When transferring staff abroad, accurate and reliable information about the cost of living are essential to determine the fairest remuneration for an expatriate.
Among the data used to calculate a remuneration package, the cost of living index is an essential tool proposed by EuroCost International.
Different cost of living indices
Extensive studies carried out by EuroCost International have shown that people living abroad for a prolonged period will modify their habits to suit local conditions. Our knowledge of such behaviour has led us to propose three different kinds of indices: - The Home Based index : It is calculated on the basis of the consumption pattern of the home city. It is usually used for short-term expatriations or for expatriations to countries where lifestyle differs radically from the one in the home country. - The Adapted expenditure index : It takes into account the consumption patterns in both the home and foreign cities. It can be applied without restriction and presents advantages for successive international expatriations since it is the only reversible index. - The Host Based index : It is calculated using the consumption pattern of long-term expatriates. It might be used for very long-term assignments to countries geographically and/or culturally close to the country of origin.
EuroCost International indices are updated every quarter to take into account the price evolution in the different countries as well as exchange rate fluctuations. They are published in March, June, September and December (3 month after price collection). We can also provide interim adjustments based on exchange rate update.
Basket of goods and services
EuroCost International indices are based on a basket of 350 goods and services representative of an expatriate way of living. Those indices are detailed in 11 main groups of expenses:
1. Food 2. Alcoholic beverages, tobacco 3. Clothing and footwear 4. Housing 5. Household equipment 6. Hygiene and health 7. Transport 8. Communication 9. Recreation and culture 10. Restaurant and hotels 11. Miscellaneous
Those 11 groups are split into 40 sub-groups, to provide a deeper analysis of the price differences between locations.
Our indices cover all expenses of a household excluding rent, school and health costs, expenses generally considered apart by companies. We can also provide indices including housing for all those cities where we conduct rent surveys. Housing and school costs are subject to specific services.
Customisation of the index - Specific profile
EuroCost International can adapt its indices to each company or organisation's expatriation policy. This is possible by excluding those expenses a company would not wish to take into account. For example, it is possible to exclude personal transport costs for an expat who would benefit from a company car.
A choice of combinations
A cost of living index is the basis of an expatriation package. It can be used on its own, but we recommend using it in conjunction with our living conditions and rent surveys.
Medium City Index
Our indices per location usually cover large cities and our new medium city index is totally appropriate for cities of a lower size.
Medium city indices are available for the following countries:
- Australia - Brazil - Canada - China - France - Germany - India - Italy - South Africa - Spain - Sweden - Switzerland - The Netherlands - United Kingdom - United States
For China and the USA, we have also introduced a country average large city index.
The cost of living indices are published quarterly and can be customised according to the specific needs of any company.