Housing allowance - % of total salary?

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Housing allowance - % of total salary?


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Old 23rd February 2009, 10:00 AM
 
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Default Housing allowance - % of total salary?

After I decided to move there myself, my company offered me a short term contract to set up an office for them in Dubai - we are currently negotiating the terms of this and am wondering how much I should ask for as housing allowace?

I am looking for a common % of total salary - they will not cover it all. Thanks.

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Old 23rd February 2009, 10:10 AM
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There is no standard percentage when it comes to housing allowances. I suggest you establish how much you are likely to need for rent and then work from that figure.

The figures will vary hugely depending on the company, position and salary. Many companies prefer to pay allowances instead of salary as it saves them money on paying gratuities.


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Old 23rd February 2009, 11:42 AM
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My company work on a standard of 40% of the total package being the housing and car allowance so if you have a total package of 50k AED , 30k is salary and 20k is for your car and accommodation. Depending on your priorities, you may end up spending 2-2.5k on a car and putting the rest towards housing.

HTH

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Old 23rd February 2009, 03:38 PM
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ideally it should be around 30%... but companies, so as not to pay higher gratuity, make it a point to raise the percentage of allowance vis a vis the whole package...

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Old 5th March 2013, 11:10 PM
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I was offered a starting salary of 22k however the fine print details it as:
salary: 15,750
accomm allowance: 5000
travel allowance: 1250

They say this is paid in arrears on the last day of the month.

As I'm not familiar with this sort of arrangement, I'm not entirely sure how to interpret this (in terms of value). A 22k base sounds great...and that's what I was 'sold' on but now it's being broken down into base plus allowances. Dumb question: Am I still getting a decent deal?

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Old 6th March 2013, 03:13 AM
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Quote:
Originally Posted by jk_1337 View Post
I was offered a starting salary of 22k however the fine print details it as:
salary: 15,750
accomm allowance: 5000
travel allowance: 1250

They say this is paid in arrears on the last day of the month.

As I'm not familiar with this sort of arrangement, I'm not entirely sure how to interpret this (in terms of value). A 22k base sounds great...and that's what I was 'sold' on but now it's being broken down into base plus allowances. Dumb question: Am I still getting a decent deal?
regardless of whether this is a good deal for the position, there is really only one figure that matters - the total sum.

the primary reason it is split into salary and allowances, as said above, is to reduce the Companies exposure to end of service gratuity, which is based on salary alone.
you have 28% allowances. This is a lower percentage than some (up to 40%) so, in a way, you are better off than some - when you leave.

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Old 6th March 2013, 03:21 AM
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ah, thanks for that vantage - makes more sense now!

wasn't aware of the 'implications' for firms re: end of service gratuities - very interesting.

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Old 6th March 2013, 06:48 AM
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Quote:
Originally Posted by vantage View Post
regardless of whether this is a good deal for the position, there is really only one figure that matters - the total sum.
in many cases you may be absolutely correct however, if the OP works for a company with global positions and is coming here on a limited assignment [or has designs to move on to another position/country after dubai] and then could be sent elsewhere, the OP may want to make distinction on exactly what his salary is vs. the extra allowances to be sure that the salary alone would still be sufficient if he were to move on to a position in another country where it is not common to receive the allowances we do here. at that point his employer may drastically reduce his perceived salary when compared to his "total sum" for dubai because he will only be paid his base without allowance.

another thing to consider, if this new offer is in effect a promotion from his current position he may want to ensure they are giving him the proper bump in salary instead of trying to get him to accept allowances as a raise which could then potentially be taken away under future circumstances.

and yes, there is also the end of service package [based on salary] that should be considered.

admittedly, i know not much of the corporate world, i speak from our experience alone, but it may be something for some to consider.

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Old 29th March 2013, 08:29 PM
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Quote:
Originally Posted by jaanaq View Post
After I decided to move there myself, my company offered me a short term contract to set up an office for them in Dubai - we are currently negotiating the terms of this and am wondering how much I should ask for as housing allowace?

I am looking for a common % of total salary - they will not cover it all. Thanks.
You should check websites like JustRentals.com and PropertyFinder.ae in order to know how much is a rental here.

It is standard that the compensation package should include housing allowance, but not by % of the salary. Based on the short description of your project and responsibilities, you should ask for a minimum AED 120 thousand housing allowance for 1 year, or half for six months. Another option is that, if you are only staying 6 months, ask for a flat or residence-hotel.

In my opinion, in the UAE, housing allowance should not be negotiated as a part of your salary offer.

Hope I could help!

Cheers,

Global Citizen BR

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Old 30th March 2013, 11:00 AM
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Quote:
Originally Posted by sammylou View Post
[or has designs to move on to another position/country after dubai] and then could be sent elsewhere, the OP may want to make distinction on exactly what his salary is vs. the extra allowances to be sure that the salary alone would still be sufficient if he were to move on to a position in another country where it is not common to receive the allowances we do here.
That's a very important point to consider indeed.

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