Global mobility is exciting, but it comes with a maze of regulations and hidden costs. Between immigration requirements, tax complexities, and payroll decisions, there are countless details that can make or break an assignment.
This is the third post in our Simplifying Cross-Border Moves series, inspired by our in-depth white paper and recent webinar. We’re here to share key tactics mobility teams can use to stay ahead of potential risks.
Every assignment starts with work authorization. Securing visas and residency documentation early helps avoid delays and frustrations.
Taxation and social security decisions are equally critical. Should your employee remain in the home country’s system or switch to the host country? Totalization agreements between countries can prevent double contributions, but you need to know how to apply them.
Tax treatment varies widely by country, and employers must consider:
Tax equalization ensures that the assignee neither gains nor loses financially due to differences in tax rates between the home and host countries. Under this approach (often tied to home-based assignment packages), the employer calculates and withholds a hypothetical tax that the assignee would have paid at home and covers any excess host-country tax. Alternatively, some companies use a tax protection or gross-up approach where the employer reimburses or covers any additional tax liability on specific assignment-related allowances. Regardless of the strategy, employers should offer professional tax preparation services to ensure accurate filings and compliance with both countries’ tax laws. Cross-border taxation is complex, and errors can lead to penalties or unexpected costs.
Determining where social security contributions should be made is crucial. In some cases, it may be beneficial for the assignee to remain in their home country’s social security system, especially if it maintains continuity of benefits such as pensions or healthcare. In other situations, contributing to the host country’s system might be required or more advantageous. The decision can affect both employee benefits and employer obligations.
These are bilateral agreements between countries that prevent double social security contributions for internationally mobile employees. They typically allow the assignee to remain in their
home country’s system for a specified period while exempting them from contributions in the host country. To avoid unnecessary costs and ensure benefit continuity, it is critical
to understand whether a totalization agreement exists and how to apply it.
Compliance and cost management are critical to international assignment success. Getting them right protects your business, your assignees, and your budget. While these issues may seem complex, they’re manageable with the right planning, tools, and advice.
This is just one area we explore in the paper. We also cover compensation, selecting assignees, and supporting assignees throughout their journey. Subscribe to our blog to see all the updates. Download our guide “Simplifying Cross-Border Moves” or watch the webinar recording to explore practical strategies.
If you’re looking for a quick refresher on global mobility fundamentals, visit AIRINC’s Global Mobility Education Knowledge Base. Whether you’re new to mobility or a seasoned professional, it’s a helpful explainer of the nuts and bolts of global assignments.
If you’d prefer to talk, I’ve helped many organizations work through tax challenges and would be happy to explore solutions for your mobility programme. Contact me.