International school employment packages can be difficult to understand especially for teachers who have never taught abroad. Often, internationally inexperienced teachers consider only the basic salary, but ignore the effects of tax and cost of living, and other possible benefits such as housing, flights, and dependents school fees because these are things that they assume will be similar to their current situation. But nothing could be further from the truth.
The key is to understand what money you will have in your hands at the end of the month, and what that money will buy you, which affects how much you can save when you teach abroad.
International teacher employment packages are usually made up of five components:
Cash payments: Salary and bonuses
Tax status or tax relief
Housing benefit (optional)
Flight benefit (optional)
Dependent benefits (optional)
And the money you are left with at the end of all of this is affected by
Cost of living
International school salaries vary widely – from 500 US dollars a month to in excess of 5000 dollars a month. Salary is often the first thing teachers' look at when evaluating a job, but it should only be the starting point.
Salaries may be quoted on a monthly or an annual basis for the duration of your contract, which is usually for 1 to 3 years.
Bonuses are benefits sometimes offered to teachers at the end of a contract, end of year or performance related. They are a legal requirement in certain countries such as those in the Middle East. When evaluating a bonus as part of a package, make sure you understand how it is calculated , what you need to do in order to earn it, and how realistic it is that you will receive it. This will determine if you should include it in your calculations or not. In the UAE for instance, employers are required to pay a bonus based on your basic salary to be paid on you completing your contract i.e.if you break your you are not entitled to it. On the other hand in a state school job in the Far East, your bonus might be dependent on how your students rate your teaching, so receipt of your bonus based on this approach is less predictable.
The tax rate in a particular country has a huge effect on your take home pay. After all, it's not what is on your contract, but what you have in your hands at the end of the month that you can actually spend.
To compare your earning potential at home and in a lower tax or no tax country, it is important for you to first calculate your take home pay, after tax. This should include what you pay in federal or national income tax, state or regional income tax, national insurance or social security taxes, and real estate taxes if you typically pay these.
The trends for taxes are as follows:
Many international school packages offer housing and flight benefits. In places where housing is difficult for teachers to find or arrange, such as parts of the Middle East where a full year's rent and residency papers are required upfront, schools will arrange the housing before you arrive. In other regions, where housing is plentiful and less difficult to arrange, you may get a housing allowance.
The quality of available housing stock varies from region to region.
Key insights for housing are:
It's always a good idea to ask for pictures of typical accommodation available, and even to talk to teachers already at the school to determine what you can expect. But remember that housing is a reflection of the locality, and it will almost certainly be different than what you are leaving at home.
Once you have determined your disposable income, you now need to consider what that money will buy. For instance, $1.00 will buy xx times more in (low cost country) compared to (high cost country) which directly affects how much you need to earn to live comfortably and conversely, how much you are likely to save.
For those who have not worked abroad before, consider this example:
Let's consider the cost of two different holidays.
Holiday One is to an expensive location, such as Disneyland, New York City, Tokyo, Switzerland or Singapore. You intuitively understand that the cost of even a tiny hotel room, entertainment, transport and even a hamburger at a nearby restaurant is going to be more expensive than you are used to. You know your budget for this trip will need to be pretty big if you are going to enjoy yourself the way you hope to do.
Holiday Two is to an inexpensive location, such as Egypt, India, Vietnam, Peru or even a camping holiday in a state park in your home country. You understand that lodging, food, entertainment and transport will feel cheaper than it does at home and you spend the holiday amazed at what your money can buy you.
Teaching abroad is in many ways similar to going on holiday. You may have more or less buying power for each dollar or pound, but it will almost certainly be different to what you are used to. A $500 holiday in an expensive location means making big compromises, whereas a $500 holiday in an inexpensive location might mean five star luxuries, and you might come back with change.
Putting it all together to correctly evaluate international teaching employment packages
Once you understand all of the aspects, you now have the information you need to accurately evaluate your potential employment package.
Below is an example of how a typical calculation would look
|Representative Calculation Table*||United Kingdom||United States (California)||Kuwait|
|Yearly Pay||£24,000 ($38,750)||$50,000||9600 KD ($33,880)|
|Monthly pay (yearly divided by 12)||£2,000||$4,166||800 KD|
|Bonus payments (yearly divided by 12)||16 KD|
|National Insurance tax/ Social Security Tax, etc||£163||$758||0|
|Council/Real Estate tax||£200||$300||0|
|Cost of rent (monthly)||£500||$800||0|
|EQUALS||£895 ($1450)||$1196||816 KD ($2880)|
|Disposable income (monthly)||$1450||$1196||$2880|
*Each person's calculation will be different. These figures are for illustration purposes only based on an average Edvectus applicant, and each teacher must perform an analysis based on their personal financial situation.