Moving on from our last case study looking at working remote from Istanbul, we now compare the relativities of people in London and Warsaw seeking sunnier climes in either Madrid or Lisbon.
Madrid, famed for its glamorous and fashionable boulevards, quaint tapas bars and relatively low cost of living is an obvious choice, particularly for Spanish speakers. Lisbon is more famous for its historical vibe, cobbled streets, steep hills and of course the wonderful pastel de nata. But are these reasons enough to allow them to be considered as a viable remote work locations? And how does the compensation stack up?
How does London to compare to Madrid vs Portugal
Here we assume the person earns around GBP 50,000 at home and if supported by the business the company would be seeking to pay around EUR 60,000 in the new host location. By running the numbers using AIRINC’s Remote Work Salary Evaluation Calculator we can quickly see where the differences lie.
London to Madrid and Lisbon
In both cases someone earning GBP 50k in London would need around EUR 54k in Madrid or Lisbon to protect their London purchase power. But they are not for the same reasons, as cost of living and housing are more expensive in Madrid than Lisbon, but taxes are lower. Both are less expensive than London.
How does Poland compare to Madrid vs Lisbon?
Finally, if we completed the same analysis for someone considering moving from Poland to Madrid or Lisbon.
Poland to Madrid and Lisbon
In both cases, someone earning PLN 280,000 in Warsaw would need around EUR 85k in Madrid or Lisbon to have an equivalent purchasing power. But they are not for the same reasons again, as cost of living and housing are more expensive in Madrid than Lisbon, but taxes are lower. But both are more expensive than Warsaw.
How do you calculate remote work compensation?
The interesting part on this calculation is that if the company did not wish to increase the salary to reflect the significant difference in purchasing power and because this is an employee-initiated request, then the employee would need to decide how important it is to work remotely from that location. Also, the home base is always the starting point, someone in London will have higher base costs than someone in Poland. Next time we will consider US domestic move from New York to Denver. Stay tuned!
