Teach Abroad Finances What You Need to Know

Teach Abroad Finances: What You Need to Know

Is money keeping you from chasing your dream of teaching English abroad? Are you curious how teachers are able to live and travel abroad without going broke? In this post, I’ll share what you need to know about teach abroad finances.

Disclaimer: I am not a financial advisor or tax accountant. I can only speak from my experience as someone who has been living abroad for over 10 years. Additionally, this post contains affiliate links. That means that if you choose to make a purchase using one of my links, I receive a small commission – at no extra cost to you. Thank you for supporting this blog!

Salaries when teaching English abroad

Teach Abroad Finances: Salaries Abroad

To begin, how much do teachers abroad actually make? Well, it depends on the country and program or school.

According to gooverseas.com, the countries with the highest salaries for English teachers are: the United Arab Emirates ($3,500-5,500 USD per month), Japan ($2,200-5,000 USD per month), Saudi Arabia ($3,000-4,000 USD per month), Kuwait ($2,600-4,000 USD per month) and Oman ($2,000-3,500 USD per month). Keep in mind that to earn the highest salary, you’ll most likely need a bachelor’s degree or higher, a TEFL certificate and some previous teaching experience. 

In general, you’ll earn a better salary when working at an accredited International school than local public or private schools. If you are a certified teacher, I highly recommend checking out international schools. You can go through an agency like Search Associates or ISS.

If you’re just teaching with a bachelor’s degree and a TEFL, you can still make decent money depending on where you’re teaching. In general, expect to earn higher salaries in South Korea, Japan, China, Taiwan, Hong Kong, the Middle East, and English speaking countries like the US, Australia, Canada and New Zealand. Salaries in Western Europe are average, and the lowest salaries are found in Central and South America, Eastern Europe, South East Asia and Africa.

It’s also important to consider how many hours per week you’ll be teaching. Places like Japan and South Korea have long teaching schedules, while European countries offer lower salaries but fewer teaching hours.

Teach Abroad Money Tip

For teachers trying to save money, compare the monthly salary with the cost of living in your new country. You can use a website like Numbeo.com to do this. 

My Experience with Salaries Abroad

My highest paid salary was teaching English in Australia. I earned around $52 AUD per hour plus a percentage towards my retirement account. I was hired as a casual worker so I was paid hourly.

In second place was working at an international school in Spain. I earned 24,000 euros per year before tax. 

In some of the English language assistant programs I did in Spain I technically earned a stipend instead of a salary. I earned between 1,000 and 1,400 euros per month depending on the program.

I got scholarships to teach and study in both Costa Rica and Egypt, so I was essentially paid to volunteer. Check out this article to find out how I got grants and scholarships to go abroad for free.

To learn about all the different ways you can teach English abroad, make sure to download my FREE Teach Abroad Quick Start Guide.

Expenses for teaching English abroad

Teach Abroad Finances: Expenses

Another important aspect of teach abroad finances is expenses. Moving your entire life abroad is going to come with some expenses. Here are some things to consider as your plan your teach abroad adventure:

  • Storage for anything you don’t want to bring abroad – you can either buy a storage unit or keep things with family and friends. It’s usually not a good idea to bring all your possessions abroad with you unless you plan on being there for many years.
  • Flights – some teaching programs and schools (especially international schools) will pay for your flights or reimburse you as part of your contract and benefits package. However, not all programs or schools do this, so save some money for your flight to and from the country. 
  • Costs related to housing – again, some schools or programs provide their teachers with housing. If this isn’t part of your contract, then set aside some money for a security deposit and the first month or so of rent.
  • Money for settling in – set aside some money in case your housing abroad isn’t furnished. Likewise, it’s often cheaper to buy new clothing, appliances, electronics, etc. in your new country than bringing everything with you. I like to buy anything that uses a plug in my new country so I don’t have any issues with converting electricity. 

How to Determine How Much Money to Save Before Going Abroad

First, make sure you know everything that is included in your contract and what you’ll need to pay for. Write down expenses that you’ll need to cover in a spreadsheet.

Then, go to numbeo.com and check for the cost of living in the city where you’ll be working. Try to save at least 2-3 months worth of rent and expenses before you go to make the transition easier. As I mentioned before, if you want to save money, make sure that your salary is greater than the cost of living in your new country. This will help keep your teach abroad finances in check! 

My Experience with Moving Expenses Abroad

I must admit that I’m a bit of a nomad and minimalist. Everytime I move to another country, I sell the majority of my possessions and store the rest with friends and family. I currently have possessions on 4 continents! 

I usually travel to my new country with one or two suitcases and have family and friends bring things to me when they visit if I feel like I really need them. However, the more you live abroad, the more you’ll see how easy it is to live with less.

I personally track my expenses each month and set aside any money I’ll need when transitioning to a new country.

Converting money abroad using Transferwise

Teach Abroad Finances: Converting Money & Bank Accounts

Another money matter when moving abroad is international banking and converting money. If this is your first time abroad, here’s a warning for you: don’t rely on banks to convert your salary – you will lose a lot of money in fees and high exchange rates.

The best way to convert your foreign salary to your “home” currency is to use Wise (formerly called Transferwise.) Wise has the lowest exchange rates of any currency exchange I’ve come across and has great features to help you convert, store and use local and foreign currency.

If you are still needing to pay off student loans or other expenses back home, then using Wise is a great way to get the cash you need in your account.

How to Use Wise (Transferwise) to Convert Your Salary

  1. Set up a local bank account in your new country – ask locals for recommendations and also be aware that some banks offer accounts for young people with reduced fees. 
  2. Get your salary deposited into your foreign bank account
  3. Apply for a Wise accountyou can use this link to get started
  4. Connect your “home” and “foreign” bank accounts to Wise – follow the steps on the website or app to connect your bank accounts to Wise
  5. Transfer money whenever you need using Wise – you’ll see how much you are being charged (a small fee) and the exchange rate Wise is using (which is always WAY better than PayPal)
  6. Your money will be sent to your home bank account

I have used Wise for years and also use it to convert the money I make from online teaching. There is also a handy feature that allows you to store and use a variety of foreign currencies which is great if you travel a lot or do international business.

Paying taxes when teaching abroad

Teach Abroad Finances: Paying Tax Abroad (and at home if you’re from the US!)

So just to remind you, I’m not a tax accountant, but I can tell you about my personal experience paying tax abroad. Paying tax is an essential part of teach abroad finances. The US is one of only two countries in the world that double taxes their citizens abroad! 

Like I previously mentioned, teach abroad programs sometimes pay their teachers a stipend instead of a salary. In some cases, this stipend isn’t taxed. You’ll have to check with the program.

If you are in another country long enough to be considered a tax resident, then you will be taxed in that country. However, you still need to file your taxes each year with the IRS if you are an American citizen or green card holder.

For example, for the past 5 years I’ve been living and working in Australia as a teacher. I pay yearly taxes to the Australian government because I am a tax resident here. However, I must also file my US taxes each year. I am able to claim some deductions based on foreign earned income. Please contact a certified tax account to find out how to do this.

Because tax periods are different for different countries, one year I had to file taxes in three countries: the US, Spain and Australia. And you thought filing taxes once a year was annoying!

Supplementing income abroad

Teach Abroad Finances: Supplementing Your Income Abroad

So how do teachers finance all their travels during school vacations and between teaching contracts? They always seem to be traveling and living their best life! Hint: they supplement their income. Here are two ways to use your skills as an English teacher to start a teach abroad side hustle.

  • Teach English online: teaching English online is a great way to earn some extra cash during after school hours, weekends, days off or holidays.

Check out this blog post on why I recommend teaching English online while teaching ESL abroad.

I currently make around $90USD an hour teaching online with Outschool while living abroad in Australia.

  • Work as a private tutor: Chances are, there are people in your new country who are looking for private English classes. You can set your own rates, choose your schedule and what you teach. Try teaching conversation lessons (low-prep), Business English if you have the required skills (pays well) or small group kids classes.

When living in Spain, I taught private lessons to both children and adults. I went to my students’ houses and taught everything from speaking lessons to playing in English to business English to test prep. It was a great way to meet local families and learn about their culture through different activities. I used all my tutoring money to fund my European, North African and South East Asian travels.

If you’re entrepreneurial, then you can also set up a passive income stream or two to help fund your travels or extra expenses abroad. 

Final Thoughts

Teach abroad finances are tricky. My best advice is to create a budget based on the cost of living in your new country and ensure that you are receiving a fair salary before signing the contract. Set up a passive income stream before you go abroad or supplement with private lessons once you’re abroad and you’ll be able to be one of those traveling teachers.

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Thanks for visiting ESL Teacher 365!

Thanks for visiting ESL Teacher 365!

Certified Teacher & Founder of ESL Teacher 365

I am passionate about helping people teach abroad & online so they can live a life of adventure!

I’ve taught in 6 different countries and love sharing my teach abroad (and online) tips and tricks.

The world is yours to teach and explore!

– Jamie


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