So your British company has offered you a dream job in Australia? Congratulations. Now you need to negotiate your relocation package. It is essential to be objective in doing this and while you do not want to alienate your employer, nor do you want to find yourself in a difficult situation after arriving in Australia.
The following gives an overview of what you should expect from a top-class relocation package. If you choose to accept less, it's up to you. But it is reasonable for a time limited assignment overseas. As an expatriate, you are normally expected to perform at a high level and your employment contract and terms should reflect this.
One of the most important issues you and your employer need to consider is whether the assignment is temporary or permanent. It makes a huge difference to the relocation package, not least visas.
Bear in mind that usually, expatriates do not remain indefinitely in one location and normally after 4-5 years if you do not move on, then you are expected to "go permanent" and convert your contract to one that is the same as a local employee at the same level.
- Business class air tickets for all family members.
- Fully insured shipping of household goods.
- A cash allowance (1-2 months salary, depending on salary and family size) to cover "incidental" expenses of moving.
- Furnished accommodation on arrival for 2-3 months, while you wait for your goods to arrive and find somewhere more permanent. It would be reasonable to contribute something towards this, but not full cost.
- Many companies employ relocation professionals to aid expatriates through the "bureaucracy" of the early days, obtaining driving licences, etc.
- Many employers, particularly international corporations, will see the transfer as temporary initially.
- Hence they will sponsor for a temporary visa, usually a temporary 457 visa.
- If the intention is for the move to be permanent, then they should sponsor for a permanent visa. (check to see if you qualify).
- Employer should cover all visa costs, including professional assistance.
- If the job ends, they should repatriate you to the United Kingdom on the same basis as above.
- Will your "home" organisation in the United Kingdom have a job available for you? And if not, is there a commitment to at least pay severance?
- Good repatriation provisions in your contract are a strong incentive for employer to sponsor for permanent residence, if that is what you want. Normally, once you are permanent residents, repatriation commitments disappear.
Medical Insurance (Temporary visas only)
- The employer should cover full medical insurance for all family members.
- Reciprocal Medicare coverage, even if you are eligible, is not enough.
Education costs (Temporary visas only)
- In some states, notably NSW and ACT, temporary residents pay fees (around A$5k per child) to send children to government schools.
- Older children will face international fees for tertiary education
- Employer should cover these costs.
- Or would there be an intention to send children to private schools, possibly following an international curriculum?
- Also bear in mind that if your children return to the United Kingdom, as non-residents they may be liable for overseas university fees, even as British citizens.
Vacation and home leave
- Employer should pay for flights home for family members for duration of assignment, every 1-2 years, again business class. As a minimum, you should be allowed to visit your home company every year to network.
- Additionally, emergency travel home in case of death or illness of a close relative should be covered.
- Normally, vacation allowance while on assignment should be based on the greater of your existing allowance, and the norm in Australia.
- Most companies expect expatriates on assignment in Australia to rent property, rather than purchase.
- Will they assist in providing rental references, etc?
- Usually, they only want people to buy property when their stay has become permanent.
- If you sell your home in the United Kingdom, what happens if house prices rise significantly when you are away?
Salary and benefits package
- As a minimum, your salary and benefits package in Australia should be worth at least as much as you have in the United Kingdom.
- The structure of your package may be different. You may not get a company car, but you may get more cash, or vice versa.
- What currency is your package calculated in? What happens if exchange rates change significantly?
- When you return to your "home" company, is there a pre-set formula to calculate the salary at which you return?
- If your spouse can no longer follow a career (eg if qualifications are not recognised), have you taken this into account?
- When you compare your salary and benefits, you should look at figures net of tax.
- What would happen if tax rates changed significantly?
- You may still have a United Kingdom tax liability (especially on rental or investment income) and if so, it may need to offset against Australian tax, especially if you are a permanent resident.
- Employer should settle tax on all relocation related costs through "gross-up" - this is complex, but important.
- Tax advice, and tax preparation services, both in the United Kingdom and Australia, should be provided at employer's cost.
- Bear in mind that if you get a permanent visa, or if you are an Australian citizen, you are fully exposed to the Australian income and capital gains tax system. Temporary visa holders get some significant tax breaks related to non-Australian income.
Pension and Social Security
- If you have a British company pension, do you keep paying into it or not? Will it be "frozen" and if so, do you lose out?
- Or will you be expected to pay into the Australian pension (superannuation) scheme?
- Do you make voluntary National Insurance contributions or not?
- Bear in mind that there is no Social Security Agreement between Britain and Australia.
- If you pay into an Australian pension, you can withdraw contributions before retirement only if you were a temporary resident.
- If the move is permanent, can you transfer your pension to Australia? Do you even want to?
- Bottom line is that employer should pay for professional advice and assistance.
Work for spouse and children
- If on a temporary visa, your spouse will have work rights but may find it hard to obtain permanent employment due to the temporary status.
- Children theoretically have work rights, but those aged 18 or over cannot work anything other than incidentally due to the risk of losing dependence on parents for new visas.
- Employer may pay for cross-cultural training.
- Will the employer pay the costs for you and your spouse, if necessary to convert your professional or trade qualifications?
- They should normally allow the employee and spouse to visit Australia in advance before committing to the assignment.