Many global-based companies require that their employees have a degree of international work experience to be promoted to higher-level positions. Expatriate work assignments challenge both the workers and their families, and most globally based businesses offer expatriate incentive packages that compensate employees. To understand the compensatory packages, it’s important to learn the expatriate benefits key terms
An expatriate is an employee who is not a citizen of the country in which the business operations are located. Expatriates usually don't plan on living in their new country permanently, but if they do they usually retain their citizenship in their native country.
Localization is the process of changing the expatriate benefit package to a plan that is the same as one offered to employees locally.
Tax equalization ensures that while the expatriate employee is working in another country, he or she pays the same amount of Social Security taxes and income taxes as if they were working for the business while living in the United States.
The salary base rate and increases must address the changes that are seen in the cost of living and the overall experience and job responsibilities that employees and their families undertake when they relocate to another country.
International/expatriate medical insurance
International/expatriate medical insurance provides expatriates with coverage for medical expenses that occur when the employee is traveling, or living, temporarily in a foreign country. This type of coverage usually extends to major medical expenses like hospital stays and surgery done in an emergency.
The main focus of using the balance-sheet approach is ensuring that expatriate employees have a lifestyle in the host country that is equivalent to the lifestyle they would have at home. Factors such as housing, quality and cost of living, and transportation are taken into consideration when using this approach.