Salary, allowances, benefits in kind: structuring coherent international remuneration.
The expatriation package must be clearly defined before the employee's departure. It may include: base salary, expatriation allowances, cost-of-living allowance, housing allowance, children's school fees, company car, travel, and benefits in kind. Each element can have different social and tax consequences depending on the host country.
Key elements to structure
Depending on the company's mobility policy, various remuneration elements can be split: base salary, performance bonuses, annual bonuses, expatriation allowance, cost-of-living allowance, housing allowance, transport allowance, children's school fees, benefits in kind, profit-sharing where applicable.
Tax Equalization vs Tax Protection
Tax Equalization is an international mobility policy aimed at neutralising differences in taxation between the home and host countries, so that the employee is neither better nor worse off because of their expatriation.
Tax Protection is an arrangement where the employer covers only the potential additional tax cost linked to international mobility, while letting the employee keep the benefit of any tax saving.
Why carefully structure the package?
Poor structuring can lead to social contribution errors, poorly anticipated taxation, inconsistencies between French and foreign payslips, or difficulties when the employee returns to France. Each remuneration element must be analysed against the social and tax obligations of the destination country.
Payroll organisation
Depending on the package chosen, several payroll setups are possible: French payroll only, local payroll, Split Payroll (split between several countries), or Shadow Payroll (declarative payroll without a second payment). The choice depends on the package's structure, destination country and local obligations.
Our support
We help you structure a coherent expatriation package, compliant with the social and tax obligations of the countries concerned, and adapted to your international mobility policy and the employee's objectives.