Assessing a job offer

So how do you know whether your salary and allowance package is high enough?  Here's the short answer:

Market research and analysis of your own situation.

It's amazing to me how many people don't do either one of these.  Instead, they post multiple messages on expat forums asking whether their offer is "good enough."  Sometimes I just want to smack them.

For starters, the market research isn't that difficult, particularly when you consider that the three major English-language periodicals (Gulf News, The National, and The Khaleej Times) regularly report on the rental situation in Abu Dhabi.  If those articles don't supply enough information, run a Google search using the words real estate Abu Dhabi.  I betcha a dirham that the top hit will be www.propertyfinder.ae.  It might not include everything on the market, but it will give you an excellent idea on the general prices in different areas around Abu Dhabi.  Finally, contact a few real estate agents.  Tell them your budget and ask them what's available.  If you pester them enough, they will eventually respond.  (Note for etymology buffs:  eventually comes from the Arabic maybeoneofthesedaysormaybenot.)  Once you've done this research, pick something you think is suitable and write down how much it costs. Let's call this HOUSING.

Now for the tricky part.

Look at your job offer.  The whole package, not just the salary.  Just add all the numbers together -- base salary, housing allowance, furniture allowance, school allowance, etc.  Since money is fungible, it really doesn't matter what the individual amounts are.  Write down that sum and call it INCOME.

Subtract HOUSING from INCOME.  This is what you will have left to live on after you've shelled out all the money in the world for one year's worth of rent.  (hint:  if it's a negative number, stop reading here and stay wherever you are currently living)

If it's a positive number, we need to do a little more work, because you'll still need money to live on.  How much you need depends on your personal situation.  If you have children, count on Dhs 30,000 a year (or more) to send each one to school.  Factor in the expense of a car, as you'll need one in Abu Dhabi.  Remember that you'll likely need to buy all of your major appliances.  Decide whether you'll be shipping your household effects over or buying them locally -- either way, it's an expense.  Don't forget utilities and food and anything else that you regularly spend money on.  Add all of these numbers together and call the sum LIVING EXPENSES.

I hope you see where this is going.  If you don't, it's probably because you missed that third-grade lesson on word problems.

The sad reality is that some offers just aren't good enough.  And the situation darkens for US citizens because the US is one of the very few countries that taxes based on citizenship not residence.  And the basis for US income tax is all of one's compensation.  That means pretty much anything and everything an employer pays -- whatever they choose to call it.  Yes, there are exclusions for non-US residents, and I'll write about them in another post.  But in the meantime, keep in mind that moving to a tax-free country like the UAE doesn't mean one won't pay any taxes.

So how did we end up deciding whether or not our offers were good enough to justify moving halfway across the world?  Well, fortunately, I spent my early adulthood learning how to do financial analysis from two graduates of a usual-top-ten MBA program.  And I have a really good friend called Ms. Excel, who painstakingly calculated the net we'd be pocketing under several different scenarios (okay, so I had to give her the numbers).  This took a lot more time than looking for advice on the internet, but it was the better choice.

Because advice, as we all know, is pretty much worth what you pay for it.