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Indexes of Living Costs Abroad Quarters Allowances, and Hardship Differentials April 1998 |
This report contains the U.S. Department of State indexes of living costs abroad, quarters allowances, hardship differentials, and danger pay allowances. The statistics are computed by the Office of Allowances of the Department of State for use in establishing allowances to compensate U.S. Government civilian employees for costs and hardships related to assignments abroad. This information is also used by many business firms and other private organizations to assist in establishing private compensation systems. The data are published quarterly in January, April, July, and October.
Detailed explanations of the methods of compiling the local and U.S. Government indexes, quarters allowances, hardship differentials, and danger pay allowances are included in the Technical Notes sections of the January, April, and July publications. It is important that allowance data users be thoroughly familiar with the methods used in compiling these statistics and their limitations. The data are compiled primarily to establish allowances for Federal civilian employees abroad, and the government allowance program includes additional relocation benefits which will be described in the Technical Notes section of the October publication.
Indexes of Living Costs Abroad
The indexes of living costs (Table 1) are used to compute cost-of-living allowances for employees at posts where living costs, based on an American pattern of living, are significantly higher than in the Washington, D.C. area. To compute a cost-of-living allowance, the appropriate index of living costs is applied to spendable income the estimated portion of employee salary used to purchase goods and services. The cost-of-living allowance is a goods and services allowance. It does not cover U.S. or foreign income taxes, retirement contributions, life insurance premiums, personal savings, investments or charitable contributions. In addition, it does not cover housing and children's education, which are covered by separate allowances.
The indexes of living costs abroad compare the costs in dollars of representative goods and services (excluding housing and education) purchased at the foreign location and the cost of comparable goods and services in the Washington, D.C. area. The indexes are calculated on the basis of price data reported by foreign posts using a standard Retail Price Schedule and data similarly reported by the Bureau of Labor Statistics of the U.S. Department of Labor for the Washington, D.C. area.
In addition to the indexes used to establish post (cost-of-living) allowances for U.S. Government employees, separate indexes are computed solely for private Americans living abroad. The indexes computed for private American employees the local relative and local index exclude special advantages that may be available only to U.S. Government employees. The U.S. Government relative and the U.S. Government index must include prices of goods imported to posts, sales tax rebates, military- or employee-operated post commissaries, and other advantages that may be available only to U.S. Government employees. The indexes are published for all locations for which reliable indexes are computed regularly.
The indexes are place-to-place comparisons at specific times and currency exchange rates. They cannot be used for measuring cost changes over time at a foreign location. Also, the indexes should not be used to compare living costs of Americans in the United States with the living costs of foreign nationals living in their own country, since the indexes reflect only the expenditure pattern and living costs of American families.
Quarters Allowances
The quarters allowances (Table 2) are the maximum allowances payable to U.S. Government employees to cover housing costs at the foreign location. Employees recruited in the United States to work abroad for the U.S. Government may receive either free government housing or an allowance to substantially cover the cost of privately rented housing. The allowance payable to a Federal civilian employee is either the amount of actual housing costs or the maximum allowance, whichever is less.
Department of State Publication 10197
Bureau of Administration
Office of Allowances
Revised April 1998
The quarters allowance reimburses Federal employees for rent; electricity, gas, fuel, and water; taxes and insurance premiums required by local law or custom to be paid by the tenant; and the agent's fee incurred by the landlord and required by law or custom to be paid by the tenant as a condition of obtaining a lease. The allowance may also be used to cover some of the costs for garage rent and necessary furniture rental.
Quarters allowances are established on the basis of annual expenditure reports submitted by all U.S. Government civilian employees in private housing abroad. Maximum allowances are established for employees of various Federal grade levels and family sizes. For publication purposes, approximate salary levels for each Federal grade level are indicated in Table 2. The family rate shown in the table is for an employee with one family member. The additional amounts for larger families are described in footnote 4 to Table 2. The quarters data are published for selected locations. The allowance rates established at the time of the annual survey are designed to fully reimburse approximately 80 percent of the employees in the sample for all allowable rent and household utility expenditures.
Post (Hardship) Differentials
Post differentials (Table 3) are provided to Federal employees, recruited in the United States, as foreign area recruitment and retention incentives. A differential is established where living conditions for U.S.G. employees are extraordinarily difficult, physical hardships are excessive, or living conditions are notably unhealthful.
The differential rate for each location is based primarily on a standard evaluation of environmental conditions as reported in the Post Differential Questionnaire. The overall rating results from an examination of 150 specific environmental factors, weighted for their relative importance. Depending on the total hardship rating, employees are paid post differentials of 5, 10, 15, 20, or 25 percent of base salary. The maximum amount that Federal employees can currently receive as combined annual base salary and hardship differential is $136,700. Any post differential paid Federal employees is subject to Federal income tax.
Danger Pay Allowances
A danger pay allowance may be paid Federal civilian employees where civil insurrection, civil war, terrorism, or wartime conditions threaten physical harm or pose imminent danger to the health or well-being of the employee. Locations authorized danger pay allowances are identified by footnotes in Table 3. Conditions that may warrant a danger pay determination are reported in the Danger Pay Factors Form. Depending upon the level of danger, levels of 15, 20, and 25 percent of base salary are authorized.
Danger pay allowances may be paid to employees on temporary detail at a danger pay location for at least 4 consecutive hours. The danger pay allowance paid Federal employees is subject to Federal income tax.
Technical Information
Technical notes of this publication describe the compensation of American Government employees in foreign areas. The notes also explain how the indexes of living costs abroad may be used to adjust a U.S. salary level for higher living costs abroad. Technical questions may be directed to the Office of Allowances, SA29, Room 262, U.S. Department of State, Washington, D.C. 20522-2902 Telephone: (703) 875-7900.
Table 1. Indexes of Living Costs Abroad, April 1998 (Washington, D.C. = 100) Exchange Rate 1 Local 2 U.S.Government 3
Country and City Survey Foreign Number
Date Unit per US$ Relative Index Relative Index Angola: Luanda Apr-97 Kwanza 200,000 167 178 123 126 Argentina: Buenos Aires Nov-96 Peso 1.00 124 134 112 123 Armenia: Yerevan May-97 Dram 480 97 103 90 97 Australia: Canberra Oct-97 Dollar 1.37 127 128 112 113 Sydney Oct-95 Dollar 1.31 125 123 116 115 Austria: Vienna May-97 Schilling 11.9 161 150 134 128 Azerbaijan: Baku Oct-95 Manat 4,560 100 102 86 88 Azores: Ponta Delgada Mar-97 Escudo 171 105 106 95 95 Bahamas: Freeport Jun-97 Dollar 1.00 123 132 116 125 Nassau Dec-96 Dollar 1.00 132 134 121 122 Bahrain: Manama Apr-97 Dinar 0.3769 103 112 94 103 Bangladesh: Dhaka Feb-97 Taka 42.5 77 81 74 82 Barbados: Bridgetown Mar-97 Dollar 2.00 141 143 126 127 Belarus: Minsk Feb-96 Ruble 11,500 103 106 98 100 Belgium: Brussels Dec-96 Franc 31.9 155 151 128 128 Shape/ Chievres Jun-97 Franc 35 130 132 106 107 Belize: Belize City Jul-97 Dollar 1.99 108 118 94 103 Benin: Cotonou Aug-95 CFA Franc 480 92 100 86 93 Bermuda Mar-97 Dollar 1.00 154 155 135 135 Bolivia: La Paz May-97 Boliviano 5.23 84 90 78 84 Botswana: Gaborone Jan-97 Pula 3.66 82 87 80 86 Brazil: Brasilia Nov-97 Real 1.09 134 139 108 113 Rio de Janeiro Nov-96 Real 1.0150 132 138 119 125 Sao Paulo Nov-96 Real 1.0150 154 146 134 125 Brunei: Bandar Seri Begawan May-96 Dollar 1.40 113 130 107 123 Bulgaria: Sofia Jul-94 Leva 53.9 79 84 85 91 Burkina: Ouagadougou Jun-97 CFA Franc 575 99 106 86 92 Burma: Rangoon Mar-97 Kyat 164 83 94 75 86 Burundi: Bujumbura Oct-96 Franc 317 149 148 125 122 Cambodia: Phnom Penh Feb-94 Riel 2,500 86 87 82 83 Cameroon: Yaounde Oct-97 CFA Franc 598 112 127 98 113 Canada: Halifax Mar-96 Dollar 1.35 108 108 101 101 Ottawa Oct-97 Dollar 1.37 104 104 101 101 Toronto Jul-97 Dollar 1.38 110 110 104 104 Cape Verde: Praia Jul-93 Escudo 81.1 94 101 85 91 Cent. African Rep.:Bangui Nov-95 CFA Franc 490 127 136 110 118 Chad: N'Djamena Jul-97 CFA Franc 582 128 138 109 117 Chile: Santiago May-97 Peso 413 121 128 112 120 5 5 China: Beijing Oct-96 Renminbi 8.30 126 131 101 107 Guangzhou Feb-96 Renminbi 8.29 115 107 108 100 Shanghai May-96 Renminbi 8.31 110 113 100 104 Colombia: Bogota Jun-97 Peso 1079 109 113 98 102 Congo: Brazzaville Oct-96 CFA Franc 514 165 176 126 135 Congo, Dem. Republic of: Kinshasa Jul-95 New Zaire 6,013 189 204 134 148 Costa Rica: San Jose Jul-95 Colon 178 84 88 78 82 Cote d'Ivoire: Abidjan Nov-97 CFA Franc 595 112 118 100 106 Croatia: Zagreb Feb-97 Kuna 5.80 116 116 109 108 5 5 Cuba: Havana Jun-96 Dollar 1.00 114 123 104 112 Cyprus: Nicosia Apr-97 Pound 0.5074 115 116 101 101 Czech Republic: Prague Sep-96 Koruna 26.6 110 106 99 96 Denmark: Copenhagen Aug-95 Kroner 5.38 181 177 146 142 Djibouti: Djibouti City Jul-96 Franc 177 151 164 128 138 Dominican Republic: Santo Domingo Mar-97 Peso 14.4 108 117 98 105 Ecuador: Quito Dec-96 Sucre 3,335 83 88 83 88 Egypt: Cairo Jun-96 Pound 3.40 82 99 73 91 El Salvador: San Salvador Jun-97 Colon 8.75 90 96 83 89 Eritrea: Asmara Oct-97 Birr 7.2 98 104 88 94 Estonia: Tallinn Sep-97 Kroon 14.5 86 87 82 84 Ethiopia: Addis Ababa Mar-97 Birr 6.24 102 111 86 95 Fiji: Suva Dec-96 Dollar 1.40 108 116 103 111 Finland: Helsinki Apr-97 Markka 5.14 150 149 123 123 France: Paris Mar-97 Franc 5.57 165 152 139 128 Gabon: Libreville Feb-97 CFA Franc 539 154 172 119 134 Gambia: Banjul Apr-96 Dalasi 9.8 103 110 92 99 Georgia: Tbilisi Jan-97 Lari 1.2 114 119 100 105 Germany: Berlin Aug-97 Mark 1.75 129 125 117 114
Bonn Jul-97 Mark 1.71 134 133 113 112 Frankfurt Apr-97 Mark 1.64 150 148 122 121 Hamburg May-95 Mark 1.37 164 157 140 136 Munich Jun-96 Mark 1.49 158 149 133 130 Ghana: Accra May-97 Cedi 1925 99 108 91 99 Greece: Athens Nov-96 Drachma 239 136 136 113 113 Kavala Relay Sta. Mar-97 Drachma 265 108 108 94 94 Thessaloniki Dec-95 Drachma 237 124 126 106 107 Grenada Oct-95 Dollar 2.70 111 120 97 107 Guatemala: Guatemala City Aug-95 Quetzal 5.76 100 107 91 99 Guinea: Conakry Jul-97 Franc 1095 116 128 96 106 5 5 Guinea-Bissau: Bissau Jan-97 Peso 34,391 107 113 94 100 Guyana: Georgetown May-97 Dollar 144 74 78 75 80 Haiti: Port-au-Prince Oct-96 Gourde 15.1 102 108 89 94 Honduras: Tegucigalpa Jan-97 Lempira 13.05 74 79 71 76 Hong Kong Sep-97 Dollar 7.75 152 137 126 117 Hungary: Budapest Apr-97 Forint 176 102 98 92 89 Iceland: Reykjavik Dec-96 Kronur 66.2 154 156 114 114 India: New Delhi Dec-95 Rupee 34.7 78 83 82 87 Indonesia: Jakarta Jul-96 Rupiah 2,316 106 114 97 104 Surabaya Aug-97 Rupiah 2,594 87 97 82 92 Ireland: Dublin Feb-97 Pound 0.6086 147 141 124 122 Israel: Tel Aviv Apr-97 New Shekel 3.4 161 163 120 121 Italy: Milan May-97 Lira 1,683 154 145 126 122 Naples Oct-95 Lira 1,602 138 140 109 109 Rome Apr-97 Lira 1,676 145 140 130 126 Jamaica: Kingston Sep-97 Dollar 35.7 116 123 107 113 Japan: Fukuoka Jan-97 Yen 111 177 172 151 149 Gotemba (Camp Fuji)Feb-96 Yen 104 170 172 129 131 Kobe-Osaka Mar-97 Yen 119 186 176 161 155 Misawa Feb-96 Yen 102 182 183 112 113 Okinawa Jan-97 Yen 112 169 169 122 121 Sapporo Apr-97 Yen 119 179 176 160 158 Tokyo Mar-97 Yen 119 180 172 142 139 Yokohama Sep-97 Yen 116 175 168 133 132 Yokosuka Jan-97 Yen 111 172 168 132 130 Yokota Jan-97 Yen 111 158 155 124 123 Jerusalem Apr-96 New Shekel 3.09 139 142 119 121 Jordan: Amman Apr-97 Dinar 0.7102 112 118 92 97 Kazakhstan: Almaty Jul-96 Tenge 67.2 148 156 107 108 Kenya: Nairobi Oct-97 Shilling 54.9 104 112 94 103 Korea: Seoul Jun-97 Won 873 139 143 101 106 Kuwait: Kuwait City Oct-95 Dinar 0.2983 113 123 99 111 Kyrgyzstan: Bishkek Nov-96 Som 14.6 113 121 101 108 Laos: Vientiane Mar-96 Kip 925 94 119 89 115 Latvia: Riga Nov-96 Lats 0.5457 109 126 93 110 Lebanon: Beirut Oct-92 Pound 2,335 85 94 80 90 Lesotho: Maseru May-96 Maloti 4.35 78 78 77 78 Liberia: Monrovia Aug-97 Dollar 1.00 132 140 102 108 Lithuania: Vilnius Jul-97 Litas 3.99 107 115 90 96 Luxembourg: Luxembourg Mar-97 Franc 34.8 126 128 118 118 Macedonia, Former Yugoslav Republic of: Skopje Apr-95 Denar 36.8 120 117 108 103 Madagascar: Antananarivo Jan-97 Franc 4,353 94 101 80 86 Malawi: Lilongwe Jun-96 Kwacha 15.21 95 100 79 84 Malaysia: Kuala Lumpur Apr-97 Ringgit 2.48 110 120 94 105 Mali: Bamako Nov-95 CFA Franc 496 109 118 94 101 Malta May-97 Lira 0.3586 107 109 99 101 Marshall Islands: Majuro Mar-96 Dollar 1.00 117 120 112 115 Mauritania: Nouakchott Oct-97 Ouguiya 156 128 139 109 118 Mauritius: Port Louis Jan-97 Rupee 19.8 98 105 85 92 Mexico: Mexico, D.F. Sep-97 Peso 7.81 100 101 91 93 Monterrey Jan-94 Peso 3.10 106 112 99 105 Micronesia: Pohnpei Jul-95 Dollar 1.00 96 99 95 98 Moldova: Chisinau Oct-95 Leu 4.47 83 85 80 82 Morocco: Casablanca Sep-94 Dirham 8.92 108 109 94 96 Rabat Jul-96 Dirham 8.76 108 109 89 89 Mozambique: Maputo Oct-96 Metical 11,230 117 126 97 106 Namibia: Windhoek Oct-96 Rand 4.52 94 95 90 90 Nepal: Kathmandu Dec-93 Rupee 49 82 88 81 87 Netherlands: The Hague Feb-97 Guilder 1.84 144 141 123 123 Brunssum Jan-96 Guilder 1.61 137 139 105 105 Netherlands Antilles:Aruba Mar-94 Florin 1.78 109 113 105 108 Curacao Jul-97 Florin 1.78 115 117 103 104 New Zealand: Wellington Nov-96 Dollar 1.43 124 125 110 111 Nicaragua: Managua Mar-97 Cordoba 9.11 100 110 93 103 Niger: Niamey Jul-96 CFA Franc 516 122 135 100 113 Nigeria: Abuja Dec-96 Naira 80.1 109 113 97 101 Lagos Jan-97 Naira 78.8 106 112 90 98 Norway: Oslo Sep-96 Kroner 6.41 185 184 148 149 Oman: Muscat Nov-97 Rial 0.3849 108 118 102 111 Pakistan: Islamabad Apr-97 Rupee 40.1 83 96 76 89 Palau, Republic of: Koror Jul-97 Dollar 1.00 101 105 101 104 Panama: Panama City Aug-96 Balboa 1.00 88 94 87 92 Papua New Guinea: Port Moresby Jan-97 Kina 1.34 136 146 118 125 Paraguay: Asuncion Nov-97 Guarani 2,194 106 110 95 99 Peru: Lima Nov-97 New Sol 2.71 123 130 109 116 Philippines: Manila May-96 Peso 26.2 97 106 90 99 Poland: Warsaw Mar-97 New Zloty 3.04 102 109 89 96 Portugal: Lisbon Mar-97 Escudo 170 123 122 105 105 Qatar: Doha Oct-96 Riyal 3.62 98 107 93 103 6 6 Romania: Bucharest Jun-97 Leu 7000 106 109 98 101 7 Russia: Moscow Jul-97 Ruble 5732 152 153 117 118 7 St. Petersburg Jan-97 Ruble 5,505 153 154 123 124 Vladivostok Aug-95 Ruble 4,400 112 116 102 106 Yekaterinburg Sep-96 Ruble 5,300 112 118 98 103 Rwanda: Kigali May-97 Franc 306 117 126 94 103 Saudi Arabia: Al Khobar (Dhahran) Sep-97 Riyal 3.75 125 140 107 120 Jeddah Sep-97 Riyal 3.75 104 121 93 111 Riyadh Jun-97 Riyal 3.75 125 143 105 125 Senegal: Dakar Dec-96 CFA Franc 510 127 134 109 115 Serbia-Montenegro:Belgrade Apr-95 New Dinar 2.39 126 128 93 93 Seychelles: Victoria Oct-95 Rupee 4.91 140 159 107 122 Sierra Leone: Freetown Jan-97 Leone 960 115 124 101 110 Singapore Jun-96 Dollar 1.41 127 137 111 122 Slovakia: Bratislava Jun-94 Korun 32.5 90 89 83 82 Slovenia: Ljubljana Jan-97 Tolar 141 118 118 104 103 South Africa: Cape Town Oct-95 Rand 3.65 93 95 85 86 Johannesburg Oct-97 Rand 4.67 94 95 90 91 Pretoria Nov-95 Rand 3.66 97 97 95 94 Spain: Barcelona May-97 Peseta 144 140 135 127 122 Madrid Jan-97 Peseta 131 142 133 126 118 Sri Lanka: Colombo Feb-97 Rupee 56.8 104 109 91 96 Sudan: Khartoum Feb-95 Pound 430 107 118 92 104 Suriname: Paramaribo Aug-97 Guilder 396 99 107 94 101 Swaziland: Mbabane Sep-97 Rand 4.69 79 85 76 83 Sweden: Stockholm Apr-97 Kroner 7.63 169 161 141 133 Switzerland: Geneva Jun-96 Franc 1.19 186 185 169 167 Syria: Damascus Nov-96 Pound 42.0 103 112 92 101 8 8 8 8 Taiwan: Kaohsiung Mar-93 Dollar 26.0 130 135 118 124 8 8 8 8 Taipei Feb-97 Dollar 27.4 140 143 117 120 6 6 Tajikistan: Dushanbe Aug-94 Ruble 1,500 N/A N/A 100 91 Tanzania: Dar es Salaam Jan-97 Shilling 596 119 130 93 103 Thailand: Bangkok Mar-97 Baht 25.9 103 115 91 103 Togo: Lome Jun-96 CFA Franc 515 106 119 93 106 Trinidad/Tobago: Port-of-Spain Aug-93 Dollar 5.58 94 100 85 92 Tunisia: Tunis Apr-97 Dinar 1.06 111 115 98 103 Turkey: Istanbul Nov-96 Lira 92,567 130 135 112 117 Turkmenistan: Ashgabat Mar-97 Manat 5,250 102 109 102 108 Uganda: Kampala Aug-97 Shilling 923 148 161 106 117 Ukraine: Kiev Jan-97 Hryvnia 1.7 128 132 107 111 United Arab Emirates: Abu Dhabi Mar-97 Dirham 3.65 99 112 94 108 Dubai Jun-96 Dirham 3.65 109 118 102 111 United Kingdom: Belfast May-96 Pound 0.6438 141 142 126 125 Bristol Aug-95 Pound 0.6317 132 132 112 113 Croughton Sep-95 Pound 0.6317 141 143 116 117 Gatwick Feb-95 Pound 0.6186 144 145 133 134 London Apr-97 Pound 0.5988 154 146 132 128 Loudwater Apr-97 Pound 0.6012 153 155 127 129 Rochester Mar-97 Pound 0.5976 154 155 140 141 Uruguay: Montevideo Sep-97 Peso 9.6 138 147 119 126 Uzbekistan: Tashkent Mar-97 Som 55.8 120 123 101 104 Venezuela: Caracas Dec-97 Bolivar 500 117 125 99 107 Vietnam: Hanoi Oct-97 N Dong 11,640 103 103 96 96 Yemen: Sanaa Mar-96 Riyal 129.0 90 97 80 88 Zambia: Lusaka Aug-95 Kwacha 941 99 120 95 116 Zimbabwe: Harare Jul-93 Dollar 6.62 73 78 68 74
1. The exchange rates shown are those used to calculate the indexes. They are usually the rates available to American citizens during the survey month. Current exchange rates may differ from the rates shown. Interim indexes adjusted for new exchange rates are not published. See Technical Notes for an explanation of how the local indexes may be adjusted for changes in exchange rates.
2. The local relative and local index measure living costs for private American citizens. The local relative is a comparison of the prices of goods and services at the foreign post and in Washington, D.C., with the price ratios weighted by the pattern of expenditure in Washington, D.C. Consequently, the local relative is a comparison of price levels at the post and in Washington, D.C., but not necessarily a comparison of the cost of living abroad. The local index is a comparison of prices at the foreign post and in Washington, D.C., with the price ratios weighted by the expenditure pattern of American employees living at the foreign post. It is, thereby, a measure of the cost of living for Americans at the foreign post compared with the cost of living in Washington, D.C. This is the index most appropriate for use by business firms and other private organizations to establish costofliving allowances for their American employees stationed abroad.
3. The U.S. Government relative and index include prices of goods imported to the post and price advantages available only to U.S. Government employees. The U.S. Government relative is a comparison of price levels but not necessarily of living costs abroad because the expenditure weights reflect only the Washington, D.C. expenditure pattern. The U.S. Government index reflects Federal employee foreign expenditure patterns and is used to compute foreign post allowances for Federal employees.
4. New surveys since the January 1998 publication are in boldface.
5. Local relative and local index comparisons include prices in hard currency or diplomatic stores.
6. Insufficient local retail price data to develop meaningful local relative and local index living cost comparisons.
7. Most prices were reported in U.S. dollars.
8. There are no U.S. Government employees in Taiwan. The figures listed in this column represent a living cost comparison for American employees of the American Institute in Taiwan, who have some duty-free and other special benefits that may not be available to other Americans in Taipei.
Table 2. Quarters Allowances, April 1998 Annual Allowance by family Exchange Rate (3) status and salary range Country and City Survey Effective Foreign Number Family Less Than$34,000 $62,000 Date (2) Date Unit per US$ Status4 $34,000 $61,999 & above Australia: Melbourne Oct-97 Apr-98 Dollar 1.52 Family $15,700 $17,400 $18,200 Single 14,200 15,700 17,400 Azores: Lajes Field Sep-96 Dec-96 Escudo 152 Family 7,100 7,500 7,500 Single 6,100 7,100 7,500 Bahrain: Manama Apr-97 May-97 Dinar 0.3769 Family 21,700 24,100 24,100 Single 19,300 21,700 24,100 Barbados: Oct-97 Oct-97 Dollar 2.00 Family 20,200 22,400 25,900 Single 17,900 20,200 23,500 Belgium: Brussels Dec-97 Mar-98 Franc 37.8 Family 22,900 23,900 27,200 Single 19,900 22,900 23,900 Shape/Chievres Oct-97 Apr-98 Franc 37.8 Family 14,400 16,200 17,000 Single 12,900 14,400 16,200 Bermuda Dec-95 Oct-96 Dollar 1.00 Family 23,600 26,200 26,200 Single 21,900 21,900 24,800 Canada: Calgary Dec-97 Apr-98 Dollar 1.40 Family 16,800 18,500 20,500 Single 14,900 16,800 19,400 Montreal Jan-98 Feb-98 Dollar 1.40 Family 17,000 18,900 21,000 Single 16,400 17,100 20,100 Ottawa Dec-97 Jan-98 Dollar 1.41 Family 17,300 19,200 22,000 Single 15,400 17,300 20,200 Toronto Jan-98 Apr-98 Dollar 1.40 Family 22,000 24,400 26,900 Single 19,400 22,000 25,600 Vancouver Jan-98 Apr-98 Dollar 1.40 Family 17,300 19,100 21,200 Single 15,300 17,300 20,100 Dominican Republic: Santo Domingo Mar-94 Apr-94 Peso 12.8 Family 11,000 13,700 14,400 Single 9,700 11,000 14,400 Ecuador: Quito Mar-98 Mar-98 Sucre 4,466 Family 16,300 18,100 21,800 Single 14,500 16,300 21,000 France: Paris Jan-98 Apr-98 Franc 5.94 Family 36,600 40,700 44,900 Single 32,700 36,600 42,700 Germany:Augsburg Jul-97 Mar-98 Mark 1.78 Family 15,500 17,000 17,980 Single 13,800 15,500 16,700 Berlin Jun-97 Mar-98 Mark 1.78 Family 20,000 24,100 24,800 Single 18,500 20,000 24,800 Bonn Jun-97 Mar-98 Mark 1.78 Family 15,900 18,000 18,900 Single 14,500 15,900 18,000 Frankfurt Apr-97 Mar-98 Mark 1.78 Family 19,900 22,600 23,600 Single 17,900 19,900 22,600 Hanau Apr-97 Mar-98 Mark 1.78 Family 16,400 18,200 19,100 Single 14,500 16,400 18,200 Heidelberg- Mannheim Apr-97 Mar-98 Mark 1.78 Family 19,700 22,000 24,300 Single 17,700 19,700 23,200 Kaiserslautern Mar-97 Mar-98 Mark 1.78 Family 19,700 23,200 24,400 Single 17,700 19,200 23,200 Karlsruhe Jul-97 Mar-98 Mark 1.78 Family 15,600 17,400 18,100 Single 14,000 15,600 17,400 Leipzig May-95 Feb-98 Mark 1.77 Family 11,900 13,100 13,900 Single 10,300 11,900 13,500 Nuernberg Apr-97 Feb-98 Mark 1.77 Family 14,700 16,000 16,800 Single 12,800 14,400 16,000 Stuttgart Apr-97 Mar-98 Mark 1.78 Family 17,700 19,400 20,500 Single 15,900 17,700 19,400 Wiesbaden Mar-97 Mar-98 Mark 1.78 Family 20,100 22,600 23,600 Single 18,000 20,100 22,600 Greece: Athens Jan-97 Mar-97 Drachma 246 Family 15,300 17,000 17,000 Single 14,000 15,900 17,000 Guatemala: Guatemala City Dec-97 Dec-97 Quetzal 6.15 Family 21,500 23,900 26,400 Single 19,100 21,500 23,900 Honduras: Tegucigalpa Apr-96 Mar-97 Lempira 11.14 Family 12,400 17,200 17,200 Single 12,000 14,200 16,600 Iceland: Keflavik Jun-96 Dec-96 Kronur 67.2 Family 12,300 13,500 13,500 Single 10,800 12,300 13,500 Italy: Brindisi Feb-97 Apr-98 Lira 1,784 Family 6,500 7,800 7,800 Single 6,500 7,800 7,800 Catania Mar-97 Jun-97 Lira 1,603 Family 13,700 15,200 15,900 Single 12,200 13,700 15,900 Leghorn Jun-97 Jul-97 Lira 1,682 Family 14,200 15,800 16,600 Single 12,600 14,200 15,800 Naples Aug-97 Apr-98 Lira 1,762 Family 16,000 17,900 18,700 Single 14,300 16,200 17,900 Pordenone -Aviano Aug-97 Apr-98 Lira 1,792 Family 12,500 13,700 14,300 Single 11,100 12,500 13,700 Rome Mar-98 Apr-98 Lira 1,792 Family 32,900 29,900 32,800 Single 31,500 26,900 31,500 Vicenza Aug-97 Apr-98 Lira 1,792 Family 12,600 13,700 14,400 Single 11,100 12,600 13,700 Japan: Misawa May-98 Apr-98 Yen 129 Family 20,500 22,600 25,000 Single 19,900 20,500 23,800 Okinawa Jan-97 Apr-98 Yen 128 Family 18,500 20,600 22,500 Single 13,300 18,500 21,600 Tokyo City Feb-97 Apr-98 Yen 128 Family 49,700 61,100 61,100 Single 45,400 58,100 59,000 Tokyo-To Feb-98 Apr-98 Yen 129 Family 28,100 31,200 34,200 Single 24,900 28,100 32,800 Yokohama Mar-98 Apr-98 Yen 129 Family 23,500 26,100 28,700 Single 20,900 23,500 27,400 Yokosuka Feb-98 Apr-98 Yen 129 Family 21,800 24,200 26,600 Single 19,400 21,800 25,400 Korea: Osan May-97 Nov-97 Won 875 Family 18,200 20,200 21,200 Single 16,200 18,200 20,200 Pusan May-97 Jul-97 Won 832 Family 19,300 21,400 21,400 Single 17,100 19,300 21,400 Seoul May-97 Nov-97 Won 919 Family 32,500 36,100 37,900 Single 28,900 32,500 36,100 Taegu May-97 Sept-97 Won 881 Family 19,200 21,300 22,400 Single 17,000 19,200 21,300 Uijongbu Aug-97 Sept-97 Won 876 Family 20,200 22,400 23,500 Single 17,900 20,200 22,400 Luxembourg Mar-98 Apr-98 Franc 37.7 Family 25,700 28,500 31,400 Single 22,800 25,700 29,900 Mexico: Mexico, D.F. May-95 Jul-95 Peso 6.36 Family 30,800 34,100 37,500 Single 27,300 30,800 35,800 Netherlands: Brunssum Jan-97 Mar-98 Guilder 2.06 Family 14,600 15,800 15,800 Single 13,400 14,600 15,400 The Hague Jun-97 Mar-98 Guilder 2.06 Family 25,000 27,700 30,600 Single 22,200 25,000 27,300 Norway: Oslo Jun-97 Apr-98 Kroner 7.54 Family 17,100 20,300 21,300 Single 16,400 17,100 20,300 Panama: Panama City Apr-97 Jul-97 Balboa 1.00 Family 24,400 26,000 27,300 Single 20,800 24,400 26,000 Paraguay: Asuncion Oct-95 Nov-95 Guarani 1,968 Family 19,200 21,300 21,900 Single 17,000 19,200 21,900 Peru: Lima Feb-97 Mar-97 New Sol 2.63 Family 24,600 27,300 27,300 Single 21,800 24,600 25,400 Portugal: Lisbon Jun-97 Mar-98 Escudo 187 Family 25,600 28,500 31,400 Single 22,600 25,600 29,900 Singapore Mar-98 Apr-98 Dollar 1.62 Family 30,400 34,300 36,300 Single 27,300 30,400 34,900 Spain: Madrid Nov-97 Apr-98 Peseta 156 Family 21,800 24,300 28,400 Single 19,500 21,800 24,300 Rota Oct-97 Apr-98 Peseta 156 Family 14,000 15,400 16,200 Single 12,500 14,100 15,400 Torrejon Apr-97 Apr-98 Peseta 156 Family 13,600 15,100 17,500 Single 12,300 13,700 15,700 Switzerland: Bern Jul-97 Apr-98 Franc 1.48 Family 26,300 29,300 31,700 Single 23,400 26,300 29,300 Geneva May-97 Apr-98 Franc 1.48 Family 33,300 37,000 44,100 Single 29,800 33,300 37,000 Thailand: Bangkok May-97 Apr-98 Baht 53.1 Family 11,400 13,100 13,300 Single 10,400 11,400 13,100 Turkey: Adana-Incirlik Oct-97 Dec-97 Lira 175,633 Family 8,100 9,800 10,100 Single 7,800 8,100 9,800 Ankara Aug-97 Aug-97 Lira 153,500 Family 12,000 13,300 14,600 Single 11,100 12,000 14,000 Izmir-Cigli Sep-96 Dec-96 Lira 86,123 Family 11,100 12,300 13,500 Single 9,800 11,100 12,300 United Kingdom: Cheltenham Jan-97 Apr-98 Pound 0.5791 Family 14,800 16,800 18,400 Single 13,300 14,400 17,600 Chicksands Mar-95 Apr-98 Pound 0.5791 Family 14,200 16,400 16,900 Single 13,100 13,900 15,900 Harrogate Jan-97 Apr-98 Pound 0.5791 Family 18,800 20,300 22,800 Single 16,800 18,300 21,700 Lakenheath Jan-97 Apr-98 Pound 0.5791 Family 17,000 18,300 20,700 Single 14,800 16,500 19,700 London Feb-98 Apr-98 Pound 0.5814 Family 41,000 37,000 33,200 Single 40,700 33,200 32,500 Oxfordshire Dec-96 Apr-98 Pound 0.5814 Family 15,000 16,700 17,200 Single 13,600 14,600 17,200
1. The allowance figures shown in the table are the maximum allowances payable. The quarters allowance paid to each eligible government employee is either the amount of actual expenditures for rent and utilities or the allowance maximum, whichever is less.
2. The survey date is the month when the employee housing expenditure reports were received by the Office of Allowances. The effective date is the month when either (a) allowances were revised on the basis of employee housing expenditure reports, or (b) the allowances were revised solely for changes in currency exchange rates, or (c) existing allowances were reviewed and found to be appropriate.
3. The exchange rate is the rate used to compute the quarters allowances as of the effective date.
4. Quarters allowances are computed for single persons and 2-person families. Employees with larger families living with them at post receive supplements of 10, 20, or 30 percent of the 2person allowance (for families of 3 to 4 persons, 5 to 6 persons, or 7 or more persons, respectively).
5. The quarters allowances for Tokyo To refer to housing in the Tokyo suburbs.
Table 3. Hardship Differentials, April 1998 1 2 1 2 Country and City Differential Country and City Differential Rate Percent Rate Percent Afghanistan: Kabul 25 Fiji: Suva 5 Albania: Tirana 20 Gabon: Libreville 15 Algeria: Algiers 25 Gambia: Banjul 20 Angola: Luanda 25 Georgia: Tbilisi 25 Armenia: Yerevan 25 Ghana: Accra 20 Azerbaijan: Baku 25 Greece: Athens 5 Bahrain 5 Grenada 10 Bangladesh: Dhaka 20 Guatemala : Guatemala City 10 Belarus: Minsk 20 Guinea: Conakry 25 Belize: Belize City 15 Guinea-Bissau: Bissau 25 Benin: Cotonou 15 Guyana: Georgetown 20 Bolivia: La Paz 15 Haiti: Port-au-Prince 25 Bosnia-Herzegovina: Sarajevo 25 Honduras: Tegucigalpa 10 Brazil: Recife 5 India: Calcutta 20 Brunei: Bandar Seri Begawan 15 Chennai (Madras) 15 Bulgaria: Sofia 15 Mumbai (Bombay) 15 Burkina: Ouagadougou 20 New Delhi 10 Burma: Rangoon 25 Indonesia: Jakarta 10 Burundi: Bujumbura 20 Medan 15 Cambodia: Phnom Penh 25 Surabaya 15 Cameroon: Dschang 15 Iraq: Baghdad 20 Yaounde 20 Jamaica: Kingston 10 Cape Verde: Praia 20 Jerusalem 5 Central African Rep.: Bangui 25 Jordan: Amman 5 Chad: N'Djamena 25 Kazakhstan: Almaty 20 China: Beijing 15 Kenya: Nairobi 10 Chengdu 25 Korea: Chunchon 5 Guangzhou 20 Kunsan 5 Shanghai 15 Osan 5 Shenyang 25 Taegu 5 Tongduchon 5
Uijongbu 5
Colombia: Barranquilla 10 Korea, Dem. People's Rep. of: Bogota 5 Pyongyang 25 Kuwait: Kuwait City 15
Kyrgyzstan: Bishkek 25 Congo: Brazzaville 25 Laos: Vientiane 25 Congo, Dem. Rep. of: Kinshasa 20 Latvia: Riga 10 Cote d'Ivoire: Abidjan 15 Lebanon: Beirut 25 Croatia: Zagreb 5 Lesotho: Maseru 10 Cuba: Havana 20 Liberia: Monrovia 25 Djibouti: Djibouti City 15 Lithuania: Vilnius 10 Dominican Rep.: Santo Domingo 10 Macedonia, The Former Yugoslav Ecuador: Guayaquil 10 Republic of: Skopje 15 Quito 10 Madagascar: Antananarivo 15 Egypt: Alexandria 15 Malawi: Lilongwe 15 Cairo 10 Mali: Bamako 25 El Salvador: San Salvador 15 Malta 5 Eritrea: Asmara 20 Marshall Islands: Majuro 10 Estonia : Tallinn 10 Mauritania: Nouakchott 20 Ethiopia: Addis Ababa 20 Mauritius 5 [See footnotes at end of table] Mexico: Merida 5 Samoa 10 Mexico, D.F. 10 Saudi Arabia: Dhahran Area 20 Micronesia, Fed. States: Pohnpei 15 Jeddah 20 Moldova: Chisinau 15 Riyadh 20 Mongolia: Ulaanbaatar 25 Senegal: Dakar 15 Mozambique: Maputo 20 Serbia-Montenegro: 15 Nepal: Kathmandu 20 Sierra Leone: Freetown 25 Solomon Islands 15 Nicaragua: Managua 10 Somalia: Mogadishu 20 Niger: Niamey 20 Sri Lanka: Colombo 15 Nigeria: Abuja 25 Sudan: Khartoum 25 Kaduna 25 Suriname: Paramaribo 15 Lagos 25 Syria: Damascus 15 Oman: Muscat 5 Tajikistan: Dushanbe 25 Pakistan: Islamabad 15 Tanzania: Dar es Salaam 15 Karachi 15 Thailand: Bangkok 10 Lahore 20 Chiang Mai 10 Peshawar 25 Songkhla 15 Palau, Republic of: Koror 10 Udorn 15 Papua New Guinea: Port Moresby 25 Togo: Lome 20 Paraguay: Asuncion 5 Trinidad/Tobago: Port of Spain 5 Peru: Lima 10 Tunisia: Tunis 5 Philippines: Cebu 15 Turkey: Adana-Incirlik 5 Manila 10 Ankara 5 Poland: Krakow 10 Istanbul 5 Warsaw 10 Izmir-Cigli 5 Qatar: Doha 5 Turkmenistan: Ashgabat 20 Romania: Bucharest 15 Uganda: Kampala 25 Russia: Khabarovsk 20 Ukraine: Kiev 15 Moscow 10 Uzbekistan: Tashkent 25 Saint Petersburg 15 Venezuela: Caracas 5 Vladivostok 25 Vietnam: Hanoi 25 Yekaterinberg 25 Yemen: Sanaa 25 Rwanda: Kigali 25 Zambia: Lusaka 10
1. Changes since the January 1998 publication are in boldface.
2. In addition to the differential rate shown, employees in Algeria; Bosnia-Herzegovina (except Sarajevo); Burundi and the Great Lakes region of Africa (except Kinshasa); Vukovar area of Croatia; Iraq; Lebanon; and Somalia receive a 25 percent "danger pay" allowance, employees in Albania; Sarajevo, Bosnia-Herzegovina; Cambodia; Central African Republic; Karachi, Pakistan; and Chechnya Province of Russia receive a 20 percent "danger pay" allowance, and employees in Colombia; Kinshasa, Dem. Republic of the Congo; Liberia; Peru; Sudan; and Tajikistan receive a 15 percent "danger pay" allowance.
Note: The cities listed in the table are selected important posts, including all capital cities, where hardship differentials are paid. A complete listing of locations with hardship differential for Federal civilian employees can be found in Section 920 of the Department of State Standardized Regulations (Government Civilians, Foreign Areas), available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.
TECHNICAL NOTES FOR APRIL 1998PART A - LIVING QUARTERS ALLOWANCES
The U.S. Government provides civilian employees recruited in the United States for service in a foreign area with either free governmentacquired housing or a living quarters allowance. The provision of free housing or a quarters allowance enables employees to carry out official duties properly, regardless of housing shortages and related adverse local conditions at some posts. It also represents the principal financial inducement to foreign service. Employees provided government quarters are not charged rent, and employees paid an allowance are reimbursed for rent and utility expenditures up to a maximum U.S. dollar amount. Employees are thereby saved normal housing costs.
The quarters allowance paid each eligible employee is either the amount of actual housing costs or the allowance maximum, whichever is less. Housing costs may vary significantly for families of different income levels and family sizes. In order to cover equitably the housing costs of employees, maximum allowance rates are established for several employee grade levels and family sizes. The allowances are computed and paid in U.S. dollars. Living quarters allowances are established for over 20,000 Federal civilian employees at approximately 200 foreign posts. The annual quarters allowances published quarterly in Table 2 represent selected foreign posts where the number of employees renting private housing is sufficient to provide reliable information on foreign housing costs.
Limitations and Use
Living quarters allowance data are published as a general guide to housing (rent and utility) costs for Americans living abroad. It should be noted that housing costs can vary greatly within the same area due to variations in the types and quality of housing and its location and size.
Private organizations do not generally reimburse their U.S. citizen employees for all foreign rent and utility costs. Such organizations may reimburse employees only for excessive housing costs relative to those of the United States. Foreign housing costs that exceed 15 to 20 percent of an employee's U.S. salary are often considered excessive by many private organizations. Privately employed U.S. citizen residents of a foreign country may be eligible for a Federal income tax exclusion or deduction
from foreign earned income for excessive foreign housing costs. Tax information for U.S. citizens abroad is contained in Internal Revenue Service Publication 54. (The living quarters allowance paid to government civilian employees is not subject to Federal income tax by specific Tax Code provisions.)
Housing Costs Covered
The living quarters allowance rates are intended to substantially cover the typical employee's expenditures for rent, electricity, fuel, and water; taxes levied by the local government and required by law or custom to be paid by the tenant; insurance on the property or furnishings when required by local law to be paid by the lessee; and mandatory agent's fee required by law or custom to be paid to the landlord. The quarters allowance may also include the rental of necessary basic furniture and the rental of garage space for one car. Each of these rental expenses is limited to no more than 25 percent of the maximum allowance. All expenses must be within the maximum allowance established for the employee's grade level and family size.
Employees who occupy a personally owned house or apartment abroad may be reimbursed for up to 10 percent of the original purchase price per year as "rent" plus actual expenses for land rent, and utilities. The total reimbursement to the employee cannot exceed the maximum allowance for which the employee is eligible. After 10 years, only land rent, and utilities expenses are reimbursed.
Allowance Calculation
The maximum quarters allowance amounts are established on the basis of expenditure reports (Form SF1190-Foreign Allowance Application, Grant, and Report) required of all employees occupying private housing. Each post is required to submit these reports annually and may make an interim submission whenever necessary. The information considered in establishing the maximum allowance rates includes the quarters expenditures of U.S. Government civilian employees residing in privately leased housing at the foreign location; changes in quarters costs since the last review, including the expenses of new arrivals; the amount of employee out-of-pocket expenditures; the types and size of quarters occupied by employees. Atypical expenditures, such as for homeowners, shared quarters, old leases with rental amounts significantly below those of current employees, or housing significantly exceeding standard space criteria are omitted from the cost review. Otherwise, no specifications are made concerning the appropriate type of housing. The costs of all houses and apartments, furnished and unfurnished, varying in size and location, are combined in computing the maximum rates.
For review purposes the expenditure reports are arranged into the three allowance groups, according to employee salary grade level. Housing costs, converted into U.S. dollars at the prevailing exchange rate, are then analyzed for each group. In reviewing allowance levels, both arithmetic mean and median expenditures for employees with and without families in each employee group are computed and analyzed. Generally, maximum annual allowances are adjusted so that about threefourths of the employees receiving the allowance and the majority of new arrivals in each quarters group are fully reimbursed for their housing costs. New arrivals are those employees occupying their residence within 6 months of the survey period.
For larger posts, the allowance levels are based primarily on the reported expenditures of employees, with special attention to the expenses incurred by newly arrived employees. The resulting allowance rates are designed to cover 80 percent of the employees for all of their rent and utility expenses. At posts with only a few employees, average expenditures may not be meaningful, and other factors such as the experience of new arrivals and an analysis of the housing market may be more important in reviewing allowance levels.
Living quarters allowance levels are generally increased only after (1) a review has shown that employees have entered into private rental contracts which, with utility costs, exceed the established allowance levels; and (2) analysis has shown that the type and size of quarters are appropriate for single persons and families of different sizes.
Allowance Groups
Allowance maximum rates are established for four groups covering specific salary grade levels in the various Federal civilian personnel systems. As of January 1998, the four groups refer to the following approximate salary ranges (excluding any overseas allowances and premiums):
Group 1 $124,000 - $125,900
Group 2 $ 62,000 - $123,999
Group 3 $ 34,000 - $ 61,999
Group 4 Under $34,000Salary group 1 includes only Ambassadors and Chiefs of Mission, who are almost always provided official governmentleased/owned residences. Consequently, allowance rates are not computed for this group but are prescribed at double the salary group 2 family level. The prescribed maximum allowance rates for salary group 1 are not published.
Within each salary group except group 1, maximum allowances are computed for single persons and for 2person families. The singleperson allowance rate covers employees who have no family living with them. The family rate covers employees who have one family member living with them. For employees who have larger families at the post, the maximum annual allowances for families of 2 persons are increased by the following additional percentages:
Members of Family Additional
(including employee) Percentage
3 to 4 10 percent
5 to 6 20 percent
7 or more 30 percent
In a few cases, employees may receive quarters allowances greater than the maximum for their particular quarters group. Among the employees included in salary group 2 are Deputy Chiefs of Diplomatic Missions and Principal Officers of Consular Establishments, who are required by their positions to obtain quarters suitable for official entertainment. When the group 2 maximum allowance does not cover the cost of housing required for representational events, these individuals may be reimbursed for costs up to 50 percent more than the allowance for two persons, when determined necessary by the Chief of Mission. In addition, employees in group 4, who have 15 years or more of government service, may be placed in salary group 3 at the discretion of the head of the Federal agency. This permits the discretionary use of the higher allowance rate for specific employees who rise in seniority and responsibility at a post abroad.
Adjustments For Exchange Rates
The quarters allowances are computed and paid in U.S. dollars, even though actual payments by employees for rent and utilities are generally made in foreign currency. Therefore, whenever currency exchange rates change significantly, the U.S. dollar allowances must be revised in order to provide employees with the same purchasing power in foreign currency.
The exchange rates used to calculate the allowances are reviewed regularly by the Office of Allowances. When significant changes occur, the allowance maximum rates are adjusted. The quarterly publication includes these interim allowance adjustments as well as allowance revisions based on annual or interim housing expenditure reports. The foreign currency exchange rates used to calculate the allowances are published along with the allowance rates. Allowance levels are not routinely adjusted in countries with high rates of local inflation or where U.S. dollar leases or advance rent payments are common.
Survey Locations
Living quarters allowances are published for foreign posts where a sufficient number of employees rent private housing to provide adequate information on local housing costs. Foreign cities where all employees occupy government-provided housing or only a few employees rent private housing are not included in Table 2.
The published allowances should not be used as indicators of housing costs for other cities in a country without appropriate caution, because housing costs can vary greatly from city to city within the same country according to the availability of adequate housing. Furthermore, because housing costs can differ significantly from the overall costs of other goods and services, the indexes of living costs abroad should not be used as indicators of housing costs for cities not published. For example, at some posts where the overall cost of living is well below the Washington D.C. level, housing costs may be relatively high because of severe shortages of adequate dwelling units.
The Government Program
The living quarters allowance program is administered for all Federal agencies through the Department of State Standardized Regulations (Government Civilians, Foreign Areas). Employee eligibility for the allowance is described in Section 031.1. The submission of required and voluntary housing reports is explained in Section 077.2. General regulations relating to the payment of the allowance are included in Section 130. The living quarters allowance rates established for all foreign posts are listed in Section 920, which is published every 4 weeks. The Standardized Regulations are available by subscription from the U.S. Government Printing Office. A sample copy of Section 920 may be requested from the Office of Allowances.
PART B INDEXES OF LIVING COSTS ABROAD
Adjustment for Exchange Rate Changes
Department of State indexes of living costs abroad are computed at the currency exchange rate in effect as of the date of survey or index computation. Salaries and cost-of-living allowances for Americans employed abroad are generally established in U.S. dollars. For this reason, periodic allowance revisions for currency fluctuations are usually necessary to provide employees with the same purchasing power until new survey results are available and published. New survey indexes will reflect inflation abroad and in Washington, D.C., as well as more current exchange rate data. Foreign currency exchange rates are reviewed regularly by the Office of Allowances. When the exchange rate for a country has changed enough to alter the government post allowance, the U.S. Government index is recomputed and the post allowance appropriately revised. The Department of State does not publish these interim U.S. Government indexes or any comparable local index adjustments. Current post allowance levels for Federal civilian employees are published in Section 920 of the Department of State Standardized Regulations (Government Civilians, Foreign Areas). All indexes in Table 1 are original survey indexes computed by the Office of Allowances on the basis of Retail Price Schedule submissions.
The local index can be recomputed to approximate the effects of a new exchange rate by holding constant the 15 percentage points of the local index that represent consumer expenditures outside the foreign country of assignment. These items include some vacation expenses, automobile purchase, medical insurance, and household furnishings. The suggested recomputation method limits the exchange rate adjustment to those expenditures typically made in local currency. The following formula can be used to show approximately what the local index would have been at the original survey date had all prices been converted to U.S. dollars at the new exchange rate:
Suggested formula:
New local index =
15 + ( (local index - 15) X (local index exchange rate)/ (new exchange rate) )
Example: The December 1996 local index for Brussels is 151, at the exchange rate of Franc 31.9. The following calculations would be performed to recompute this index to Franc 35.4:
= 15 + ( (151-15) X (31.9/ 35.4) )
= 15 + (136 x 0.9011)
= 15 + 123
at Franc 35.4 = 138
For posts in countries with very high rates of inflation, allowances may not warrant a reduction for currency exchange rate changes. However, a substantial devaluation may require some interim allowance adjustment until a new price survey is received and reviewed.
The U.S. Government index cannot be recomputed using this simple formula because the government index generally reflects non-local currency purchases to a greater extent, and these costs must be held constant when adjusting for new exchange rates. The Office of Allowances recomputes the U.S. Government index by determining the exact proportion of total expenditures that are made in local currency and adjusting only that amount for the change in exchange rates. The resulting U.S. Government allowance levels are published in the Department of State Standardized Regulations (Government Civilians, Foreign Areas) every 4 weeks.
A complete and accurate interim allowance revision would require an index adjustment for: (1) the new exchange rate; (2) the probable effect of the revaluation on prices of imported goods purchased locally by Americans and on American purchasing patterns; and (3) price changes at the foreign post relative to price changes in Washington, D.C., since the last survey. The full effects of a currency revaluation are not immediately apparent and may not be known for several months. Furthermore, correction for relative price changes since the previous survey date cannot be made easily. Using the relative trends in national Consumer Price Indexes can produce an interim adjusted index significantly at variance with new survey results because survey items, expenditure weights, and retail outlets sampled for the national Consumer Price Index are not usually comparable to those for the American living cost measures. Under these circumstances, there are no truly reliable interim indexes of living costs until the foreign post completes a new Retail Price Schedule and the Office of Allowances computes new indexes.
The Payment of Cost-of-Living Allowances
The U.S. Government pays a cost-of-living allowance to its American civilian employees at foreign locations where the post allowance index is 103 or above.
The post allowance is calculated by applying the index to each employee's spendable income. Spendable income is defined by the Department of State as that portion of base salary available to an employee for the purchase of food, household operations, home furnishings and equipment (including telephone), apparel, transportation (including auto operations and purchase), health care, entertainment, personal care items, reading material, education, alcohol, tobacco, and miscellaneous goods and services.
To avoid minor adjustments in allowance payments, post allowance indexes are grouped into ranges, and the percentages to be applied to spendable income are based on the approximate midpoints of each index range. The percents applied to spendable income used by the government are shown in Table A.
The following example illustrates the necessary steps to determine a cost-of-living allowance for a family of three with an annual salary of $50,000, at a location with a local index of 158 (Washington, D.C. = 100):
(1) Percent to be applied to spendable income is 60 percent (Table A).
(2) Spendable income for a family of three at the $50,000 salary level is $24,600 (Table B).
(3) Annual cost-of-living allowance is 60 percent times $24,600 = $14,760.
Table A: Local Cost-of-Living Index and Percent Applied
to Spendable Income to Determine Post Allowance
| Local Index | Percent applied to spendabel income | Local Index | Percent applied to spendable income |
| 103-107 | 5 | 166-175 | 70 |
| 108-112 | 10 | 176-185 | 80 |
| 113-117 | 15 | 186-195 | 90 |
| 118-122 | 20 | 196-205 | 100 |
| 123-127 | 25 | 206-215 | 110 |
| 128-132 | 30 | 216-225 | 120 |
| 133-137 | 35 | 226-235 | 130 |
| 138-145 | 42 | 236-245 | 140 |
| 146-155 | 50 | 246-255 | 150 |
| 156-165 | 60 | 256-265 | 160 |
The spendable income table used by the Department of State, as of October 6, 1991, is shown in Table B. This table was developed by the Department of State, using consumer expenditure data for all urban U.S. families from Bureau of Labor Statistics data for 1987-88, with detailed tabulations for income ranges up to $90,000 and above.
Table B. Average Annual Spendable Income by Salary and Family Size
|
|
|||||||
| Annual Base Salary | One | Two | Three | Four | Five | Six or More | |
| $139,000 and over | $31,700 | $35,600 | $39,600 | $41,600 | $45,500 | $47,500 | |
| 132,000--138,900 | 31,600 | 35,500 | 39,500 | 41,500 | 45,400 | 47,400 | |
| 125,000--131,999 | 31,400 | 35,300 | 39,200 | 41,200 | 45,100 | 47,000 | |
| 118,000--124,999 | 31,000 | 34,800 | 38,700 | 40,600 | 44,500 | 46,400 | |
| 112,000--117,999 | 30,600 | 34,400 | 38,200 | 40,100 | 43,900 | 45,800 | |
| 106,000--111,999 | 30,000 | 33,800 | 37,500 | 39,400 | 43,100 | 45,000 | |
| 100,000--105,999 | 29,400 | 33,100 | 36,800 | 38,600 | 42,300 | 44,200 | |
| 95,000--99,999 | 28,800 | 32,400 | 36,000 | 37,800 | 41,400 | 43,200 | |
| 90,000--94,999 | 28,200 | 31,700 | 35,200 | 37,000 | 40,500 | 42,200 | |
| 85,000--89,999 | 27,400 | 30,900 | 34,300 | 36,000 | 39,400 | 41,200 | |
| 80,000--84,999 | 26,600 | 30,000 | 33,300 | 35,000 | 38,300 | 40,000 | |
| 75,000--79,999 | 25,800 | 29,000 | 32,200 | 33,800 | 37,000 | 38,600 | |
| 71,000--74,999 | 25,000 | 28,100 | 31,200 | 32,800 | 35,900 | 37,400 | |
| 67,000--70,999 | 24,200 | 27,200 | 30,200 | 31,700 | 34,700 | 36,200 | |
| 63,000--66,999 | 23,400 | 26,300 | 29,200 | 30,700 | 33,600 | 35,000 | |
| 59,000--62,999 | 22,500 | 25,300 | 28,100 | 29,500 | 32,300 | 33,700 | |
| 55,000--58,999 | 21,500 | 24,200 | 26,900 | 28,200 | 30,900 | 32,300 | |
| 51,000--54,999 | 20,600 | 23,100 | 25,700 | 27,000 | 29,600 | 30,800 | |
| 48,000--50,999 | 19,700 | 22,100 | 24,600 | 25,800 | 28,300 | 29,500 | |
| 45,000--47,999 | 19,000 | 21,300 | 23,700 | 24,900 | 27,300 | 28,400 | |
| 42,000--44,999 | 18,200 | 20,400 | 22,700 | 23,800 | 26,100 | 27,200 | |
| 39,000--41,999 | 17,400 | 19,500 | 21,700 | 22,800 | 25,000 | 26,000 | |
| 36,000--38,999 | 16,500 | 18,500 | 20,600 | 21,600 | 23,700 | 24,700 | |
| 33,000--35,999 | 15,600 | 17,600 | 19,500 | 20,500 | 22,400 | 23,400 | |
| 30,000--32,999 | 14,700 | 16,600 | 18,400 | 19,300 | 21,200 | 22,100 | |
| 28,000--29,999 | 13,900 | 15,700 | 17,400 | 18,300 | 20,000 | 20,900 | |
| 26,000--27,999 | 13,400 | 15,000 | 16,700 | 17,500 | 19,200 | 20,000 | |
| 24,000--25,999 | 12,700 | 14,300 | 15,900 | 16,700 | 18,300 | 19,100 | |
| 22,000--23,999 | 12,100 | 13,600 | 15,100 | 15,900 | 17,400 | 18,100 | |
| 20,000--21,999 | 11,400 | 12,800 | 14,200 | 14,900 | 16,300 | 17,000 | |
| 18,000--19,999 | 10,700 | 12,100 | 13,400 | 14,100 | 15,400 | 16,100 | |
| 16,000--17,999 | 10,100 | 11,300 | 12,600 | 13,200 | 14,500 | 15,100 | |
| 14,000--15,999 | 9,400 | 10,500 | 11,700 | 12,300 | 13,500 | 14,000 | |
| Under 14,000 | 8,600 | 9,700 | 10,800 | 11,300 | 12,400 | 13,000 | |
[End of Document]