Expatriate Pay - Dubai Most Expensive Place in World for Restaurants Meals Out and Hotels

According to the March 2008, Xpatulatorfor expatriates. Thirdly and probably most
international cost of living comparison, Dubai,importantly, it is vital that accommodation be
United Arab Emirates is the 32nd most expensivenegotiated as a provided benefit. The cost of
city in the world for expatriates to live in.accommodation (rent or mortgage and utilities) in
The findings of the international cost of livingDubai is ranked 5th most expensive in the world
comparison of 228 international locations,for expatriates. If you were to negotiate an
conducted by the international relocation calculator,expatriate package that does not include
shows that Dubai is most expensive foraccommodation, you will find a large portion of
Restaurants, Meals Out and Hotels and leastyour salary having to be spent on a house or flat,
expensive for Communication.which will make it very difficult to save money
The international cost of living comparison useswhile living in Dubai.
the prices of goods and services that expatriatesExpatriate Salary Approaches
spend their salaries on in each location, andCost of living information is used by organisations
calculates cost of living indexes (COLI) for 13to establish salary levels for expatriates
different basket groups using New York as theundertaking international assignments. How the
base (i.e. New York is equal to 100).cost of living information is used depends on the
The most expensive city in the world forpay methodology adopted by the organisation.
expatriates is London. At the other end of theThere are 3 mainstream approaches to
rankings, the least expensive city (again – forestablishing salary levels for international
expatriates to live in) is Harare. On average,assignments, the build-up approach, the salary
goods and services that cost an expatriatepurchasing power approach, and the cost of living
US$100 in New York would cost US$126.6 inallowance approach.
London, compared to just US$16.4 in Harare, andSalary Build-Up Approach
US98.84 in Dubai.The build-up approach uses the expatriate’s
Dubai Cost of Living Baskethome salary as the starting point and then builds
For each aspect of cost of living Dubai is rankedup the salary package for an international
by Xpatulator as follows (Out of 228 internationalassignment. Typical elements added to the salary
locations, ranked from highest cost of living toare for cost of living differences, hardship
lowest cost of living):differences and exchange rate. Hardship is the
•Alcohol & Tobacco (Alcoholic Beverages andrelative difference in the quality of living a person
Tobacco Products): 104thand their family are likely to experience.
•Clothing (Clothing and Footwear Products): 4thFor example a person earning AUD$100 000 in
•Communication (Telephone, Internet, andSydney taking up an assignment in Dubai would
Mobile Communication): 221sthave the following build-up:
•Education (Creche, Primary, Secondary andBase Salary AUD$100 000 X COLI X Hardship
Tertiary Fees): 127thPremium X Exchange Rate = Assignment
•Furniture and Appliances (Furniture, HouseholdPackage in US Dollars.
Equipment and Household Appliances): 159thUsing Xpatulator a person earning AUD$100 000 in
•Groceries (Food, Non-Alcoholic Beverages andSydney, would earn an assignment package of
Cleaning Material): 91stUSD$89 710 in Dubai.
•Healthcare (General Healthcare, Medical andSalary Purchasing Power Parity (SPPP) Approach
Medical Insurance): 28thThe salary purchasing power parity approach
•Household (Rent, Mortgage, Water, Electricity,seeks to achieve parity between international
Household Gas, Household Fuels, Local Rates andlocations. What would be the equivalent of a
Residential Taxes): 5thsalary in Dubai in other places in the world in
•Miscellaneous (Stationary, Linen, Generalterms of purchasing power? We compared
Goods and Services): 32ndpurchasing power by comparing salary levels
•Personal Care (Personal Care Products andadjusted for cost of living differences, and relative
Services): 97thhardship using Xpatulator.
•Recreation & Culture (Books, Cinema, DVD,A salary of USD$75 000 in Dubai is equivalent to:
Sports Goods etc): 50th•USD$67 980 in Beijing
•Restaurants, Meals Out and Hotels: 1st•USD$57 812 in Johannesburg
•Transport (Public Transport, Vehicle Costs,•USD$96 089 in London
Vehicle Fuel, Vehicle Insurance and Vehicle•USD$71 239 in New Delhi
Maintenance): 159th•USD$79 533 in Paris France
The large differences in the ranking of eachThis means that an organisation with a head
aspect of cost of living has important implicationsoffice in Dubai, and an international office in New
for people negotiating an expatriate salary inDelhi would pay a position that is paid USD$75
Dubai. Dubai has 3 basket categories that are000 in Dubai, USD$71 239 in New Delhi in order to
ranked in the top 5 most expensive places in theachieve the same salary purchasing power in each
world. It would save an expatriate a great deal oflocation.
money to try and include these items as benefitsCost of Living Allowance (COLA) Approach
that are provided by the employer, over andOrganisations that make use of Cost of Living
above the salary. Firstly, Dubai is the mostAllowances (COLA) use cost of living information
expensive place in the world for restaurants,to determine how much COLA to pay for
meals out and hotels. Unless these costs areinternational assignments. A COLA is an allowance
covered to some extent as, for example a paidpaid to an expatriate to ensure that they are
business expense, eating out will be almostcompensated where the cost of living is higher
unaffordable to most expatriates. Secondly itthan their home country. Where the cost of living
would be worth bringing clothing with you fromis lower, most organisations do not adjust the
where ever you are based prior to moving tosalary downwards, they would simply not pay a
Dubai, as the cost of clothing and footwear isCOLA in such cases.
ranked the 4th most expensive place in the world