Compensation as a business strategy for global operations has multiple layers. According to the text,
“firms adjust pay according to market conditions and design methods for job grading and incentive plan”
(Deresky, 2017). Organizations with only a US based presence are used to our pay scale and the market
standards and they typically base the compensation and salary on those conditions. There are other
elements that are involved in the compensation strategy of global operations such as “pay scales,
government involvement of benefits, the role of unions and the cost of living” (Deresky, 2017). Benefit
plans must be made explicitly clear to expatriates so that they are fully aware of their salary and what
else it may contain, such as non monetary benefits like vacation time, health and dental plans and in
their instance flight discount plan options.
As an expatriate living in a host country, the employee may not be aware of the tax implications and
burdens that they may be responsible for while working abroad. If they are property owners within the
US they may still have to pay those taxes as well as the new taxes for their host country. Tax differences
may be withheld from their paycheck which could diminish the amount of expected income they had
calculated which could impact their quality of life in the host country. Additional payroll implications
that could impact the expatriates are 401K retirement plans, split payroll to pay taxes in both their home
and host country and differences within the social systems and tax laws while working in the host
country.
Deresky, Helen (2017). International Management: Managing Across Border and Cultures (9th ed.).
Upper Saddle River, NJ: Pearson Education, Inc
RSM. (2018). Tax Considerations for Expats. https://rsmus.com/what-we-do/services/tax/international-
tax-planning/global-mobility/tax-considerations-for-expats.html
“firms adjust pay according to market conditions and design methods for job grading and incentive plan”
(Deresky, 2017). Organizations with only a US based presence are used to our pay scale and the market
standards and they typically base the compensation and salary on those conditions. There are other
elements that are involved in the compensation strategy of global operations such as “pay scales,
government involvement of benefits, the role of unions and the cost of living” (Deresky, 2017). Benefit
plans must be made explicitly clear to expatriates so that they are fully aware of their salary and what
else it may contain, such as non monetary benefits like vacation time, health and dental plans and in
their instance flight discount plan options.
As an expatriate living in a host country, the employee may not be aware of the tax implications and
burdens that they may be responsible for while working abroad. If they are property owners within the
US they may still have to pay those taxes as well as the new taxes for their host country. Tax differences
may be withheld from their paycheck which could diminish the amount of expected income they had
calculated which could impact their quality of life in the host country. Additional payroll implications
that could impact the expatriates are 401K retirement plans, split payroll to pay taxes in both their home
and host country and differences within the social systems and tax laws while working in the host
country.
Deresky, Helen (2017). International Management: Managing Across Border and Cultures (9th ed.).
Upper Saddle River, NJ: Pearson Education, Inc
RSM. (2018). Tax Considerations for Expats. https://rsmus.com/what-we-do/services/tax/international-
tax-planning/global-mobility/tax-considerations-for-expats.html
