Salary Arbitrage - Tip for Working Remotely and how Remote Workers can Leverage it
3 min read

Salary Arbitrage - Tip for Working Remotely and how Remote Workers can Leverage it

Salary Arbitrage is a valuable hack for working remotely. Learn how you can leverage it to reap more value off the money you earn from remote work.
Salary Arbitrage - Tip for Working Remotely and how Remote Workers can Leverage it

The emergence of the pandemic forced employers to allow workers to work remotely. This was a huge step contributing to change the entire employment system. The possibility of working remotely introduced more employment opportunities all over the globe.

Although, initially, employees had to attend the office, this tradition has changed through the past few years. People can now work from the comfort of their home. And employers can now hire without the expense of managing an office.

The Untapped Tip for Working Remotely

Remote employment opportunities, in its sheer concept, are win-win for employers and workers. But there’s an untapped tip for working remotely. Something that remote workers can leverage to drive out more value off the money they earn - Salary Arbitrage.

One of the most asked questions about remote working opportunities is if someone is able to work remotely in another country. Working remotely means you are not bound by your, or your company’s location. This enables you to work remotely for the best companies across the world. This means they don't require you to even step outside your home.

Ultimately, remote employment opportunities will allow a remote worker to work for different companies in different countries. Although a remote worker might be working for a foreign country, they get to work from home, eliminating the cost and time required for commuting.

While working remotely sounds sweet in its entirety, salary arbitrage is an untapped opportunity in remote employment that not many people have thought about.

What is Salary Arbitrage in Remote Employment Opportunities?

Remote workers living in countries where cost of living is cheap can find remote work in countries where salaries are much higher. Some employers may adapt their wages depending on the country of each employee, but even in this case it would likely be an already higher pay than local companies, in a poorer country with an underdeveloped economy.

For example, the federal minimum wage in the United States is $7.25 per hour . If a company in the US hires a remote worker in a poorer country, like India ,and agrees to the $7.25 hourly rate, it will actually be 3.5 times the minimum daily wage of India, which is $2.15 per day. That’s massive!

Employers in high paying countries (US, UK, Australia, Germany, etc) usually pay the average wage of their country for remote employment. While in poorer countries, like India, Brazil, Mexico, etc., this could propel digital workers into a range in the top 1% salaries for their local economy.

For a knowledge worker living in a poorer country, remote employment opportunities, coupled with the idea of salary arbitrage, can get them higher living standards by earning a much higher salary. For someone from a richer country, they can squeeze out more value off the money they earn by moving to a cheaper country with a high quality of life and still work remotely for a richer country earning their high salary. In both cases, living in a country with lower cost of living but working for a company based in a high salary economy can get a remote worker higher living standards.

Most remote workers mention avoiding commute, and comfort as the best parts of working remotely. However, salary arbitrage is often overlooked, and most digital workers are ignoring a great way to earn or save more money. Since some of the best companies with remote jobs operate in richer economies, salary arbitrage offers remote workers in poorer countries a better way to develop their skills with the best companies while still earning relatively a lot.

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