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Working Internationally--What Should It Pay?
Knightman asks: "I recently had a discussion with a friend that works with designing hardware. He had been offered a consulting job abroad where he would get $50/hour, which I thought sounded a bit low considering that my company charges double that for me when I do work for a customer and I'm a programmer and not a hardware specialist that a Silicon Valley company wants to hire. After some discussion back and forth we realized that we had no clue whatsoever on what to charge for a job done abroad. So I'm wondering what is the difference between countries when it comes to charging for a job? And are there any online resources where you can compare this?"
It would be interesting to know where exactly he is going to work. Do you know what the cost of living in the country is, typically? While I don't know of any resources, you might find it easier to do some comparisons with your current income/cost of living, the overseas nation, and compare it to other places that you know of. I would also factor in the general pain in the ass of living overseas. :)
NSParadox
Unless mankind redesigns itself
Just my 0.02
Capt. Ron
crazy dynamite monkey
I know abroad that gets $20 for a 'job
If you will be living abroad for a while, you have to look at the rate of inflation that you will be dealing with. To figure out if you are adequately compensated, may I suggest this resource of a measurement that accounts for inflation and other forms of currency fluctuation.
The Purchasing Power Parity measurement, or PPP, measures productivity and standard of living while factoring elements such as varying standards of living in different countries. Find out how to calculate it for any country at the above link.
Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate between two countries should equal the ratio of the two countries' price level of a fixed basket of goods and services. When a country's domestic price level is increasing (i.e., a country experiences inflation), that country's exchange rate must depreciated in order to return to PPP.
Unless you are paid in dollars, you will experience the dramatic fluctuations in PPP experienced by native IT workers and for that matter all workers in that country. This is, of course, not the case for those countries whose currencies are pegged to the dollar.
Perhaps, IT workers, due to their crucial role in all global economies, can work to give countries whose currencies are especially unstable a bit more stability. Take the risk, ask to be paid in the native currency, and the company you work for will have an incentive towards building stability in its foreign posts. Also, shoot for more long-term work rather than projects of a few months. It would be a good thing for information technology folks from the West to get some understanding of the perspective of the rest of the world.
Goat sex free since 2001
Having worked both in the UK and now in New Zealand I know from personal exsperience that you can not easily compare remuneration. You have to take into account....
1) What are you happy earning - based on your experience etc. If you are not being paid in your home currency you may find that the exchange rate may help you with this but look at the following points too.
2) Cost of living varies incredibly between countries for example petrol (gasoline to the majority of you) costs three times as much in the UK as it does here in NZ. The cost of a beer varies almost as much. In many cases you pay in Pounds Sterling waht you pay in NZ dollars. I.E if it costs 3 kiwi dollars it will cost 3 pounds too! and yet the exchange rate put the NZ $ at around 0.3 pounds. Obviously things will vary - esp if you are starting out in the US.
3) Does the deal include accomodation and expenses - nice if you can get them!
4)Are there any other benefits included - a lot of overseas contracts include x number of flights home per year - thats a great perk.
5) Of course the reverse of 2 above applies. If you go to a country where the cost of living is cheaper your $50 US goes a lot further. $50 US an hour would equate to over $200,000 p.a. in local currency here in NZ - which is WAY above what most IT personel would dream of! and boy - would it go a long way!
Just some thoughts.
and as always YMMV!
"Linux users never complain about Microsoft. They don't need to!"
salary comparison calculator: note it does not take into account local tax variations, etc. (they've got a page that goes into details on the source material)
http://www.homefair.com/calc/intsalcalc.html
rough conversion weights:
http://www.expatforum.com/Resources/icol.htm
YMMV
He should be very careful about this - legally he has to at least file a US tax return (assuming he's a US citizen), though he may not actually owe any taxes (there are some credits, see the IRS publications for details). His chances of getting caught are probably pretty low, but it's entirely possible that not filing at all for a couple of years will get him flagged for an audit next time he does file after he returns home.
I'll stay out of the politics of whether it's right or not for the government to tax you when you're working internationally beyond one comment: for a US citizen, even if you're out of the country there are advantages and services that are available to you (at embassies, etc.) because of your citizenship. Taxes pay for those even if you don't use them, the same way taxes pay for your local fire department's services even if you don't use them.
The IRS FAQs for people working internationally are at http://www.irs.gov/tax_edu/faq/faq13.html.
-- fencepost
fencepost
just a little off
I remember sometime last year when it was noted that, for a brief period of time on the markets, USD 1 = JPY 100 = EUR 1 (or for those unable to translate fiscalese, a buck, a euro-equivalent, and a hundred yen were interchangeable).
This does NOT mean, though, that your euro equivalent, dollar, and hectoyen could buy you the same amount of stuff.
Examples: A 750 mL bottle of a decent wine costs you at least $15 here. You can get wines of same quality for maybe FFr 50 (7 Euros), maybe cheaper.
A computer can be acked in the US for $400. A similar computer will run you an extra 50% or so in some parts of Europe.
These are hack and slash quesses, mind you, but the idea is this: A given amount of money means different things in different places.
I used to be someone else. Now I'm someone better.
Real life is underrated.
Cost of living is less? I'm sorry but that is total dreamland, especially when you consider that Sweden has one of the highest costs of living in Europe.
...). On most non-food things you will have a rate of 25%. My income tax in Sweden is 33.8%. That is the base tax area for where I live (Bromma, West Stockholm). I do not earn enough to be in a higher tax bracket.
You will get hit by tax badly. VAT (sales tax) is what really surprises me. It is on everything, literally (I am a Brit and therefore used to no VAT on food, books and suchlike
I hope you are not a drinker as Sweden has some of the most blatantly ridiculous alcohol prices in Europe. If you want to drink at home then you will have to buy alcohol from System Bolaget, a state owned liquor store chain. There are nowhere near enough of them, they close really early during the week (usually 7, maybe 8 on Thursdays and Fridays) and only open (if you're local one opens at all) for a maximum of five hours on a Saturday (10-3). There are no Sunday openings.
There are more job opportunities than you can shake a stick at. Just about every IT company has an office in Kista, a northern subhurb of Stockholm. They like to think of the area as "Europe's Silicon Valley". The local shopping mall even has a Sweden/Silicon Valley clock. If all else fails, try to work for Ericsson. Every Swede appears to have at some point. They probably throw you out of the country if you haven't worked for them within 3 years. *grin* Telia, the recently privatised Telecoms monopoly, is also a good bet.
Just about everyone below 30 speaks incredible English. This however, can be a problem if you are trying to learn the language. Swedes can hear my English accent from a mile off, so even if I start a conversation in Swedish they will always reply in English. This sometimes gets to me and I end up in the bizarre situation of a Brit speakign Swedish to a Swede speaking English.
If you are a happy tax payer you can always got to the recently privatised (a bit of a theme here) SFI, who give you Swedish courses for free. I have no wbeen learning for 9 months and all books and two 2.5 hour lessons a week after work are free.
Really bizarre thing: I hope you don't tend to take sick days. In Sweden you will not be paid for the first sick day and will only receive 80% of your pay for the second. If you do take a day off you make damn sure you get better before you go back to work. If you take a day off, then come back for a day and then take another day off you will lose two days pay. Well, unless you are creative with your timesheet (which everyone in my office is). Either that or just claim it as on eof your holidays - and seeing as you get a ridiculous 28 days holiday plus IIRC 9 "red days" plus, if you are lucky, a half day before the "red day". It is no joke that some companies practically close down for a month or two over the summer. With so many holidays many people take a MONTH off.
Hmm. Went on a bit there. I know some things there sounded a bit negative. Sorry, it isn't a diss at Sweden. I love the country and am very glad I moved here. Hope I was som ehelp. Maybe I should go to bed now.
Sweden is a beautiful country. I'm sure you would like it. Like all other countries there are pros and cons. As an employee there are several pros and at least one major con:
Pro #1. If you are into wireless stuff (RF, Blue Tooth,
Pro #2: Employee benefits. How about state of the art office spaces with closed-door-offices, lots of daylight, really nice functional furniture and high-end computers? Or how about 50% more bank holidays and 5 weeks of vacation?
Pro #3: Language won't be a problem. You can almost expect anyone under 65 to understand English. You can also expect anyone under 50 to speak pretty good English. There are also quite a few people that speak, or at least understand, German.
Con #1: Taxes, taxes and more taxes. If you like to control your own money, Sweden will drive you crazy. Income tax is between 30% and 56% depending on how much you make. Sales tax is 25% for most goods and around 12% for most services.
So, how does Sweden compare if you look at the standard of living? Well, there's good and bad news. Because of the high taxes it is difficult to reach a level where money isn't a problem. You will have to be paid a really good salary to not have to worry about money. The cost of living in or around Stockholm is quite high, so if you would like a nice standard of living you would probably want to look for someone to pay you at least 35000 SEK per month. If you're in the high-tech industry that shouldn't be too difficult. To not have to worry much about money you should look at a salary of 45000 SEK or more per month. This is attainable, but you need to be a manager or someone that really is in demand.
/Daniel, now working in San Diego (pro: weather, con: traffic)
Free your mind!
You might have just asked a lawyer, who will always tell you, "It depends" :-)
It sounds like a foreign company is hoping to get some american talent for cheap. It depends on where the job is, and what the living and working environments are.
There are a bunch of factors to look at, start with taxes.
Americans have to pay taxes (or at least file a return) even if they pay taxes while working in another country. The U.S. is the only country in the world not to have signed the UN treaty on double taxation (ok, count Somalia, Bhutan and a few tiny, recently created countries as exceptions). What this means is if you earn more than about US$60,000 while working overseas in any 12 month period, the US wants your taxes, even though you have to also pay taxes in the country you were living in. The US$60,000 exemption only counts if you have absolutely no income in the US during any calendar year while away overseas, and that includes interest on savings accounts or gains on stock even if you didn't sell and realise a profit. Factor this in. Americans overseas need to charge a lot more to cover the eventual double taxation.
The cost of living varies from country to country. A LOT! Even in Europe. There are websites with indexes for many of the various costs, such as local taxes, rent, meals, food, transportation, etc. The money I earn in Belgium wouldn't carry me very far if I lived in London, but would be great for Poland, Portugal or Tunisia.
The quality of living varies enormously as well. Dublin has a great nightlife, but it closes down way too early. London has great curry but the suckiest and most expensive transportation system. Paris is, well, full of Parisiens, but Americans love it. Roma is full of Italian women. But if you get stuck in Tangiers, Izmir, Kiev, Kinshasa or Ulan Bator, no huge amount of salary will make up for a year or two of hellish or dangerous living.
In Europe, a good freelance hardware consultant, willing to work as a complete independent, pulls in between US$800 and US$1500 per day. (Note, nobody uses hourly rates when contracting, just daily). Independent means just that, the company expects you to show up and work in return for money, and doesn't want to hear about work permits, housing problems, kids, taxes, health insurance, or anything else. So you have to more than double a normal salary to include health insurance, local social charges, your own accountant, rent, car hire, and transportation to the area. Take out 25%-75% income taxes, and you may be left with very little actual income. $50/hour is only $400/day, which is tiny for anyone with a degree and some experience. Check jobserve.com for some going prices around Europe, mostly in England.
If you have any experience as a freelance consultant, you start to think in these terms: There are 20 to 22 work days in a month. Half of all days are eaten up in taxes, social security and an accountant. Subtract a day or three for each flight home. Rent or hotel should not be more than 3 days pay for each month. Local hire car, 2 days pay. At the end each month, you will have 3-7 days pay as your profit. Would you only want to earn US$2,800 for a month of work as a highly paid professional? At least triple your rate.
If the employer wants to make you a regular employee, find out from ex-pats in that country what the working conditions are like. How stable are jobs? If you quit, how much can your employer hold you for? What is typical rent in the area? Are ex-pats regularly cheated by not speaking the local language fluently? Can you be arrested at the airport without a letter from your employer allowing you to leave the country (i.e. Oman, Saudi, Malaysia, Indonesia, Tunisia). Will your passport be siezed by your employer until the successful end of your contract? Can you legally take your salary out of the country?
Anything the company is offering up front is loaded in their favor and against you. Know exactly what you want, and tell them every condition before even drawing up a contract. And make sure everything is clearly in writing, especially what you have to deliver to ensure a clean end to the contract.
So many questions. At least slashdotters are filling up the forum with lots of things for you to think about. I could go on for hours, but the Guiness is wearing off and bed calls. Give this forum a few days, and then make up a large list of additional research you need to do. Working overseas, especially if you are earning an obscene amount of money, can be very rewarding, and not just financially. Once you start traveling and having fun in many new places, you can never really go back and settle down.
the AC
Hemos is like...sci-fi fans;he thinks technology is cool, but he hasn't bothered to understand the science it's based on
I own a software/engineering development company in Canada. Most of our work is done internationally and the going rate depends on where you are doing business.
For Instance:
Middle East: $2500-3000 USD per day
India: $400 USD per day
USA: $1000-2000 USD per day
England: $2000-2500 USD per day
Russia: $1000 USD per day (take the money in advance.
etc.
Contracting really has to do with how well your market yourself. I know some really shitty programmers who make a lot of money in foriegn countries. To be honest, I have worked abroad for the travelling experience, not for the money. Leaving home for money -- is a little weak.
-Angreal
These last two years have been spent working for American companies. My salary is probably higher than the industry average. And because I can speak Japanese an English, I have more opportunities made available to me, and I'm sure I have risen higher up the corporate ladder than I would have had I been working at the US HQ.
As for contractors, the ones that I've known who can speak both their native language and the language of the country that they're working in can charge an arm and a leg. But unless you are married to a Japanese and have a spouse visa, you won't be able to take advantage of this, since you can't get a work visa in Japan without having a company in Japan to sponsor you.
In any case, you should earn enough to live on no matter what you do. It's up to you to decide which style fits you best. For me, it is obviously the American company, but I know others who are perfectly happy working in (abusing?) the Japanese environment.
Actually, I used to work in the UK before (tremendous cost of living, by the way) and I decided to move to Japan.
As you say, the resume/interview/hire cycle was impossible with Japanese companies, but for international companies, it is possible to do the recruiting part locally and then get hired abroad. (I also did that when I got my job in the UK since I was studying in the US at this time).
BUT... If you want to work in Japan, unless you are very very lucky, you have to speak Japanese... And among the new language, chopsticks and raw fish, you also have to cope up with Japanese people, which is by far the most interesting.
Concerning the cost of living, yep Tokyo is 'the #1 city' as some smart-ass newspaper declared, but this study has certainly be done by some American newspaper, and I am pretty sure that they meant 'the most expensive city if you live the American way'. Japanese people are used to live in small flats, barely eat meat and eat out a lot, so if you want to setup a barbecue in the garden of your 200 square meters house (which would be a cheap 'experience' in the US), then you are gonna pay a lot for that.
But Tokyo has some great advantages: where else can you buy a cell phone with a digital camera and that plays mp3s?..
Just my two cents...
V.
1) It is *very* expensive to live over here if you have a family. Don't plan on sending your kids to school, unless your company is giving you some kind of expat package.
2) Don't plan on living in anything bigger than 6-8 tatami mats (20X20 space ?) unless you do have a family, and the company will compensate you for a bigger apartment. Don't plan on spending a lot of time there either.
3) The financial business has the most demand, and pays the most for IT people over here - that means generally US based companies, but they like to hire locally - meaning you get nothing more than an average Japanese citizen (forget those classes).
4) Generally companies won't hire you from the US by you sending in your resume and hoping them to contact you. You need to alrady be here in Japan, and already living here some way.
5) Salaries are usually set around 500,000 - 800,000 yen for people right out of school in the IT industry,if you get lucky. That's about 45-75 grand, but remember that you will be living in the most expensive city in the world, and it isn't just a joke. I persoanlly wouldn't take another job here with a salary lower than 2.0 M Yen (185 grand), and an expat package.
Here are some things that I did:
I got hired form the Disco Job Fair in San Francisco. You can also attend the Boston fair if that is more convenient for you. Find out early from a Japanese teacher at your school when it is.
Pick up a magazine called Japan Inc. and contact all of the headhunters/recruiters in there - http://www.japaninc.com/ - e.g. Advance - Woody Hodgson @ +81-3-5288-5383
Expect rent to be in the $1000's, expect a lot of working late, working a lot with foreigners like yourself, and don't expect to be promoted within the company. Don't expect a 401k, and expect your Internet connection to be limited to what you can use at your company, or connecting at 28.8-56k and being charged 4x's as much as the US for it (It's getting a little better though).
Your welcome to contact me if you have any specific questions.