that all your selection criteria are correct, click on run report.

You can re-run your reports for each location purchased for the time period purchased, either seven days or an annual subscription.

The COLI calculator calculates Cost of Living Indexes for the locations you select using the home location you specify.

After extensive research of actual international expatriate spending habits, we have selected 13 basket groups of items to compare the cost of living between locations. The difference in cost is examined as an aggregate cost of all the items in each of the 13 basket groups in each location. This is done by using the average reported price in each location for the same quantity of each item. The 13 different basket groups are weighted according to expatriate expenditure norms.

  • The data is collected and updated on a continual basis.
  • The 3-month cycle involves closing off input and then conducting a rigorous quality assurance process before publishing the updated indexes.
  • Quality assured indexes are updated quarterly on 1st January, 1st April, 1st July, and 1st October.
  • The collected data (from more than 50 sources) comprises the local prices for goods and services applicable to expatriates.
  • Prices are converted to USD at the time the data is collected.
  • The goods and services have been grouped together into categories (baskets) and the cost calculated for each basket in each location.
  • The baskets have been weighted based on extensive research of actual expatriate spending habits.
  • The indexes are influenced by both the actual local prices as well as the ruling exchange rates at the time the prices were collected. Statistical fluctuations can occur – particularly as a result of old data dropping out, and new data coming into the database.
  • The maximum time between gathering prices and producing an updated index is 12 months. Data dated older than 12 months is dropped from the database based on the date it was collected. Any price on which the current index is based is therefore between 1 and 12 months old.

The salary amount should only be the salary that is exposed to the cost of living difference. The international benchmark for host net spendable salary is 40% of the home net salary. Therefore if 60% of the salary remains in the home country and 40% is paid in the host country then the COLA or SPPP calculation would only apply to 40% of the salary.

Income tax on salaries is excluded from the calculators, while mandatory sales taxes on goods and services are included. The prices collected in each location include applicable mandatory sales taxes. The objective is to arrive at the full price of all goods and services as applicable to a typical expatriate living in each location. This takes different forms such as VAT, GST etc.

The salary used in the calculator is the salary entered by the person running the report. You can use gross or net salary. However, the best practice is to use the home net salary (i.e. after tax) as the basis for the calculation. The resulting host net spendable salary is then grossed up for the appropriate tax in the host country.

The calculator will then apply the following formula based on the selections in the calculator: Salary x Cost of living Index Differential x Exchange Rate x Hardship Differential = Calculated Salary in new location If you use net salary the result will be the net salary in the new location. You would then gross up the net salary for tax and statutory deductions. The net salary in the home country is the input salary. This would be net of home country tax and statutory deductions. The calculated salary is the net host country salary. You would gross up the net host country salary by the amount of tax and statutory deductions in the host country. This approach ensures the net salary is adjusted for cost of living, hardship and exchange rate. It also results in the gross salary being comparable relative to tax and statutory deductions.

Each basket has a different weighting. The 13 basket groups are weighted according to Expatriate expenditure norms.

The following basket weights are used for the full set of baskets:

  • Alcohol & Tobacco 2.0%
  • Clothing 2.5%
  • Communication 2.0%
  • Education 5.0%
  • Furniture & Appliances 5.0%
  • Groceries 16.5%
  • Healthcare 5.0%
  • Household 30.0%
  • Miscellaneous 3.0%
  • Personal Care 3.0%
  • Recreation & Culture 6.0%
  • Restaurants Meals Out and Hotels 2.0%
  • Transport 18.0%

If you exclude basket items in the calculator then the weighting changes accordingly.

  • Select between 1 and all host locations purchased.
  • Choose from any one or all of the 13 baskets for each location. 
  • Reports for each location purchased can be re-run at any time during the purchase period (either seven days, or the annual subscription period)

The IAM calculator calculates the remuneration and benefits for a typical expatriate assignment of 6 months – 5 years, using your choice of home and host location. The report sets out clear guidelines to make an expatriate’s transfer both fair and financially viable, taking into account the reward structure and market dynamics of both the home country and the host country.

The objective is to ensure consistent equitable treatment and benefits for all expatriate assignees and have a user friendly reward structure to provide seamless coverage for different family scenarios.

The calculations use the build-up / balance sheet / home-based approach and include:

  • hypothetical tax
  • cost of living index
  • hardship premium
  • exchange rate
  • expatriation premium
  • benchmark housing allowance
  • benchmark transport allowance

  1. Login using your username and password
  2. Check that you have purchased locations
  3. Select “Calculators” from the menu
  4. Choose the International Assignment Management Calculator (IAM)
  5. The calculator will prompt you for the following inputs:
    • Reference Information:
      Give your report a reference name and then include the name of the individual for whom you are running the report. This will help you identify your reports for future reference.
    • Home Location Information:
      Provide the name of your Home Company, then select your Home Location and Currency.
    • Host Location Information:
      Provide the name of your Host Company, select your Host Location and Currency; then select the appropriate job level and family size.
    • Cost Allocations:
      Select the basket costs that will be paid for by the employee from his own salary* (column on right) and what will be provided for by the employer or state, for the employee (column on left). Basket costs that are provided for by the employer, are not included in the cost of living calculation. The default is that all basket costs will be paid for by the employee from their own salary unless otherwise specified. Note: There is no point in selecting that all costs are provided for the employee by the employer, as then theoretically the employee would not need to earn a salary.
    • Currency Details:
      • Home Base Salary:
        Provide the Basic Salary plus the cash value of all allowances and benefits. Base Salary excludes all variable payments and payments related to performance.
      • Hypothetical Tax:
        Provide the typical/Average (Hypothetical) Tax to be deducted from Home Base Salary, if applicable, in terms of home location prevailing tax rates.
      • Home Net Salary:
        This is the Base Salary less Hypothetical Tax and will automatically be calculated for you
      • Host Essential Spending %:
        This is the percentage of Home Net Salary to be used for spending in the host location. The international benchmark is 40%, however this can be increased or decreased accordingly. This becomes an input into the essential spending portion.
      • 40% Essential Spending:
        This is the amount of the Home Net Salary to be used in the Host Location. The international benchmark is 40% of Home Net Salary, however this can be increased or decreased accordingly.
      • 60% Home Net Balance:
        This is the balance of the Home Net Salary to be kept in the Home Location, however, this can be increased or decreased accordingly.
      • Expatriation Premium %:
        This is the percentage of the Home Base Salary to encourage international mobility. The international benchmark is 15%, however this can be increased or decreased.
  • Run Report:
    When you are sure that all your selection criteria are correct, click on run report.

The SPPP calculator calculates how much you need to earn in another location to compensate for cost of living, hardship, and exchange rate differences, in order to have the same relative spending power – and as a result, have a similar standard of living as you have in your current location.

Purchasing Power Parity (PPP) is an economic theory that compares different countries’ currencies to the cost of living difference. According to this concept, purchasing power parity is when the same basket of goods is priced the same in both countries / cities, taking into account the exchange rates.

You can choose the current salary you wish to use as the basis for the calculation. For example, depending on your salary structure, you may choose to use:

  • Basic Salary
  • Base Salary
  • Guaranteed Cash
  • Total Cash
  • Total Remuneration
  • any other structure

  1. Login using your username and password
  2. Check that you have purchased locations
  3. Select “Calculators” from the menu
  4. Choose the Salary Purchasing Power Parity Calculator (SPPP)
  5. The calculator will prompt you for the following inputs:
    • Reference Information:
      Give your report a reference name and then include the name of the individual for whom you are running the report. This will help you identify your reports for future reference.
    • Locations:
      Select the location that is being relocated FROM (Home) and the location that is being relocated TO (Host).
    • Cost Allocations:
      Select the basket costs that will be paid for by the employee from his own salary (column on right) and what will be provided for by the employer or state, for the employee (column on left). Basket costs that are provided for by the employer, are not included in the cost of living calculation. The default is that all basket costs will be paid for by the employee from their own salary unless otherwise specified.
      Note: There is no point in selecting that all costs are provided for the employee by the employer, as then theoretically the employee would not need to earn a salary.
    • Currency Details:
      Enter the appropriate currency. You can choose any currency, it does not have to be the currency of the selected locations.
    • Salary Amount:
      Enter the salary amount in the current location, used to pay for the items indicated above as “Paid from Salary”. This is used as the basis of the calculation.
      Note: We do not have tax tables within the calculator. We therefore recommend using net salary (i.e. after tax) as the basis for the calculation. This will provide you with the equivalent net salary in the “moving to location”. You can then apply tax to the equivalent net salary, if any tax is applicable.
    • You can choose if you want to apply negative hardship differences, or negative cost of living differences to your calculation by checking the box.
    • 7) Run Report: When you are sure that all your selection criteria are correct, click on run report.

You can re-run your reports for each location purchased for the time period purchased, either seven days or an annual subscription.