How NOT to save money when working as an international school teacher #7: Earn a Salary in a Currency Which is Losing Value
October 15, 2015
We all hear about the big possibility of saving money while working at international schools, but the reality is that many of us don’t save much of any money. So, why aren’t these international school teachers saving money?
How NOT to save money when working as an international school teacher #7 – Earn a Salary in a Currency Which is Losing Value
Five years ago many international school teachers (those earning their salaries in their host country’s currency) were doing quite well with their monthly paychecks. But because of the rising value of the USD in the last year, these teachers’ salaries are in despair.
Month after month, teachers earning in a currency that is losing its strength (when compared to USD for example) have been seeing their once really nice monthly paycheck go south. Each time these teachers have to transfer some of their money earned back to their home country (maybe 3-4 times a year for some teachers), the actual amount received gets lower and lower; even though it was the same amount transferred each time. These international school teachers need to figure out another way to pay off their mortgage, student loans, etc. and fast! The other choice is to make it your last year at your current school and plan to find a job at another international school in a different country; earning in a different currency.
But some of us are doing alright in this recent “rise of the USD.” There are a number of international school teachers that pay their staff in USD. A number of countries have a local currency that is just not stable enough for foreign hires, and the school prefers to just pay their staff in a currency that is more stable and secure. Additionally, many currencies are tied to the USD. For example, Hong Kong Dollars are connected to the USD. Click here for a list of currencies around the world and which specific currency they are tied to.
So, for international school teachers working in Hong Kong, making HKD, they are still on the right track to achieve their savings goal this year.
There are also some international school teachers earning multiple currencies, at one school. The British School Caracas and Seoul International School do just that (as well as a number of other international schools around the world). Part of your salary is paid in your home country currency and automatically transferred/deposited into your home country bank account, while the other part of your monthly salary is directly deposited into your host country bank account. Teachers in this situation seem to have all their based covered then. Unless, of course, both your home currency and host-country currency plummet!
We do have a comment topic on our website related to the theme of how international school teachers get paid at their school (and in what currency). It is in the benefits section of the comments and information tab on the school profile pages. It is called: Average monthly salary after taxes and in what currency (explain taxation situation). How often do you get paid throughout the year?
“It is important to note that you are getting paid 100% in local currency. Because the USD is gaining strength and continuing to do so, the salaries here are getting considerably less attractive (meaning you are not making USD 100K a year anymore as the previous comment states). Some teachers have a part in their contract that helps to alleviate some of this difference in exchange rate, but others don’t. The ones that do are getting like 25% of their salary paid at a better exchange rate. It is kind of random, but the board thinks that American teachers here might be spending around 25% of their salary in the USA or in USD. Of course, this is creating a bit of controversy.” – Graded School Sao Paulo (Sao Paulo, Brazil) – 39 Comments
“The previous comment is off on the current tax rates. It is now up to 23%, and slated to rise further in the coming year. Japan is no longer a place to work and make enough to save significant amounts. This is especially true for couples and doubly so if you have children. It’s a shame as raising children here leaves wonderful impressions on them, and it is amazingly safe.” – Seisen International School (Tokyo, Japan) – 51 Comments
“10 years of teaching with a masters plus 30 units will get you about 55,000 USD. No tax. Upon departure, the Korean government pays you about 4,000 dollars for each year of occupancy for US citizens, it is some tax exemption agreement between countries. There is also an 8.5% bonus for each year of teaching that accrues interest and is relinquished upon departure.” – Seoul Foreign School (Seoul, South Korea) – 73 Comments
“We get paid every month, around the middle of the month. June and July pay are both given before the end of the school year. We can choose how much of our pay we would like to receive locally and how much we would like to have transferred to our home country. We get paid in dollars, and are guaranteed salaries after taxes. For 2015-16 the maximum salary is $54,111 (Masters with 24 years experience, an extra $1500 for PhD), minimum is $35,390 (Bachelors 1 year experience). In addition to this is a 13% pension. There is also a possible longevity bonus and re-signing bonus.” – International School of Tanganyika (Dar es salaam, Tanzania) – 141 Comments