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Australia is a beautiful country with a great mix of big cities and rural areas. However, not everyone can earn the living they deserve and fund the lifestyle they want, which is sending many Australians abroad. Hong Kong is a particularly popular spot, with more than 600 Australian-owned businesses in the region.
Many companies offer expat packages, which makes the salary and benefits difficult to pass up, but is it worth it?
One of the major differences between Hong Kong and Australian life is the cut-throat nature of businesses. Australians with business ambitions tend to stick around, while others prefer the more laidback lifestyle Australia is known for. For some people, there’s just no place like home.
So, how does Hong Kong compare to Sydney?
The cost of living breakdown
The average salaries after tax work out similarly, with both regions averaging AUD$6,300 a month. Sydneysiders have almost 2% higher purchasing power than Hong Kong residents. In contrast, Melbourne has almost 26% more purchasing power locally than HK-dwelling Australians. That’s difficult to overlook.
The only thing that will cost you more in Melbourne is eating out and public transportation. Transport, eating out, and leisure are more costly in Sydney, and while you will pay more for internet and mobile phones, utilities still work out cheaper than in Hong Kong.
Salary potential and tax considerations
According to Glass Door, working in finance in Hong Kong comes with a monthly salary of between AUD$6,300 and AUD$7,900, while the same industry in Sydney pays between AUD$6,300 and AUD$10,000. Software engineers command a monthly salary between AUD$8700 and AUD$12,000, while in Hong Kong,g you can expect to earn between AUD$4,600 and $8,500.
The thing many people forget to factor in is the difference in income tax – the highest tax rate in Hong Kong is 17% versus 19% for the lowest rate in Australia. You don’t need to worry about things like Capital Gains Tax in Hong Kong either, so ensure you do the math to get an accurate look at your take-home pay.
You can continue paying into your super even if you earn and pay taxes abroad, but you should consult a financial advisor to understand the taxation consequences. You’re likely better off contributing enough to keep it active. That way, it’s secure, regulated, and provides you with a range of insurance benefits.
Housing and property investment
The rental markets in Sydney and Melbourne are stressful because there are a lot of people after similar amenities. That can make things tough, but it’s still typically cheaper in these big Australian cities than it is in Hong Kong. The cost of purchasing a property in Hong Kong is much higher. If you’re thinking of maximizing investments, then property in Hong Kong is not the way to diversify your portfolio.
Many expats choose to purchase a home in Australia so they have somewhere to return home to, are thinking about long-term plans and retirement, or just want to maintain a safe investment. It’s cheaper to buy a house in Sydney, and there are expat home loans to make homeownership easier.
Financial planning
Before you move, it’s a good idea to sit down with a financial advisor who can offer guidance on retirement planning. Just because you’re going away and planning to work abroad doesn’t mean you should sever ties with your Australian life. You have to think about your investments, bank accounts, stocks, and managed funds.
One of the reasons many people keep roots in Australia is because they plan to return eventually. Although a return might not be in your plans, it’s good to factor it in. Owning a house in Sydney gives you a home to retire in. In the meantime, it’s a good investment and could be earning you additional income.
If you do choose to return, don’t forget to consider the adjustment in wages and the increase in income tax. You might be returning home, but the decision is just as big as the one you made to move in the first place.
Summing up
Hong Kong or Sydney? They’re both financial hubs, and with many similarities between the two, you would be forgiven for thinking there isn’t much difference. Ultimately, your decision might come down to your lifestyle goals and the type of work you do. If you’re in the finance industry, then Hong Kong may be the best choice to leverage your skills.
Regardless, many Australians who make the move choose to keep their financial toes in Australian waters to maximize investments and feather their retirement nest. If you’re thinking about making the move, start by speaking to a financial advisor to future-proof your finances.
