For any new expat moving to Saudi Arabia, now has never been a better time to save. Why? Because their salary will be extremely competitive and they will most likely earn significantly more than they can in their home nation.
According to the Expat Explorer Survey from HSBC, Saudi Arabia’s strong economy and lower tax system is a big draw for expats with one in seven moving to take advantage of job opportunities.
Over three-quarters of those polled also say they earn more money than they did in their home country and have seen their financial status improve since they moved to the sovereign nation.
Salaries in Saudi Arabia are certainly on the higher side. According to the Gulf Business 2013 Salary Survey, CEOs of multinational companies earn an average $33,021 a month. A similar role in a local company can command $25,343. That compares to $31,080 and $22,756, respectively, for the same positions in the UAE.
But like anything, high salaries can come at a price. Saudi Arabia ranks near the bottom of the Expat Explorer Survey’s Expat Experiences at 29th out of 30 countries. Half of expats say they have become less active since moving there and raise issues such as the cost of raising a child with seven out of ten parents noticing an increased cost. Consequently, one in three say they are looking to leave the country.
But before an expat considers leaving Saudi, they need to weigh up the financial implications of doing so. After all, heading home to their home country will not only see their salary significantly reduced but they will invariably be taxed on their income.
Instead they need to evaluate the benefits, even short-term, of staying put and saving as much as they possibly can to give their finances a boost.
As an example, an expat construction worker earning $15,000 a month could save $27,000 in a year if he or she sticks to the globally recognised advice that you should save a minimum 15% of your income.
However, committing to a Saudi job for a short period of time and adopting a more stringent savings strategy could see that figure double to $54,000 if the same expat lowers their living costs and raises their percentage saved to 30%. If they did the job for two years and then left, they could walk away with over $100,000 in their back pocket.
Store all that cash in a local savings account or a high-interest deposit account – first making sure you have compared all the account options to find the most lucrative profit rate – and the expat would have a very lucrative leaving gift to take home with them. It’s worth considering.