Money Matters

We find that teachers who are new to the international market are often do not know how to evaluate international teaching employment packages. They come to us saying, "I was making £xx in my old job at home, so I expect my new job to pay at least the same!"

Whilst this is an obvious comparison, it is not the most accurate way to evaluate the financial differences of living and working in another country. The three main factors that affect your correct calculation are:

• tax rates. It's important to evaluate take home pay (after tax) rather than gross salary (before tax). After working in your home country for a number of years, you intuitively know that, for instance, £30,000 salary before tax translates to £17,000 after tax but when looking at jobs abroad all bets are off. Always compare your after tax salary at home with your after tax salary abroad including income tax, national insurance/social security tax, superannuation and council/real estate/school tax. Some countries take more than 50% of your income in tax whereas some are completely tax-free and this makes a world of difference to your wallet, and it's what hits your wallet each month that counts.
• employment packages. Some packages offer free housing, medical coverage, end of contract bonuses (also called gratuity), no-absence bonuses, flights, utility payments, tuition discounts for children and more. Some packages offer very few benefits. Make sure you are evaluating the entire package as it applies to you. For instance, if you normally pay £100 a month for private medical insurance but your international school provides it free of charge, this represents a true saving to be calculated when evaluating an opportunity to work abroad.
• cost of living. Once you have calculated your monthly spending money after tax and expenses, it's important to evaluate how far your money will go. Surviving on $1,000 a month in an expensive city like Tokyo or London is extremely difficult and would probably require you to dip into savings, whereas having $1,000 a month in Cairo or Malaysia would allow you to save a large percentage of your take home pay. The cost of things you spend your money on: food, drinks, taxi fare, petrol and activities varies widely from country to country. Ask your Teachanywhere consultant for the cost of living factor in your country of interest so you can find out how much further your money will go.

  Note that if you have to send money home for loan repayments or mortgage payments, this money must be subtracted before you do any cost of living calculations.

  Below is an example of a teacher living in the UK and the same teacher living in two different regions in the Middle East.

  First, look at the yearly salary. Which job looks like the best deal?

  	UK (London)	UAE (Dubai)	Egypt (Cairo)
  Yearly salary before tax (1)	£28,000	£19,200	£15,600

  But do the following calculation of your actual expenses:

  	UK	UAE	Egypt
  Yearly salary before tax (1)	£28,000	£19,200	£15,600
  Monthly salary before tax	£1,770	£1,600	£1,300
  2009 Income and National Insurance (Social Security) tax	£564	0	0
  Rent, utilities and council tax	£500	0	0
  NET SALARY	£1,206	£1,600	£1,300
  NET SALARY ADJUSTED FOR COST OF LIVING (2)	£1,206	£1,920	£2,600

  Note 1: your salary abroad is paid in local currency but we have converted to one currency for sake of comparison.

  Note 2: US state department website publishes cost of living adjustments for US citizens abroad. We find this to be an accurate guideline reflecting the buying patterns of expatriates. According to recent figures, the UAE cost of living is at least 20% less than London, and Egypt is 50% less than London. The ‘net salary adjusted’ figure allows you to compare the buying power of your after tax, after housing salary.

  Surprised? Teachers new to international jobs usually are. But this quick calculation should be undertaken by all teachers wishing to go abroad to allow you to realistically evaluate the various posts on offer.