Hong Kong salaries for managers and professionals are among the highest in the world, a survey by benefits consultants Watson Wyatt shows. Based on those surveyed, the average pay packet for some positions, such as sales managers, easily outpaces those in the United States and is up to five times the rate in Shanghai. The pay difference between local employees and the equivalent overseas workers is even greater when the territory's low tax rate is taken into account. For example, the highest marginal income tax rate in Britain is 40 per cent before the payment of National Insurance contributions and capital gains taxes. This compares to a top rate of 15 per cent in the territory. But the high cost of labour, coupled with expensive housing and living costs, has raised concern that the territory could lose its competitive edge to other regional centres which offer international companies lower costs. The survey finds that only senior managers in the United States take home more money each month. Watson Wyatt managing director Paula DeLisle said: 'Wages in Hong Kong are higher than everywhere except maybe the United States. You may find specific exceptions, but, overall, Hong Kong salaries are extremely high.' The survey compares total remuneration packages, including salary, bonuses and all other cash compensation. For example, a sales manager in Hong Kong earns about US$105,400 - more than 25 per cent higher than a US manager and nearly five times the pay of a Shanghai manager. A systems analyst is likely to earn about $46,300 in the territory, less than the $48,600 paid to a US employer, but four times the amount on offer in the mainland. Compared with other mainland centres, the wages in Shanghai are high at 20 per cent of the pay in Hong Kong. Ms DeLisle said: 'The gap may not last long, however. During the past three years, the average salary in the mainland has increased 92 per cent, compared with just more than 30 per cent for Hong Kong. 'While wages are lower, the output of foreign employees is low as well. 'Most employees come from state-run enterprises where things like teamwork, initiative and risk-taking were neither encouraged nor rewarded. 'So productivity is generally lower than in Hong Kong or Western countries.' She said this meant that in many cases foreign employers had to make use of expatriates for critical positions.