Manage expatriate expenses for capital returns

Article Abstract:

The balance sheet approach commonly used in compensating US employees who work abroad can result in the employer managing the employees' finances. It can also contribute to employee failure rates or substandard performance, and can lead to the failure of US multinational firms in meeting their overseas operational objectives. An alternative to the balance sheet approach is proposed in which the employee would receive a US base salary and an all-inclusive living allowance which is tax-equalized. Salary would be based on salary grade, family status, and assignment location, with disposition of the living allowance at the expatriate's sole discretion. Ending piecemeal payments for housing, transportation, and other expenses would allow the employee to focus on job challenges and growth opportunities.

Finance, Human resource management

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Make pay plans work for the people they pay

Article Abstract:

Human resources professionals who are attempting to develop pay compensation systems to promote cooperation among employees can analyze present pay and value systems to change parts that are not equal and enhance aspects that are positive. Values connected to compensation include: existential values, sociocentric values, and manipulative values. Two case studies are discussed to demonstrate how to design equitable pay systems based on values. Suggested steps in the process include: establishing the minimal number of pay grades; determining maximums for every pay grade based on market value plus a percent; and establishing progression steps for each job range.

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Oversee expatriate returns to curtail taxes

Article Abstract:

Companies can maximize the benefits of international operations and employees' overseas assignments through careful management of the employees' overseas assignments and ensuring that plans are made for the employees' eventual return to the US. Timing of repatriation and payments to expatriates can be critical in terms of foreign and domestic taxation. Timing of return home also requires consideration of when incentive stock options or other employment related options are exercised, what real estate gains may have been made, what US taxes may need to be withheld, and what foreign tax credits are available to alleviate double taxation.

Usage, Prevention, Tax planning, Foreign tax credit, Repatriation, Double taxation

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