Cost of Living in Hong Kong

The cost of living in Hong Kong for an expat can be high. Listed 9th in Mercer’s 2012 Cost of Living Report, Hong Kong has an extremely overinflated property market, which makes finding accommodation an expensive endeavour to start with. Add to that the fact that the majority of produce and commodities have to be imported, and you tend to find that the necessities of life are generally more expensive in Hong Kong than in other cities. Nevertheless, the high expat salaries in Hong Kong tend to offset these costs, and many expats find their quality of life is higher than it was back home. 

Housing is the most expensive thing in Hong Kong, and depending on your needs, you can expect a high percentage of your salary to be spent on a small but perfectly formed apartment. The tiny, older Chinese-style apartments will always be more reasonably priced, but may not afford you the space you'd like.

Public transport is cheap, clean and reliable. By contrast, owning and maintaining a car in Hong Kong is very expensive. Most people find that they don’t need one if they live centrally, and the cost – and risk of bumping into erratic taxi drivers – is not worth it. Taxis are extremely plentiful and cheap; minimum fare is a modest 20 HKD when the meter starts running, but most journeys within central Hong Kong won’t take you above 50 HKD.  

Education is free in Hong Kong for state-run schools, but the majority of expats who come here with kids want their children to go to one of the private international schools that teach in English and follow a Western curriculum. These can be incredibly expensive, and expats should make sure their salaries will cover school costs before signing a permanent contract.

Healthcare, is free if you use the public system, which is very good but heavily oversubscribed. Most expats organise a private insurance plan through their employer.

Cost of food in Hong Kong

Thanks to its proximity to China, there are many things that can be picked up cheaply in Hong Kong. Household supplies, clothes and other bits and pieces are made just across the border and flown freely into Hong Kong, and are thus very affordable. China also provides a lot of Hong Kong’s fresh food and grocery items, and if you are happy to go local in terms of produce origin, the weekly shop can be easy on the wallet.

That said, most Westerners do not want to go local, especially with stories of questionable farming practices and food additive scandals hitting the papers regularly. You can expect to pay double for a lot of food and produce items (especially imported meat), and grocery shopping will quickly add up.

There is no shortage of Western items on international supermarkets shelves: Tim Tams and Vegemite for the Australian market, Graham crackers and Ranch dressing for the US visitors and Tiptree jam and Marmite for the Brits. Not to mention, the Japanese supermarkets, Thai food shops and Philippine speciality stores stock their own culinary assets from home.

The cost of eating out and drinking out in Western-style bars and restaurants can be moderate to high.

Income tax in Hong Kong

Income tax in Hong Kong is famously very low (between 2 percent and 17 percent, depending on your personal circumstances), and you have a fairly generous annual tax free allowance before the government takes anything.  

The low tax rate is a major selling point noted by expats who choose Hong Kong as their destination; tax rates of 30 to 40 percent in other APAC cities can eat a fair chunk of your salary.

Do investigate your tax obligations thoroughly before you commit to relocation.  Some US citizens, for example, find they end up having to pay tax in both countries, and even if you are not obliged to pay tax at home, you may still need to fill in a tax return if you own property or maintain other assets.

On a final note, tax is all done on a personal tax return basis, and not pay as you earn. When you start work, it is advisable to start saving your tax somewhere so it is ready and waiting when you fill in your tax return, and get the bill from the Hong Kong Inland Revenue in its distinctive green envelope.   

►Click here to Calculate your tax obligations

Cost of domestic help in Hong Kong

One huge bonus to living in Hong Kong is that domestic help is cheap and reliable. Most families have a full-time helper, usually from the Philippines or Indonesia. They are recognised legally, and work in Hong Kong on a specific type of ‘helper’s’ visa. These full-time ‘domestic helpers’ can be employed for a few thousand Hong Kong dollars a month, and work a six day week, with bed and board being provided by the employer. This means that you can usually afford to have someone at home to help with cooking, cleaning, childcare and other domestic chores while you are in the office working the long hours that most expat jobs in Hong Kong demand.

Salary packages and wages in Hong Kong

Generally speaking, wages in Hong Kong are higher for expats than for an equivalent position in another country. The hours are long and positions demanding, but expat packages are still quite generous when compared with local packages.

A good expat package for a senior role should include some or all of the following:

• Housing allowance
• School tuition for any children you will be bringing with you, and help to get your kids into the school of your choice
• Health insurance
• Flights back to your home country every year.

Not all packages will include everything, and obviously the more junior the role, the fewer the incentives offered. However, all of the above are acceptable to ask for if you are negotiating with a prospective employer.

Keep in mind that accommodation will be your largest expense, and even if you don’t get an allowance, at the very least, some employers will help you to ensure that your rent is tax deductible (another good thing to negotiate into your employment contract).