International mobility – cost projections tool

Are your employees asking for more flexibility in their assignment package? How are you attracting and retaining the best talent when it comes to global mobility? Are you aware of the value of an assignment compared to the costs attached?

The world today is a different place in terms of employee expectations around movement and remote working. It is important for organisations to stay ahead of their competitors by ensuring that a robust and fool proof solution is in place for creating and tracking overseas assignments.

When you are considering moving employees across international borders, it is vital that you have control and full visibility of the associated costs. This can be particularly challenging when you are dealing with unfamiliar jurisdictions where tax rates can vary widely from country to country. Equally important is timely remuneration planning in order to optimise potential tax breaks.

Our cost projection solution is a smart and safe approach to adopt in managing your global mobility population and will assist in addressing the answers to the above questions.

If you are not already a BDO client, are a smaller organisation or just want a simple solution to run your own cost projections, you can purchase licenses for our cost projection tool.

Aside from removing the risks associated with manual processes, this technology solution enables you accurately price a particular assignment regardless of duration. It will also enable you realise the benefit of addressing the various employee mobility issues that many international businesses are facing today:

Issue:

Are you looking to expand to a new country location? If so, will you require employees to transfer to the new location for a period and have you quantified the likely tax cost of moving employees to such location?

Benefit:

Our cost projection solution affords you a clear understanding of what sending an employee to a new location will cost the business, helping you to make mobility decisions with a data driven perspective.

Issue:

Do you have employees travelling between the UK and the EU either on extended business trips or more longer term assignments? Significant additional social security costs to the business may arise due to the Trade and Co-operation Agreement that was ratified prior to the start of 2021 between the UK and the EU member states. This may effect the cost of assignments going forward as the level of social security contributions can vary considerably between the UK and EU countries.  

Benefit:

Our automated solution can assist you in costing the social security implications for the business and impacted employees arising from Brexit. Read our guidance on post-Brexit key themes for businesses to consider when it comes to their workforce:

Issue:

Do you have employees working remotely within their home country in a different state, canton or province from where the employer is based ? If so, this could trigger different tax, payroll and filing obligations for both employer and employee.

Benefit:

Even where an employee is continuing to work in the same country as the employer, albeit remotely, depending on exact location of that employee, there can be a significant difference to fiscal costs for both the business and employee. Our technology can assist you in comparing an employee's net pay following a domestic move and assist you in managing overall costs for both the business and employee.

Issue:

Do you have employees working outside of your business home location?  Do you have a policy in place to effectively manage international agile working ?  How are you assessing and managing  any additional costs involved?

Benefit:

Tax, social security, payroll, posted worker and visa requirements are just a few of the complexities and potential additional costs arising from international remote workers. To assist you in determining whom should bear these potential additional costs and allow you to determine what is viable for your business, the cost projection technology can be used to compare the cost of the employee working in the home location of the business with the requested remote working overseas location. 

For your existing assignees, BDO QuickTrip is a technology platform that tracks the movement of your global business travellers. Backed by our expatriate tax specialists in over 162 countries, QuickTrip provides an easy-to-use smartphone app for management of business travellers and provide a variety of management reports. Find out more.  

Issue:

Are you looking to build virtual assignments into your global mobility offering?  How are you setting out the program guidelines and structure to ensure a successful virtual assignment? Clearly, such assignments can trigger unintended tax and social security costs.

Benefit:

In leveraging off our cost projection solution, not only can you compare the cost of a virtual assignment with the cost of a regular assignment move, you can also determine the cost breakdown for the home and host locations. On initial review, there may be a cost saving to the business in not having to pay out additional assignment costs, however, where a host country has a lower cost of living than the home country or lower tax and/or social security rates, there may be a significant difference for the host location now picking up the home location costs during the virtual assignment. Using our technology tool ensures all parties are aware of the cost implications that may not be immediately apparent when establishing a virtual assignment.

Issue:

Do you have employees that commute to work in a different country? What measures do you have in place to ensure both your business and the employee are tax compliant in this respect? Even pre-pandemic, the trend towards reduction of assignment duration was fairly commonplace, with the more traditional assignment being replaced on occasion with the same employee choosing to commute to the place of work or spend time in the host country on a frequent but limited basis. This has resulted in the need for the tracking of business visitors around the world to ensure the employer and employee are tax compliant.

Benefit:

We can assist your business in both determining and adequately budgeting for the costs associated with cross border employee commuters, thereby enabling your business develop and implement a business traveller policy that is fit for purpose.

There has been gradual shift away from long-term assignments. Employees will, instead, move at short notice and for much shorter periods of time. They will not change residency or move home. This is often driven by specific projects or tasks. These business visitors have been joined by a growing number of business people who will ‘commute’ across international borders. This represents no less of a challenge for your business as you may be required to report on business visitors and travellers by BEPS legislation and local tax authorities. Business Visitor reporting is necessary in certain countries - for UK reporting, our Short-Term Business Visitors Toolkit provides you with the knowledge and tools to set up an STBV arrangement and make all necessary reporting to HMRC using our easy to use templates.

Issue:

Given the evolving global employee mobility landscape coupled with the sometimes high costs associated with tax equalisation, is your existing Global Mobility Policy fit for purpose?

Benefit:

In terms of you considering whether your existing tax assignment policy is aligned to the future needs of your business, we can assist your business in reshaping your current policy where applicable. Our software solution can calculate the associated tax costs under various scenarios and in the process help your business in its decision making in respect of any potential changes to your existing mobility policy.

 

Authors