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I'm currently living in Germany, but have a Chinese employer. I've got an account in both countries (ICBC in China and Sparkasse in Germany), and get my salary paid in RMB to my Chinese account, and can easily access it from Germany (for example by ATM).

Now I'm going to get a travel allowance, which is a fixed Euro amount. I have the option to get it paid as Euros or as RMB to my Chinese account. (It is paid monthly, and if I choose RMB it will be calculated each month according to the current rates.)

What is more beneficial for me, to get it as EUR or RMB? The Chinese account it goes onto is held in RMB, and I will want to have EUR in the end in any case. It seems it shouldn't make a difference, but I am afraid the conversion might cost more one way or the other.

  • If I get paid in EUR, my employer gets X €, brings it to the bank, there it gets traded for RMB, and when I withdraw EUR it gets traded again.

  • If I get paid in RMB, my employer looks up the current rate, gets the amount of RMB corresponding to EUR, and brings it to the bank. The only trade is when I withdraw money. It seems like this case would cost less fees, but I don't know.

Additionally, if I can convince them to wire the X € directly to my German Sparkasse account, that would be the best option (with respect to fees, and to availability), right? Or are there hidden pitfalls there, too?

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  • I don't think Way #1 is nrcessarily true. Since your employer is a Chinese company they must have ample RMB reserve cash, so they do not need to bring actual Euro to the bank and convert them just for you. They should take forex market at 0.02% spread and multiply the amount due, avoiding the exchange fee/spread.
    – base64
    Aug 25 '15 at 13:02
  • @base64: Sure, that's what I would think, but then I don't understand the difference between the two options I was given. What does it mean to "pay 1000€" to an RMB account as opposed to "pay 1000€ worth of RMB" to the same account? It was suggested that it might be "more convenient" for me to get it as euros, but since I get it on my Chinese account and not in cash, I don't see a difference.
    – jdm
    Aug 25 '15 at 13:09
  • "pay 1000€" to an RMB account" means the spread is set by ICBC. "pay 1000€ worth of RMB" means the spread is madeup by your employer.
    – base64
    Aug 25 '15 at 14:40
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Always go with the option that avoids currency conversion.

Best Option: Get paid in Euro at your German bank account.

You mentioned "current rates" twice in your question. What you missed is the spread offered by (1) Your employer's bank and your employer (2) Your ICBC in China (3) Your German bank. Is it 0.02%? 0.5%? 1%? 2%, 2.5%? For ICBC it is likely around 2%.

The fee for receiving SWIFT at your German Bank is competitive, but the spread offered banks is not.

Even if your employer is willing to calculate RMB amounts using "current rates", how can you be sure that they are using USDCNH then EURUSD, or some indicative EURCNY that your employer believes to be fair (but a ripoff to you).

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  • 1
    Thanks, so without more information I can't really say which of the two is better. I guess my employer will just look up the conversion rate naively, while I'm sure the bank will include ~2% spread. You're right, the sanest solution is to just get them to pay it to the German account.
    – jdm
    Aug 25 '15 at 15:57

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