What is expatriate compensation

These include: home-based approach also known as the balance sheet approach , the host-based approach, and the global market approach. And one of the greatest challenges is determining which method is best for your organization. The balance sheet approach provides international employees with an expatriate compensation package that equalizes cost differences between the international assignment and the same assignment in the home country of the individual or the organization.

The balance sheet approach is based on some key assumptions and is designed to protect expatriations from cost differences between their home and host countries. The host-based approach means the assignee transfers to the host country payroll and receives base and incentive pay based on host country compensation practices and regulations.

There are limited, if any, assignment related allowances. The host payroll typically delivers base pay and incentive pay and above-base allowances. With organizations looking for cost-cutting opportunities, they have looked to localize assignees. The host-based approach may be a cost-effective option to the traditional home-based approach, including local plus policy components.

Difficulties can occur in repatriating assignees, if applying this approach, because it integrates employees into the local host salary structure. It can make it very difficult to move the assignees to another destination or back to their home country. Unlike the balance-sheet approach, a global market approach to expatriate compensation requires the international assignment be viewed as continuous, even though the assignment may be for various periods of time and the employee may be in various countries.

All assignees are on the equivalent compensation scale, regardless of their home country. Depending on the policies for which provision is made by the employer, removal costs, education expenses for children and transportation may also be covered. A range of additional services may be offered to the employee. Often outsourced, immigration services, settling in assistance, tax formalities, intercultural training and language classes can represent significant fees for the employer.

It is recommended to include all costs so as to estimate the overall budget for international mobility of employees. All rights. All in all, at this point in my life, I would definitely consider taking on an assignment abroad short-term more likely than long-term while I am young since I have less ties here — such as a husband and kids.

Factors such as the ones mentioned above as well as a competitive base pay and a good benefits package would convince me to make the move. It would also be important to my job satisfaction and motivation for my pay and benefits to be competitive both in the U. S and my host country. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.