KUALA LUMPUR: Malaysia is still the cheapest location in Asia to hire expatriates last year, as it has come in at 40th spot in the global rankings of locations with the highest expatriate packages. 

According to the latest MyExpatriate Market Pay Survey published annually by ECA International, expatriates in Malaysia saw a rise in their cash compensation at a rate of 11 per cent, higher than the regional average. 

"Despite this, Malaysia remains the location in the region with the lowest salary and benefits packages for expatriate staff in 2021," said ECA International regional director for Asia Lee Quane. 

Compared to other countries in the region, expatriate salary and benefits packages in Singapore rose by four per cent last year in 2021 in local currency terms.

This was despite the city-state's fall to 22nd place in the rankings of the costliest places to employ expatriates globally. 

"Although rates of pay growth were relatively modest in local currency terms, once package values were converted into US dollar, their total value rose by a total of 10 per cent, which represented a significant recovery from the year before.

"Salaries recovered after falling by an average of US$1,000 per annum in 2020, while benefits costs, such as those around accommodation expenses, also rose as many employers provided financial assistance to their expatriate staff in meeting rising accommodation costs as the rental market bounced back in 2021," said Quane. 

Overall, he noted that the cost of employing an expatriate in Singapore rose by about 10 per cent to just under US$250,000 per annum, with cash salaries seeing increases of about 9.5 per cent in dollar terms. 

Elsewhere, Australia and New Zealand both saw significant rises of eight and 16 positions in the global rankings to seventh and 13th place respectively due to a variety of reasons including the strengthening of their currencies, increased benefits costs, and income tax changes in the past 12 months. 

China remains the location with the third-highest expatriate packages in the region after Japan and India. 

While China's position in the rankings remains unchanged, Quane said cash salaries paid to expatriate staff increased by over 11 per cent in 2021 in US dollar terms compared to the year before.

"This was partly influenced by the relative strength of the Chinese yuan, but may also be attributed to companies having to offer higher salaries in order to attract and retain expatriate staff, as China continued to impose its zero-Covid policy throughout the year," he said. 

Conversely, expatriate packages in Hong Kong saw much lower increases compared to the regional average, with salaries rising by 4.5 per cent and overall packages rising by only one per cent.

Quane added salary and benefits packages for expatriate staff in Hong Kong recovered slightly last year following a fall at the start of the Covid-19 pandemic. 

"Cash compensation packages rose by 4.5 per cent in US dollar terms, but this was lower than rates of growth seen in other regional economies such as Japan and Singapore. 

"Furthermore, the costs of benefits continued to decrease, as they did in 2020, contributing to a fall of three places for Hong Kong to eighth in our rankings," said Quane.