Mumbai salary & costs questions.

frostman

Hi everyone! I just spent most of the day reading this great forum, and I imagine some of you can give me informed feedback on some questions.

I'm considering moving to Mumbai for a (planned) two-year stint in IT management. The position sounds pretty well commensurate with my experience (~11 years in the biz) and generally looks like it would be a rewarding career move.

HOWEVER, it pretty clearly isn't going to pay anything like what I make in the US and Europe. I'm not too worried about that - if I do this, saving money won't be a high priority. But I don't want to go into debt for the sake of a job either. :-)

So here's the dope: they are offering about 1,200,000 Rs/year plus a package that includes "accommodation in an A grade building" (I assume that means a decent apartment) and some goodies like health insurance, paying for Internet and helping with transportation costs, that sort of thing, plus annual round-trip airfare.

From what I've been able to find on the 'net, it sounds like the salary is pretty much the going rate for that level of job, and the extras probably are normal for foreigners. A sort of interesting twist is that it's not an expat gig in the sense of the Mother Ship beaming you down to India for a while; it's a local company (e-commerce, not outsourcing) wanting for specific reasons to hire a Western internet expert. I have every reason to believe they've done their math and are offering a rate at which a Western foreigner will be comfortable in Mumbai.

The catch is that I have ongoing, non-negotiable costs back in the US that will eat up a good chunk of that salary before it hits my pocket. So in fact I'd be looking at about 60,000 per month plus the benefits.

Some questions:

1) What about taxes? Is it common in this type of situation to just make them go away, or does the company pay that on top of the salary, or what?

2) What other hidden/non-obvious expenses should I consider? (I've read all the posts about people moving to Delhi.)

3) Is it realistic to think about one person for "domestic help" who would be both a cleaner and occasional shopper/errand-assister and speak a little English? I wouldn't need/want a cook, and I've heard I probably wouldn't need a driver.

4) I assume they'll take care of any visa issues, otherwise they wouldn't be approaching foreigners. Is this naive?

5) Are there any issues with sending money *out* of India, eg to the US?

6) Anything else I should consider about this? I'm excited about the opportunity but definitely wouldn't do it if I had to significantly downgrade my lifestyle or actually lose money.

Lifestyle: I'm semi-single but might bring someone along; I tend to go out a lot (pubs more than clubs) but if I take this job I'd probably be too busy to go out more than 3 nights a week; I eat in restaurants more than at home but not expensive ones, just good bistro-type places; I'm into the arts and much more likely to go to an exhibition than to a concert; I'm materialistic as Hell in terms of spending money enjoying life, but I rarely buy things I can't eat or drink... in my mid-30's, know some Indians but never been there, fairly Bohemian but definitely not Hippie (no disrespect, just not my thing), etc etc.

I have a friend in Mumbai whose brain I've picked about a lot of things already, but he works in a totally different industry (film) and isn't really a normal expat (married locally), so I'm hoping some of you can give me some good tips for consideration before I get into negotiations with this company.

Again, my research shows that their offer is very fair; I'm just trying to figure out whether I can live well on it. (And they haven't offered me the job yet, they've just expressed interest, but I think I'd have a very good shot at it if I want it.)

Thanks in advance. Sorry if this got a little long.

Nick-H

Welcome to IndiaMike!

Your post may be long[ish] but it is very interesting, and, I'm sure the answers will be too. Insofar as I can speak for anybody else (can't really ) we'd much rather see a list of good questions than a one-liner, "I'm going somewhere to do something what do I need to know?" Yep! Some people even forget what a big place India is

Looks like you've got a chance of a lifetime there: congratulations and I hope it works out for you.

As a longish-term visitor I'd say that it is qute hard to spend R2000 a day! (But I am in a much cheaper city...) and that you should have a great lifestyle.

I'd expect that you will have to apply for your visa in your home country, your employers providing the necessary backup documentation.

The Reserve Bank of India rules on repatriating cash etc areHere
At least I think the money stuff is in there somewhere, people usually want this site for property-owning regs.

Once again, welcome. Somone better informed than me should be along in a minute. Well, maybe an Indian minute...

deepsesame

Welcome to Mumbai!
I've tried to answer your questions to the best of my knowledge:

1) What about taxes? Is it common in this type of situation to just make them go away, or does the company pay that on top of the salary, or what?
--Normally When you are earning beyond 500,000,There is no tax excemption available directly.The tax will be deducted at source.
2) What other hidden/non-obvious expenses should I consider? (I've read all the posts about people moving to Delhi.)
--I would say mumbai is a pretty foreigner friendly city.You have the best public transport here,the best in india i.e be it cabs/rickshaws..I figure with the fat pay packet you are getting u wont need to take a bus or a train.You can think of buying a car too,if it suits you,but u'd be totally frustrated driving along the roads of mumbai,let me warn you..the traffic jams here and the pollution will test your patience tremendously--but then again it depends on which area of the city u live in.

3) Is it realistic to think about one person for "domestic help" who would be both a cleaner and occasional shopper/errand-assister and speak a little English? I wouldn't need/want a cook, and I've heard I probably wouldn't need a driver.
I figure it would be pretty easy to get a domestic hire,at a pretty decent rate as well--Just talk to the people who are fixing your apartment.they should be able to help you.

4) I assume they'll take care of any visa issues, otherwise they wouldn't be approaching foreigners. Is this naive?--You better clarify with your employers that they are doing your visa.Its better to have it in writing that they are sponsoring your visa.

5) Are there any issues with sending money *out* of India, eg to the US?
I think there is an upper limit on the amount of money that can be sent out of india at one shot.Not sure abt the amount though.

6) Anything else I should consider about this? I'm excited about the opportunity but definitely wouldn't do it if I had to significantly downgrade my lifestyle or actually lose money.
Mumbai is a great city if you come here with an open mind.The people are extremely friendly--You will have lots of reasons to party and enjoy..Specially if you have friends in the film industry.This is a city of contrasts.You will find the richest of the rich and the poorest of the poor..You will find beautiful buildings,exquisite malls and dirty slums,ramshackled houses..All along the same city.
There are quite a few pubs,many fancy restaurants,few art galleries,If you are the adventurous sort,you should be able to find quite a lot of things here to explore.
While you are here,Enjoy your experience,The city will teach you how to live every moment of life like there's no tomorrow!
All the best!.

Lifestyle: I'm semi-single but might bring someone along; I tend to go out a lot (pubs more than clubs) but if I take this job I'd probably be too busy to go out more than 3 nights a week; I eat in restaurants more than at home but not expensive ones, just good bistro-type places; I'm into the arts and much more likely to go to an exhibition than to a concert; I'm materialistic as Hell in terms of spending money enjoying life, but I rarely buy things I can't eat or drink... in my mid-30's, know some Indians but never been there, fairly Bohemian but definitely not Hippie (no disrespect, just not my thing), etc etc.

I have a friend in Mumbai whose brain I've picked about a lot of things already, but he works in a totally different industry (film) and isn't really a normal expat (married locally), so I'm hoping some of you can give me some good tips for consideration before I get into negotiations with this company.

Again, my research shows that their offer is very fair; I'm just trying to figure out whether I can live well on it. (And they haven't offered me the job yet, they've just expressed interest, but I think I'd have a very good shot at it if I want it.)

Thanks in advance. Sorry if this got a little long

GoanCanuck

>> plus a package that includes "accommodation in an A grade building" (I assume that means a decent apartment) <<


Make sure that you have a look at this A-grade apartment that this company is offering you. A fully furnished 2 bedroom apartment in this category is very very expensive in Mumbai. The cost will be around Rupees 50,000-75,000/month depending on the locality. Most of the time you are promised one thing but you end up with much less.

donkey

as for lifestyle - i.e pubs. clubs, food, art exhibitions, galleries, events, shopping.. Mumbai rocks. it is a fantatsic place to have a bit of money to spend on enjoying yourself and there is LOADS to do. Time Out magazine arrived in Mumbai a while ago and it is packed full of great events, clubs, new restaurants, book review, art exhibitions (there are hundreds of art galleries in Mumbai) etc etc..

your salary is excellent, especially if your accoodation is paid for.. but yes do check it out first.. maybe your friend could do that for you?

other stuff..
domestic help is normal and cheap. around 1500rupees a month for 4 - 7 days a week.

if you are getting a car get a driver. do NOT bother driving yourself - too much stress, when drivers are SO cheap - 3000 - 5000rups a month. its just not worth it.
will your accomodation be close to work? if so, just rely on taxis ..there are loads and they are cheap as..

find out where your company and accomodation will be - you dont want to be stuck out in the middle of nowhere, and that could affect whether you get a car or not.

hope that helps some
michaela

rohan5577

Everything else sounds good, but in a city like Mumbai, expect the rent for your accomodation to be a sizeable proportion of your salary. As GoanCanuck rightly says accomodation in an A grade apartment would be expensive. On the other hand A grade in Mumbai is very plush and extravagant at least as far as the interiors are concerned. If you are okay with a decent enough place to live, then this offer looks good.

__________________
You can take a man out of India, but you can never take India out of a man!

phantom

Frostman, One thing you did not specify is how much money you will be sending out of India p.m. If we look at your figures of 60,000 pm then is it that you will be sending around 30000 back. ?? In that case. Considering the taxes (30% + 5% surcharge) u r looking at a figure of somewhere around 15000/- pm (taxes 30000 approx. + Provident Fund/Medical insurance/Other benefits 15000/- approx + Money sent back home, 30000/-) coming in your hand.
Now, 15,000/- pm is not quite a big money. Considering you are getting an apartment and transportation, you will be ok but never be extravagant. So just check your numbers again.

frostman

It actually sounds like it's unfurnished - one of the benefits is money to furnish the apartment. After reading the other threads here I'm guessing that means more than just buying furniture.

If things actually progress that far then I definitely would have my friend OK or nix the location and/or building, he knows the founder of the company and recommended me for the job, so I think that would be a normal enough process. From all I've heard and read, I gather that in India business is a lot smoother when there are personal connections - just like Hungary.

Sorry, I should have clarified. I don't drive at all, not even in laid-back California. I don't think I'd need a car+driver... My friend who lives there thought that, considering my lifestyle (don't do much shopping, don't have any kids, often out late when the driver would be off duty anyway, etc) I'd do just as well to take a lot of taxis.

For getting to work it seems the company would help pay for that, and I'd probably try to live close to the things I like to do when not working. I spent long enough in California that commuting doesn't bother me, but I do like to be within walking distance of good cafes and night life. I always figure I can pay to get across town if I need to, but it's a really nice feeling to just stumble out of bed and be somewhere fun within ten minutes. If I do this I plan to rely a lot on my local connections for questions of location.

Thanks for the great responses everyone; I'm sure I'll think of more questions soon.

Oh, here's one already: if the company is covering the apartment, what size and amenities would be normal?

As I mentioned before, it looks like they're offering a good local salary plus these extras to make it work for a foreigner; do you think that's more likely to mean 3 rooms and a balcony/terrace, or 2 rooms, or what?

Thanks.

GoanCanuck

Most likely it would be a drawing room, bedroom, bathroom and kitchen with a balcony.

gs_uppal

12 lakhs for 11yrs experience is slightly on the lower side if the co. is looking abroad for candidates, i'd say.
For Cos working here in India, u have to do a lot of hard bargaining, try to do some and ask for 20-25% more than this.
Out of your 12 lakhs, almost 30% will go away in tax, and thats deducted by the company while paying you your salary and deposited with the govt in banks income tax a/c.
So deduct that and you just have 8.5 lakhs odd in hand.
Take a perfect breakup of salary. If the salary has Providend Fund included in that, then 24 % of your basic salary (part shown as BASIC SALARY, others are house rent allowance, other allowances, transport etc.) will go in PF account, this is a kindof saving which you can carry forward in india in your next co. or you can withdraw it on leaving a job (has a higher rate of interest than any bank deposit 9.5% at present pa).
Then make sure Gratuity is not included in the salary, some companies have a method called Cost to Company and Gratuity is included in that, ( Gratuity @ 15% of basic is given to an employ only if he serves for 5 years or more).
make sure of the exact breakup and ask for the "Take Home Salary" that you'll get post Taxes and Deductions.
Mumbai is a costly city and check whats the distance between your workplace and the place where they are providing you with accomodation and the locality where they are providing you with accom.
Shouldnt be that you have to spend 3 hours a day in traffic moving from western suburbs to town and getting stuck in traffic jams.
Restaurants in Mumbai are costlier than other cities by 20-25%.

GoanCanuck

>> For getting to work it seems the company would help pay for that, and I'd probably try to live close to the things I like to do when not working. I spent long enough in California that commuting doesn't bother me, but I do like to be within walking distance of good cafes and night life. I always figure I can pay to get across town if I need to, but it's a really nice feeling to just stumble out of bed and be somewhere fun within ten minutes. If I do this I plan to rely a lot on my local connections for questions of location. <<


For this type of a requirement, I would advise you to find a place in Colaba or Bandra(West). The only problem is that both these places are VERY expensive to rent.

frostman

Thanks Phantom. That's sort of the crux of my financial consideration - taxes and my other obligations.

If I take your figure of 35% for taxes (but what's the 5% surcharge?) then I end up seeing something close to 30,000 Rs in hand after taxes and my other obligations. That doesn't sound like much considering the prices I've seen online.

Are the taxes really unavoidably that high?

For example, here in Hungary a lot of people get part of their salary on the books and part off (if they're working in young dynamic companies, which this is). That's technically illegal but very common.

I might be able to juggle the amount I need to send home, but I think it'll still end up in the 500-700 Euro range, which works out to 27000-38000 Rs so your estimate was very smart.

Obviously that's a lot more as a percentage of net income than it would be in Europe or the US.

What is Provident Fund? The company offers medical insurance.

Paagla Dashu

The surcharge is payable on the tax and not the income which makes the effective tax rate 31.5%.

You should negotiate a tax-paid salary (employer grossing up the income to guarantee an amount net of tax in your hand) and the emloyer should handle all the tax formalities. Also negotiate full medical coverage.

frostman

Great info, thanks. So that's the Provident Fund.

I have the company's address so I can check out the location.

Actually I think both the location and size/style of the apartment shouldn't be major considerations, ie should be pretty easy to work out.

The money is rather the sticking point, and indeed it may be smart to try to bargain up. In the summary they sent me they stated a range of 12-14 lakhs and I've been using the low end for my calculations.

phantom

The web definition of Provident Fund is -- "A fund paying benefits to the company employees who are fund members upon the termination of their employment. Contributions paid into the fund by both the employees and the employer are invested in accordance with the pre-determined condition of amount and risks."

A percentage of your base salary, as specified by the company laws, is held back by the employer in a Fund. Generally the employer will also contribute the same amount to that fund. e.g. if your PF is 5000 pm then your employer will also be contributing 5000 pm to that fund. And that whole amount, if taken up on maturity(when you are retired), is tax free. You can also take it earlier but then you will have to pay tax on that. Also AFAIK the medical insurance that you mentioned covers any hospitalization charges of more than 24 hrs. It doesnt cover the normal consultation fees that doesnt involve hospitalization. Generally the companies keep a separate amount something like 10000-20000 annually for that and you can claim it with your bills and that amount is also tax free.

I hope I am not confusing you. Dont forget to ask your employer for the breakup of your salary and an explanation of every component mentioned in that break-up.

BTW, Welcome to India