Moving to a country with lower living costs can lead an employer to reduce your pay. This guide explains how employers set pay by location and how to work out what the move is worth to you. It also covers what to ask for during the talk, plus the tax and legal points that can change the offer.
How to Negotiate Your Pay Before You Move
1. Find out how your employer sets pay by location
Employers use a few methods to set pay for remote staff. Pave, a compensation data company, describes three common ones.
- Employee location-based pay: Pay follows the place where you live. Pave calls this the most common method.
- Office-anchored pay: Pay follows the nearest company office, often within a set distance such as 50 miles. A move to another country may fall outside that rule, so the employer has to choose another one.
- National remote rate: The company sets one remote pay range, usually 85% to 90% of its highest-cost location.
Some remote-first employers pay one rate everywhere. Research summarized by Slasify says about 30% of organizations still pay a single headquarters-based rate, down from about 37% before the pandemic.
Surveys differ on how common location-based pay is. Pave data shows 88% of companies consider location when they set pay, while older surveys put the share between 62% and 72%. Whatever the exact figure, most employers have some rule, so asking for it is reasonable.
Ask HR or your manager for the answers to three questions in writing.
- Which method applies to a move to another country?
- Does the change use your country or a group of countries?
- When would a change in pay start?
Pave also notes that voluntary moves usually lead to the pay rate of the new location. Moves requested by the company often keep the higher of the two rates. Because you are choosing the move, expect the first rule unless you negotiate.
2. Learn what the employer is measuring
Most employers base location pay on the cost of labor. Cost of labor means what employers in a market pay for the same job. Cost of living, which covers rent and groceries, usually plays a smaller part.
Pave says pay differentials rest mainly on the cost of labor. Employers surveyed by WorldatWork said the same, according to SHRM. Pave also describes a blended method that weights market data at 70%, cost of labor indexes at 20%, and cost of living at 10%.
GitLab, a fully remote company, says in its handbook that its pay ranges come from cost of labor data for each country. All team members can see their own range for their location.
In a country with lower living costs, local pay for your role may also be lower. An argument based on local pay data can therefore work against you. A stronger case rests on the value of your work to the company.
3. Work out what the move is worth to you
Before any talk, calculate how much you gain or lose after the pay change. Gather five numbers.
- Current yearly costs: Add up rent, food, transport, and insurance.
- New yearly costs: Compare cities with a tool such as Numbeo, then check real rent listings in the new city.
- Pay after a likely cut: Use the range you build in step 4.
- Taxes: Rules depend on where you live and on your passport. FlyBibe has guides on how US citizens file taxes while working abroad, plus UK tax rules and Canadian tax rules for nomads.
- Currency: Ask whether your pay arrives in your current currency or in local currency. Changes in exchange rates can reduce the savings from a cheaper country.
Here is an example with made-up numbers. Suppose you earn $120,000 and spend $4,500 per month. Your new city costs $2,200 per month, which saves $27,600 per year. A 15% pay cut costs $18,000 per year, so you would still be about $9,600 ahead before taxes.
Fast Company notes that a move to a place with lower income taxes can offset part of a pay cut. Estimate the tax change before you start the talk.
4. Set three numbers before the talk
Write down three figures so you can respond calmly to any offer.
- Target: Your current pay, or a very small cut.
- Acceptable: The lowest pay you would accept happily, based on your math in step 3.
- Walk-away: The pay below which the move no longer makes sense. Some visas also set a minimum income, so check visa income requirements before you accept a lower number.
Typical pay differentials can help you set the middle figure. Pave gives these examples for a $120,000 baseline salary.
- Strong secondary markets: 90% to 95% of baseline, or $108,000 to $114,000.
- Emerging markets: 80% to 85% of baseline, or $96,000 to $102,000.
- Austin and Nashville: 13% and 16% below San Francisco, or $104,400 and $100,800.
The examples above come from US cities. Differences between countries may be larger. Fast Company reported that Google employees moving to cheaper cities could see cuts as high as 25%.
5. Make your case with results and time zone fit
A clear case tied to your work usually helps. Bring four points to the talk.
- Results: List outcomes from the past year, with numbers where possible.
- Role value: Explain that your output stays the same wherever you work.
- Time zone overlap: GitLab lists time zone among the factors that can matter in its pay and hiring decisions. If your new location overlaps well with the team’s hours, say so.
- A middle option: Offer a smaller cut, or a cut that phases in over six to twelve months.
Here is sample wording you can adjust.
I plan to move to [country]. My hours and my work will stay the same. I would like to keep my current pay, or agree on a smaller adjustment based on my results.
6. Ask for other items if base pay is fixed
Base pay often sits inside a set band, but other items can fall outside the formula. Several guides suggest asking for these.
- Signing or relocation bonus: A one-time payment can be easier to approve than a higher base salary. It does not change ongoing payroll.
- Written review date: Glassdoor suggests asking for a written agreement to review pay again in six months.
- Extra paid time off: More vacation days cost the employer little and help you in daily life.
- Home office or learning budget: Both are common items in remote offers.
- Health coverage abroad: Ask whether the company plan works in your new country, or whether the company can add a stipend. See health insurance plans for nomads for options.
Get all agreed items in writing. Robert Half advises asking for the details of the package in writing, including special arrangements such as a signing bonus.
7. Check tax and legal rules before you agree
Your employer may have legal reasons to adjust the offer or to say no. Review these points first.
- Company tax exposure: According to Deel, a 2025 update to the OECD Model Tax Convention added a 50% working time benchmark. A home office abroad used for more than half of working time may count as a fixed place of business for the employer. Access Financial notes that using an employer of record does not remove all of this risk.
- Personal tax residency: Access Financial also explains that a 183-day stay can make you tax resident abroad. Your tax residency and your employer’s tax exposure are judged separately.
- Contract changes: Relocate.World says employers often review pay to keep it fair, control costs, and meet local labor and tax rules. If the employer moves you to an employer of record, ask whether pay and benefits change.
- Visa status: Check that your visa allows remote work. FlyBibe explains the difference between a digital nomad visa or tourist visa for remote workers.
Tax rules vary by country and by passport, so a tax professional can confirm the details for your case.
Moving Before the Terms Are Agreed
A common error is moving first and negotiating later. Countrytaxcalc points out that an employer can face tax exposure when an employee works abroad without the employer knowing. Telling HR early protects both sides, and it gives you a chance to agree on terms before the new pay rule applies.
If your employer has not yet approved remote work from abroad, start with how to negotiate a permanent remote work arrangement.
Pay policies also differ widely between companies. According to Truly Remote Work, employers that pay global market rates often pay remote workers more than local peers earn. Employers that adjust pay by location may pay workers in lower-cost countries much less for the same work. If your employer will not move on pay, browsing remote job boards can show which companies use global pay.
The article gives general information and is not legal, tax, or financial advice. A qualified professional can review your individual situation.
Plan Your Move With Your Numbers in Hand
A fair pay agreement makes a move to a cheaper country easier to enjoy. With your numbers, your case, and a written agreement ready, the next step is choosing where to live. Search flights on FlyBibe to compare cities that fit your new budget. FlyBibe filters for wifi reliability, time zone overlap, visa rules, and safety, so the details that matter for remote work are already checked when you book.