Expatriate Salaries

An expatriate is an individual living and, usually, working in a country other than their country of birth or citizenship. The term is commonly used to describe employees on a long-term but non-permanent assignment to another nation, usually sent by their employers to fill a certain gap or train in a certain skill. The word can also be used to describe those who have personally chosen to live in a country unrelated to their national citizenship, or individuals who have given up citizenship in one nation to become a citizen of another.

Expatriates and Work

The term expatriate is most often relevant under work circumstances. For example, consider a United States-based company that might send employees to a Japanese facility for periods of one year to develop an understanding of Japanese test methods and sales markets. Alternatively, a business from Spain sends an employee to Canada for three years to develop a new sales initiative. In both cases, once the employees take up residence in this new country, they are considered expatriates.

Companies will often send employees to overseas locations for a longer-term period – anywhere from six months to three years – to train at the new location, make new contacts and gain an understanding of how things differ between international locations. This can be difficult for employees, who often have to leave family and friends for an extended period of time to travel to a new place with new languages, cultural norms and work environments. Most companies make up for this by providing a generous compensation package for these difficulties, which can make this kind of temporary position much more exciting.

Expatriate Compensation Basics

Most companies make sure that expatriate work is financially advantageous to the employee. An international compensation package is likely to be worth more than the employee would make at home; it’s also likely worth more than other local employees make at the new place of employment. The compensation package includes not just salary, but a number of other things the company might offer financially to make the relocation look advantageous. It’s beneficial for businesses to make a solid compensation package part of their global strategy, explains SHRM.

Most companies want to be sure an employee’s financial situation remains equal, if not better, to what their monetary compensation would be if they remained an employee at their home site. Employees may find a bonus offered to their regular salary to compensate for the difficulties of relocation; they may also find bonus incentives tied to certain objectives related to their international time. The bottom line is that no employee should expect to make less on an expatriate job.

Since longer-term expatriates may want to relocate with their families, most companies also offer assistance such as family accommodations, says Blue Steps. In addition, they may provide coverage for costs of relocation, costs related to health care plan transference and integrational assistance like language lessons or a local driver. For families that don’t move with the expatriate, companies will often offer a larger travel budget, or more vacation days, so that the employee can stay in contact with their family.

Other Expatriate Compensation

There are a number of tax benefits a company can offer that can equalize taxes. Often, the employee pays what tax they might be expected to pay in their home country, and the company makes up the difference, so that the employee isn’t negatively affected by foreign tax policies that might differ from their own.

Per diems and other bonuses may also come into play for expatriates. Offerings can differ depending on the employee’s situation. If there are expenses to be paid at home as well as abroad, companies often offer per diem or monthly amounts to be used towards living expenses like food and rent.