Calculations

In a corner of the Scottish lowlands in the quaint town of Wigtown there is a studio apartment named The Open Book that is let out for only £28 a night on Air BnB (here).Those who have lived or travelled in the UK will recognise this as a very good deal. What’s the catch?  You have to work at the bookstore during your stay.   Adrian Turner, director of the Wigtown book festival, said of the idea: “I wouldn’t call it a working holiday. It’s a particular kind of holiday [for people] who don’t feel that running a bookshop is work.”

Knowing what a good deal looks comes naturally when you are at home. And when contemplating moving abroad most people use the same home-based ‘measuring stick’ to understand their expected costs and savings potential. It makes sense, right?

Wrong.

Understanding the cost of living is one of the most important factors that influences your savings potential. It’s just as important as things like tax percentage, if housing is provided, and what is your basic salary.

Let’s go through some examples that illustrate how the employment package and cost of living can affect your wallet. 

 

 

US Teacher (North Carolina) earning $45,000

UK Teacher  M3, London Fringe earning £26,160

Gross salary per month

$3750

£2180

Rent or mortgage

-$1000

-£600 (including Council Tax)

US Taxes- Federal, State (NC), Social, Medicare

-$860

 

UK Taxes –PAYE, NI

 

-£460

Other

-$100 (Medical Insurance/co-pay/deductible)

 

Utilities

-$100

-£75

Net salary after tax, medical and housing

$1690

£1045

 

 

Let’s compare this to two international packages.  Because of the comprehensive package it’s easy to see why people teach abroad once you do the mathematics.

 

Middle East (Dubai)  AED132,000/yr      (US$36,000/£29,000)

China (Shanghai) RMB324,000/yr  (US$47,000/£38,000)

Gross salary per month

AED 11,000 ($3000/£2440)

RMB 27,000 ($3900/£3200)

Rent or mortgage

 0 (provided)

0 (covered by allowance)

US Taxes- Federal, State (NC), Social, Medicare

 0

0

UK Taxes –PAYE, NI

0

-RMB 7000 (Shanghai)

Other

 

 

Utilities

 -200AED

(covered by allowance)

Net salary /month after tax, medical and housing

AED 10800 

(US$2940/ £2400)

RMB 20,000

(US$2900 / £2350)

 

Your disposable income is around double what you have at home because your outgoings are covered by your international school employment package.

………… but let’s look at the cost of living. How far does your money go?  According to Expatistan..

  • Shanghai is 38% cheaper to live than London and 5% cheaper than Raleigh NC, USA
  • Dubai is 16% cheaper to live than London, but 17% more expensive than Raleigh NC
  • Shanghai is 35% cheaper to live than Dubai.

So even though you have a tax free salary in Dubai, you should actually be able to save more in Shanghai due to the lower cost of living.

Where you teach is a matter of personal preference and opportunity. But we encourage you to fully understand the international employment package before you restrict yourself to a particular location because there may be a better deal in an unexpected place! 

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