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Spain is a country many expats like to work in. The country side and city life may be two different environments but one thing they both share is a rich culture. There are plenty of reasons why someone who enjoys a career working overseas would choose Spain as a place to live but I am going to cover what you need to expect when it comes to the cost of living if you choose to live there. Many places around the world are great places for an expat to work in and like those countries Spain has a cost associated with living there. If you want to enjoy your time in a new country you need to know as much about that country as you can before you take a job there. Knowing what to expect ahead of time financially can greatly improve your overseas experience. The first thing you want to find out is how much taxes you will be liable for so you know how much net income you will have to pay for your living expenses. WorldWide-Tax.com shows that Spain has a 24% to 43% tax on Individual Income. You will need to find out what tax bracket your salary will fall into. You will also want to find out if there are any exemptions you can take as an Expat. Knowing how much you will be taxed by your home country is important too. Many countries do not tax there expats but places like the U.S. only allow their expats to exclude so much of their pay check a year. Once you know what your net income will be you can than look at the prices of apartments in the area in Spain you plan to work in along with other cost of living expenses.
Apartment Prices
Two Cities from Spain, Barcelona and Madrid, were shown on the UBS prices and Earnings report for 2009. Barcelona had a wider range of prices associated with apartments with the more expensive furnished four room apartments being about $850 more than the same kind of apartment in Madrid. When it comes to the medium priced apartments and the cheaper apartments Barcelona and Madrid were pretty close to one another. A furnished four room apartment in Barcelona will run you between $3,790 to $1,280 while a furnished four room apartment in Madrid will run you between $2,940 and $1,410. Barcelona may have the most expensive apartments in that range but it also has the cheapest apartments on the lower end of the scale. When it comes to an unfurnished three room apartment in Barcelona expect to pay between $2,160 and $1,020 while in Madrid you will pay between $2,090 and $980 a month.
Food Prices
Food prices in Barcelona and Madrid are very close to one another with Barcelona placing number 25 and Madrid placing at 26 on the list of 73 cities polled on the UBS prices and earnings report for 2009. The higher place number the more expensive groceries are in that city on the list. Barcelona may only be a little more pricy when it comes to groceries but after a full year of grocery shopping it can add up to a lot of cash out of your pocket. If you are from a place comparable to the prices in New York, Hong Kong, Paris, Singapore, and Seoul you will find Madrid will be noticeably cheaper when it comes to buying your groceries.
Transportation Costs
Buying your own car while you are in Spain may be something you have to do if a company vehicle does not come with your new job in Spain. The UBS report showed the cost of a popular car in both Barcelona and Madrid. The Citroen C4 2HDI that runs about $39,900 (tax included) is a popular car in Barcelona but the Opel Astra 1.9 is the more popular car in Madrid and it will run you about $19,500. If you stay away from the more popular cars in an area you will probably find a better deal and spend less on your wheels than others do. If you live in Barcelona and all ells fails see if you can just go to Madrid and buy a car there. You will be looking at an annual cost either in tax form are registration costs of about $137 in Barcelona and $118 in Madrid. Gas prices are slightly higher in Madrid at $1.29 where in Barcelona you will be able buy a liter of gas for around $1.25.
Another transportation option is the public form. If you choose this route Barcelona would cost you about $1.77 for a 10km pass or at least 10 stops on a bus, tram or metro were a ticket in Madrid would run you only $1.31 for the same kind of pass. Taxi’s cost about $11.53 for a 5 Km ride within city limits in Barcelona and coming out cheaper again Madrid only costs about $11.33 for the same kind of trip. Barcelona though is cheaper than Madrid when it comes to a second class train ticket that will take you about 200Km. The cost of a second class train ticket for 200Km in Barcelona will cost you $36.57 where in Madrid you will pay $37.26. If you choose to live further away form the city because of cheaper costs remember it may be harder to find some form of public transportation and buying your own vehicle may be your only option for transportation.
Electronics and Appliances
When it comes to buying electronics or appliances unless you live in Shanghai, Bucharest, Doha, Santiago de Chile, Sofia, Bogota, Jakarta or Mumbai wait until you get to Spain and buy your Electronics in Barcelona. Of the 73 Cities pulled by UBS Barcelona was the ninth cheapest city to buy electronics in. When you are buying electronics in a country other than your home country you will want to make sure that it works on both your home countries voltage and in Spain that is if you plan on taking the equipment back to your home country with you. I like to try to always buy duel voltage electronics so when I move to a new country I have less to worry about. If your new job is in Madrid take a trip to Barcelona for your electronics, it is that much cheaper there.
Wages
The average gross wage in Barcelona and Madrid is about $14.40 but in Madrid you will net about $11.90 and in Barcelona you will net only $11.60. If you plan on working in a country I always recommend taking a job that is much higher than the areas average wage. If a company wants you enough to get you a working visa you should be getting a decent amount over the average wage for that area. This of course depends on your back ground. The more demand there is for your skill set the more money you will be able to make. It is always best to apply for many different jobs in many different countries to see what you can get. The more job offers you have the more leverage you have in negotiations.
Advice from an Expat
If you are taking an overseas job you will want to know if you are eligible for company housing or a cost of living allowance. If you get company housing there may be a company car that you qualify for as well. Sometimes these companies will not offer either of these from the begging you will have to ask for them. If they make you an offer ask them if you can talk to a current employee over there about the tax situation so someone who has been there can tell you were they looked for tax advice. Find out as much information as you can about living over there. The more information you have the more prepared you will be if you decide to make the move. Don’t worry about asking to many questions because a company that hires a person to fill an overseas position wants that person to stay there as long as the job needs to be filled. They want to make sure there new hire knows what to expect. This is because hiring someone for overseas positions costs money and they have probably already experienced someone coming to work for them and quitting just a few months later because they did not know what to expect when they got there. Every time I was hired for an overseas position or even transferred to a new location with a company they were more than helpful answering my questions or directing me to someone who could.
If you are an expat and want to work overseas you can find jobs in Spain on the Job Search Page.
Barcelona and Madrid (prices between March – April 2009)
Prices are in USD
Prices are from the UBS Prices and Earnings 2009 report. The UBS Prices and Earnings Reports are something we recomend all expats to take a look at. It is full of great information on the cost of living in variouse cities around the world. The cities that they cover give you a good base line for the cost of living in different areas around the world.
Tax rates from www.worldwide-tax.com
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