What's the cost of living in Hong Kong like?

Question: How about some basic info on things like rent prices, typical wages, cost of living, etc?

Mr B replies: For wages, a rough translation is that an HKD monthly salary is about the same value as an equivalent GBP annual salary (e.g. getting HKD30K a month is like getting GBP30K a year). Accommodation may be more expensive (though it's dropped a lot in the last six years), but you'll pay a lot less tax. I felt better off here on the same salary.

I used to be able to shock friends overseas with the costs of buying/renting property here, but HK property prices went on a downward slide for six years, bottomed out at last, and just lately have started going back up, while UK and US prices have mostly continued to increase over that time.

If you try to live exactly like you do at home and demand the exact same brands, then living overseas anywhere will be expensive. If you are willing to use more local brands, costs will even out. [See our articles on the cost of food, other common household items and accommodation, schools and transport for many direct comparisons of 'local' and 'expat' costs.]

I've just come back from a business trip in the US, and didn't buy anything there. If I do go there with a shopping list, it is probably for a specialty item from a store like REI, where maybe the selection here is more limited. Even that is less of an issue now, with online ordering of many things.

The only thing I can think of that would make a big impact is your size. I'm skinny, and not especially tall, so can find clothes and shoes here ok. Mr Tall will have a better idea on this, but I guess that if you are on the large size you may want to stock up on clothes and shoes before you leave home. [See also our articles on shopping in Hong Kong.]

A reader adds: I lived in Hong Kong for two decades before moving to London, Kuala Lumpur and then Kaohsiung (Taiwan). The cost of living nowadays is lower than pre-1997 days.

Question: If I'm offered a job by a Hong Kong company, what should I look out for in the package they offer me?


Mr B says: It's important that you find out what the total package would add up to. For example, if the employer is hiring you from abroad, in the knowledge you'll want a similar lifestyle to the one you'd have at home, then you'd look at whether your employment package includes rent for a larger than average (by local standards) apartment, school fees for children, paid flights home each year, etc.

Mr T adds: One other thing to remember is that your tax burden will be lighter here in Hong Kong than it would be in any western country. You'll be taxed here in Hong Kong at a flat 16%. US citizens are liable for US taxes as well, but at a far higher exemption level. (See also our FAQ on taxes in Hong Kong.)

Mr B is right - you really have to look carefully at the perks included in any job offer, especially the possibility of housing being provided or subsidized. If your potential new employer is offering you an upscale place to live in Hong Kong, this can be worth a great deal.

Also, pay attention to what's being offered in terms of a retirement fund contribution. The law here now requires that all workers in HK put away 5% of their salary each month into some kind of long-term savings/investment scheme. Some people have to pay this themselves out of their own salaries, but others get this covered by their employers, and some get significantly more than 5%. At the end of your tenure here, you get that investment handed to you as a lump sum. You need to find out how much you'll be getting in this area.

Also (this is becoming a trend) many companies in HK pay out highly variable bonuses; again, in banking and finance and some other fields these are often massive, but you're of course taking a risk in that some years you may get little or none.

Some companies also offer more 'colonial'-style perks such as flight allowances, subsidized school fees for children, and club memberships to their expatriate employees. Again, if you are offered any or all of these, they can add up to significant values, although they're obviously not fungible.

Finally, you have to be willing to forgo making exact comparisons in some areas. In particular, housing - keep in mind that most people here simply live in less space than most people in western countries. It's very possible you'll need to make concessions in this area (i.e. being willing to live in what might seem to you a small-to-mid-sized apartment instead of a house).

Fiona adds: Compensation is moving along the lines of 'all cash' in Hong Kong, i.e. pay is determined for the job and there's no real delineation for cash allowances within the total cash approach, though there is still often a packaging breakdown that allows the individual to reduce taxation by offering a housing allowance.

The days of housing/education and so on relating to family size are beginning to be a way of the past....the approach being that a job commands a certain level of compensation and how you spend that is up to you. And in line with this personal family decisions no longer have such an impact on an employee's cost to company -- the basic concept being the job is worth 100k a month and that's what we will pay, in total, leaving the individual to make spending choices. Great for the single guy/gal, not so great for the employee with a family.

It's hard to quantify medical insurance as a benefit, a lot of the group rates are pretty attractive when offered by a company, with pretty good benefits -- impossible to do a cost on cost comparison, especially with somewhere like the States. As for retirement, it sounds like they are offering basic MPF which is not that common but for someone on perhaps a contract basis it makes more sense than investing in a more generous retirement plan.


Cost of living comparison: NYC

This article from the New York Times seems only mildly tongue-in-cheek. It's a breakdown of how it's pretty much impossible to live a certain kind of life in NYC if you make USD500,000/year, i.e. the equivalent of HKD325,000/month, i.e. the amount of income mandated by for banking and finance bigwigs by the new administration in the US.

The article's pretty good, but it's a rip-off of one of the very best chapters in Tom Wolfe's satiric masterpiece The Bonfire of the Vanities. Wolfe wrote that in the 1980s, and proved that it was impossible to live properly in Manhattan on a cool million a year . . . .