global mobility tax

Want to Tap Top Talent? Make Your Taxation Flexible and Friendly

“How much of my pay do I really bring home after taxes?”

That is the question voiced in its various forms by employees or assignees alike. Ultimately, a large part of an assignee’s satisfaction at work boils down to how much of their hard-earned pay they and their family can enjoy. If the compensation package looks good on paper but is actually worth next to nothing once the government gets its share, then chances are the soon-to-be-disgruntled employee will rethink his engagement with you.

How employers and global mobility specialists manage the taxes of their assignees and mobile workforce is not just a source of motivation or demoralization. Handled correctly, it can even become an incentive for the assignee to sign onboard or renew his contract.

According to Blick Rothenberg, assignees, expatriates, and international members of the workforce move around a lot — in countries, cities, and towns. Sometimes they can be asked to officially hold office in one city and then commute and stay in the next state for several months. For example, an assignee may be hired by a tech firm in Silicon Valley; during his two-year contract he might stay in Northern California for one straight year, but then might have to temporarily move to New York the following year. All that moving around and temporary relocation can influence their taxes. And that is the last thing that the assignees want to be bothered with. Precisely because they are foreigners, they may not even know how to cope with it.

As such, they would gladly work with a a global mobility specialist or employer who helps them deal with taxes  by helping them calculate any changes in their taxation as they travel around several locations.

At the same time, though, unburdening the assignee of this issue does not mean keeping him in the dark. He may not want to handle it, but he will ultimately need to be informed of what’s happening every step of the way. P&A Grant Thornton reminds us that current laws do require the exercise of transparency in taxation matters.

In short, the global mobility specialist would have to be able to articulate and explain the finer nuances of taxation, their changes, and implications to the on-the-go assignee without burdening or confusing him. He has to simplify the whole thing and make the assignee feel that the entire matter is being taken of—and that he will still have enough of his salary to take home with him, and enjoy.

Finally, a word to the wise; in all these things, the global mobility specialist should consult a certified public accountant or a tax lawyer. If questions do come up, the experts would be in a better position to answer. Yet throughout the process, he should continue to hold the hand of his assignee; at the end of the day, he still needs the global mobility specialist’s presence while both of them are untangling the complicated structure of his taxes.