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If you’ve found yourself wondering what the grass looks like on the other side, then it’s time you brushed up on your expatriate information. Firstly, what is an expat or expatriate? Broadly this can be defined as a person who legally lives and works in a country for which they don’t hold citizenship. This applies to all job sectors and salary bands, whether you are a skilled professional working for a university or a construction worker rebuilding the wall of China.

If you are a South African living abroad, you would know this because good weather and frequent braais are now a distant memory! Just kidding, but the truth is, no country’s climate matches ours by a long shot!

What is an expat?

South African expat

If you’ve found yourself wondering what the grass looks like on the other side, then it’s time you brushed up on your expatriate information. Firstly, what is an expat or expatriate? Broadly this can be defined as a person who legally lives and works in a country for which they don’t hold citizenship. This applies to all job sectors and salary bands, whether you are a skilled professional working for a university or a construction worker rebuilding the wall of China.

If you are a South African living abroad, you would know this because good weather and frequent braais are now a distant memory! Just kidding, but the truth is, no country’s climate matches ours by a long shot!

Do I have to give up my citizenship?

The other way to gain your expat status is to give up your South African citizenship and take on the citizenship of another country. That’s a serious set to take, but let’s be honest, life has a funny way of offering opportunities that require this step, such as family, marriage and career choices.

Is it beneficial to be an expat?

Living and working abroad holds many benefits for Saffas looking to leave the sunny shores of South

Africa. Some of the ‘perks’ of this new lifestyle include:

  • Higher Salaries

Skilled or professional workers often find that taking up a position based abroad provides them with a higher salary. In general, expats earn more offshore than locally, whether self-employed or hired by local businesses.

  • Relocation allowance

Many businesses based abroad provide expats with relocation assistance or a housing allowance. This can be a big drawcard when faced with the high cost of moving country.

  • Career advancement

The South African job market is more challenging than most. Working abroad presents career opportunities that, for many South Africans, would be unattainable.

  • Access to better healthcare

Many countries such as the UK and USA provide free high-quality health care. Expats who are legally living in these countries can access these services provided they pay the necessary taxes, and their residential status is registered correctly.

  • Increased purchase power

The stronger currencies of countries abroad ensure that expats returning to home shores have an increased potential to purchase property or invest.

  • Freedom to live the dream

Meeting new people, experiencing different cultures and seeing life through a different coloured lens is what living as an expat is all about. Life is short, and the world is full of opportunities and places to go; that’s what makes the freedom of living as an expat so desirable for many Saffas.

What are the downsides?

  • Separation from family, friends and culture

It can be challenging to integrate into foreign communities and cultures. In addition, the loneliness felt when far away from the support network of family and friends can be tough and lead to depression.

  • Weather/climate

Many European countries experience dark, cold winters, which can be an alien concept for Saffas used to the all-year sunny climate of South Africa. Unlike home, braai days can be few and far between, depending on which side of the equator you find yourself. Unfortunately, that sun may look warm, but it’s cold – just ask a Saffa who knows!

  • Unfamiliar work environments

Starting a new job is ordinarily difficult, but starting a new position when new to the company and the country can be super stressful. Unfamiliar work environments and cultures can add to the stress of starting a new role, especially when your support network is across the ocean.

  • Emotional strain

Many Saffas relocating abroad for work or other reasons find that transitioning into their new lifestyle can be very lonely. While making new friends is fun and exciting, many people find that integrating into their immediate community takes time. Our friendly South African natures can often be taken as brash or too direct until people get to know us! It’s a roots thing!

What is expatriate tax?

We couldn’t end this article without mentioning the one thing all expats worry about, tax! Unfortunately, just because you work abroad doesn’t mean you automatically don’t pay the taxman his dues. Recent changes to the law mean that expats living abroad are still required to pay South African taxes.

Firstly, you need to determine whether you are a South African tax resident. This term applies to South Africans working abroad who have not gone through the formal tax emigration process. If this applies to you, you are responsible for paying taxes under the new law. However, before you pour yourself a stiff 9 am brandy and coke, the law has some specifics that will determine if your hard-earned cash should be paid to the ever-hungry SARS!

What does the law say?

South African tax residents abroad to pay South African tax of up to 45% of their foreign employment income where it exceeds the threshold of R1.25 million.”

According to Mike Coady, a leader in the financial sector, this may seem like a significant threshold; however, taxpayers should be aware that the law goes on to say the threshold includes the following:

  • Allowances
  • Commissions
  • Bonuses
  • Gratuities

Therefore, it’s easy to see how all of these fringe benefits, including your salary, can quickly add up to the threshold figure!

While living as an expat has its downsides and somewhat scary tax implications, it also has some fantastic benefits. Experiencing the world and all it has to offer requires a leap of faith and a helping hand from FinGlobal, of course! If living as an expat is the life for you, we are here to guide you every step of the way!

Expert advice for SA expats right here at FinGlobal

At FinGlobal, our emigration experts provide a tailor-made service sensitive to your needs and circumstances. Our support and friendly advice can be accessed by expats based abroad and those looking to take that leap of faith into the unknown.

For professional and friendly advice regarding money transfers, tax, pensions and retirement annuities, the FinGlobal team can assist.

To discuss your unique needs with our team, simply get in touch with us. Give us a call on +27 28 312 2764 or send us an email at info@finglobal.com, and we will assist you promptly.