An assignment package covers £56,094 in London. A local contract leaves £35,664.

By Skyler Bissell · August 28, 2026 · 10 min read

In London, a household of four with two earners and two children in care pays £48,474 in rent, £1,620 for the healthcare it buys privately, and £6,000 on flights back to see family. Those three lines are the ones an international assignment package usually absorbs. Together they come to more than the household keeps after everything else, which is why the same job at the same desk can be two completely different financial propositions depending on which contract the letter is written on.

Most people find out which one they have been offered halfway through the paperwork, when a housing allowance appears or fails to. The clauses that decide it are readable in about ten minutes if you know what to look for, and they belong at the front of the process, because the two contracts are priced on different logic and cannot be compared by their base numbers alone.

Five clauses that say which one you hold

Offer letters rarely use the words "assignment" or "local hire" in the first paragraph. These five clauses do the work instead, and any one of them settles the question on its own.

1. The employing entity and the currency. Look at whose name sits above the signature block and which currency the salary is stated in. A US parent company paying you in dollars while you sit in Munich is an assignment. A German GmbH paying you in euros is a local contract. This is the single fastest tell, and it is the one that determines every other clause below, because payroll follows the employing entity.

2. Whether there is an end date. Assignments run for a term, typically two or three years, with an extension clause and a repatriation clause. A local contract has a start date and no end date. If the letter contains the word "repatriation" anywhere, you are reading an assignment, and the allowances in it have the same expiry as the term.

3. Whether housing is a line item. Housing allowance, accommodation support, a rent contribution, a school fee contribution: these appear on assignment letters and almost never on local ones. A local contract expects you to pay for a home out of salary the way every other employee in that office does. The size of that difference is the subject of the next section, and in several cities it is larger than the salary conversation everyone spends their energy on.

4. Whether tax equalisation or hypothetical tax is mentioned. A tax-equalised assignment deducts a hypothetical tax from your pay, set roughly at what you would have paid at home, and the employer then settles the real host-country bill whatever it turns out to be. Your take-home is engineered to feel like home. On a local contract you pay the host country's tax yourself and keep whatever the schedule leaves. This clause is why an assignee moving to a high-tax country often notices nothing on the payslip and a local hire notices everything.

5. Which social insurance system you pay into. An assignee sent temporarily abroad frequently stays in the home country's system instead of joining the host's, via a certificate of coverage issued under a social security agreement. The IRS's page on totalization agreements describes the mechanism for US workers: the certificate is obtained from the home country's social security agency and exempts the worker from the other country's system. Inside the EU the equivalent document is the A1. A local contract has no such document, because you simply join the destination's system like anyone else. Our explainer on how totalization agreements work covers which pairs of countries have one.

Clause five is the one people skim and the one with the longest tail. Contributions into a system are what build a pension record, and in many countries they are also what count toward permanent residence. An arrangement that saves you contributions this year can cost you qualifying time for a decade.

What the package column is worth

Here is the money on the assignment side, priced. Every row is the same household: two earners splitting $280,000, children aged 3 and 6, renting a three-bedroom home, two trips home a year. The first three columns are the cost lines an assignment package conventionally absorbs. The last column puts them against what the same household keeps once every bill is paid, which is the only way to compare a euro figure against a Singapore dollar one.

cityparity engine figures, 2026, on the published family scenario: two earners splitting $280,000 in New York and the local-currency equivalent elsewhere, two children aged 3 and 6, renting three bedrooms, 6% into retirement, two trips home a year. Which lines a package covers is a convention stated here rather than a figure any employer publishes, and real packages differ in both directions. Cities in countries carrying an open item in our tax-accuracy worklist are left out, which is why Zurich, Copenhagen, Vienna, Brussels and Seoul do not appear.

The spread across that last column is the finding. In Berlin an assignment package is a pleasant addition to a household that was going to be comfortable anyway. In London it is worth more than everything the household would otherwise have left, and in New York and San Francisco the gap is wider still. The package is the same package in every row. What changes is the size of the bills it takes over.

Two of those lines explain most of it. Rent in London runs £24,091 above Berlin's for a three-bedroom home on this household's terms, and the healthcare a New York family buys costs $14,828 where Berlin's statutory insurance leaves €1,340. An allowance sized to the first city is a fortune in the second.

None of this prices the one-off money that arrives at the start, which is a separate negotiation with its own tax treatment. What a relocation package includes works through the nine components and what each one delivers after tax, on a single earner rather than a household.

What the local contract carries instead

The assignment column is cash. The local column is entitlement, and it is easy to undervalue because none of it shows up on an offer letter as a number. Same household, same year, priced by the engine.

Same household and same scenario as the table above. The childcare column is what the household pays after subsidy. Statutory vacation is the legal minimum priced at this household's daily gross, and many employers exceed it; the United States column is a truthful zero, since federal law sets no vacation entitlement. The parental leave column prices the full statutory package at the household's income, which the engine applies to gross where several statutes are written against taxable income, so treat it as an order of magnitude rather than a settlement figure.

Read the two tables together and the choice stops being about which number is bigger. Berlin's childcare bill of €1,200 against London's £25,200 is the same fact as Berlin's small covered-lines share: a local contract in Germany does not need a package because the country has already removed the costs a package exists to cover. In London the country removes almost none of them, which is exactly why an assignment there is worth so much and why losing it hurts so specifically.

The statutory vacation column deserves a second look for anyone arriving from the United States. Paris carries €23,231 of legally guaranteed paid time off at this household's day rate against $0 in New York, and an assignment written on American employment terms may not carry it even while you are sitting in Paris. The whole spread is at vacation days by country, and GOV.UK's holiday entitlement guidance sets out the British floor of 28 days for a five-day week, which employers may count bank holidays toward.

The year the assignment ends

Every assignment ends. Some end with repatriation, some with an offer to stay on local terms, and the second one is the moment this article was written for.

Converting to a local contract in London means the £56,094 of covered lines moves onto your own budget on the same day the allowances stop. That money has to come out of net cash, and net cash is what is left after tax, so replacing it takes considerably more than £56,094 of extra salary. The local pay band, meanwhile, was set by the London labour market and has never heard of your assignment allowance schedule.

This is the same cliff that arrives when an inbound tax regime expires, and it catches people the same way: the drop is invisible until the month it lands, and by then the decision has been made. Work out the local salary that keeps you whole before you agree to convert, not after. That number is what our engine computes, and working out the salary you need in a new city shows the arithmetic step by step.

Two other end-of-term items belong on the same page of your notes. Ask whether the repatriation clause guarantees a role at home or only a flight, because those are different promises and the letter usually specifies one of them. And ask what happens to any relocation or completion bonus if you leave inside the clawback window, which on most assignment letters runs a year or two past the payment date.

Which one to take

The honest answer depends on how long you intend to stay, and the two contracts sort cleanly on that one question.

Two or three years, then home. Take the assignment. The covered lines are worth real money in most destinations and enormous money in London, New York or Singapore, tax equalisation removes a whole category of unpleasant surprises, and your pension record at home keeps accruing. Nothing about the local system has time to pay you back.

Open-ended, or you might stay. Take the local contract and negotiate the base hard. Local employment law, local social insurance, local residence clock and the country's statutory entitlements are worth more over five years than any allowance schedule, and they do not expire on a date somebody else controls. Berlin's household above pays €1,200 for care that costs $38,400 in New York, and that gap arrives every year for as long as the children are in it.

You do not know yet. Ask for the local salary figure in writing even if you are taking the assignment. It costs the employer nothing to state, it tells you what the market thinks the job is worth, and it is the number every future conversation about converting will start from. Going into that conversation without it is how a temporary posting becomes a permanent pay cut.

FAQ

Can I ask to switch from an expat package to a local contract?

You can ask, and the request is usually granted more readily in the other direction than people expect, because a local contract is cheaper for the employer. What you should establish before asking is the salary the local entity would write. An assignment salary is set by the home country's pay band and an allowance schedule; a local salary is set by the destination market. Those two numbers are often far apart, and converting one into the other without renegotiating the base is how people end up materially worse off in the same job at the same desk.

Which contract is better for permanent residency or citizenship?

Almost always the local one, and this is the axis people weigh last and regret first. Residence and naturalisation routes are generally built around continuous residence, local employment and contributions into the local social insurance system, and an assignment structured to keep you outside that system can leave years of work counting for nothing toward status. Check the destination's specific rules before signing, because a certificate of coverage that saves you contributions can also cost you qualifying time.

Does an expat package mean I pay no tax in the host country?

No. Tax residence follows where you live and work, and most assignments of any length make you taxable in the host country regardless of who signs the payslip. What a tax-equalised package changes is who bears the bill. Your employer deducts a hypothetical tax roughly equal to what you would have paid at home, then pays the real host-country liability itself. Your take-home stays near its home-country level and the difference, in either direction, belongs to the employer.

What happens to my package if I am made redundant abroad?

This is where the two contracts diverge most sharply and where offer letters are quietest. A local contract puts you inside the destination's employment law, with its notice periods, severance formula and unemployment insurance, and in much of Europe those are considerably stronger than American at-will terms. An assignment usually ends with repatriation to your home country instead of with local protection, and the allowances stop on the date the assignment does. Read the termination and repatriation clauses together, because one defines the other.

Whichever letter lands, the number that settles it is the same one: the salary in the destination that leaves your household where it is today. Our guide to the equivalent salary abroad explains how that figure is built, and New York against London runs this corridor line by line. Run your own household through the engine and compare the answer against both offers before you sign either.

Sources. Social security coverage for workers sent temporarily abroad, including the certificate of coverage: IRS, totalization agreements. UK statutory holiday: GOV.UK, holiday entitlement rights, giving 28 days for a five-day week under the Working Time Regulations 1998. German statutory holiday: BMAS, working hours and leave under the Bundesurlaubsgesetz. English free childcare hours: GOV.UK, free childcare if you are working. Rent, healthcare, childcare, benefit and leave figures are computed by cityparity's per-city engine; per-field provenance is in data/_meta.json. Tax equalisation and hypothetical tax are described as market practice and carry no figure on this page, because no authority publishes a schedule for them.

Equivalent salaries solve for equal net cash after tax, housing, childcare, healthcare and the cash value of statutory benefits, and they are the salary an offer has to clear rather than a salary any employer is obliged to pay. See the methodology.