Managing expatriate payroll can be very complex and expensive. Both home and host country payrolls must be aware of the local customary payroll requirements and tax laws; for that reason most companies outsource this administrative process.

Common practices that increase cost and risk:

  • Incorrect exchange rates applied to payments
  • Over/under tax gross up
  • Non-periodic gathering of payroll/off-payroll data and appropriate reporting
  • Timely payroll cut-off of allowances/benefits
  • Inaccurate payroll administration of wage/pay coding
  • Duplicate payments

Common consequences related to an ineffective program:

  • Civil and/or Criminal negligence penalties
  • Substantial penalty and interest fines
  • Disgruntled employees
  • Intercompany charge-out concerns

The first step is to evaluate the expatriate compensation processes; identify if there are potential problems, risks or exposures and work towards a resolution. The solutions could vary depending on size of the expat population, resources available and each country's payroll systems flexibility etc.

Managing expat payroll requires in depth knowledge of global reporting requirements and global payroll legislations. Therefore, the skill set to be able to deliver this service is highly specialized and due to the growing global complexities these candidates are in high demand. It’s not surprising that, many companies are outsourcing this program and process to Cornerstone.

Cornerstone’s management of your global compensation program can help meet your company's critical business goals and objectives. For example, the program includes Dynamic total cost reporting, enhanced global compliance and governance and cost control, thus enhancing your global mobility program.