How is expatriate compensation calculated?
Negotiation is most often used for special situations or in organizations with few expatriates. This approach involves basing the expatriate’s salary on the local (host country’s) salaries. It is easy to see that the same position in different countries may have quite different salaries.
Why is expatriate compensation complicated?
Compensating expatriates is undoubtedly complex, complicated by fluctuating exchange rates, inflation, challenging locations in emerging markets, variable income tax rates, and a range of new compensation practices (Dwyer, 1999; Phillips & Fox, 2003).
What are the elements of expatriate compensation?
Components
- Base salary: For expatriates, the term base salary means the primary component of a package of allowances which are:
- Foreign Service inducement/hardship premium:
- Allowances:
- Education Allowances for Children:
- Relocation Allowances and Moving:
- Tax Equalisation Payments:
- Spouse Assistance:
What is an international compensation?
International Compensation is an internal rate of return (monetary or non monetary rewards / package) including base salary, benefits, perquisites and long term & short term incentives that valued by employee’s in accordance with their relative contributions to performance towards achieving the desired goal of an …
What is the most common approach to expatriate pay explain what comprises this form of compensation What is the advantage of this approach?
What is the advantage of this approach? The most common approach to the expatriate pay is the balance sheet approach. It equalizes purchasing power across countries and adds a financial incentive to take the position. A comprise is the taxation where they would have to pay both the home and host country governments.
What is the most common approach to international compensation?
The most common approach to expatriate pay is the balance sheet approach, which aims to develop a salary structure that equalizes purchasing power across countries so expatriates have the same standard of living in their foreign assignment as they had at home.
What are expatriate benefits?
Expatriate benefits options
- Increased salary.
- Relocation benefits.
- Language training.
- Family benefits: Schooling, health insurance, spousal job placement, etc.
- Accommodation benefits: Subsidized or free housing to offset cost of living.
What is the most common approach to determine expatriate pay?
What is international compensation?
International compensation refers to all forms of financial. returns and tangible benefits that employees of an. international organization receive from their employer in exchange for providing their labor and commitment.
How do companies typically address expatriate compensation issues?
The home-based, or balance sheet approach, is the most popular of these approaches and used by more than 85% of U.S. multinational companies. 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.
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