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I've been reassigned from my current role working in the US to a role that rotates overseas (28 days on/28 days off). I'm trying to figure out the tax equalization scheme my company uses. By taking the assignment I get the following uplifts in pay: 15% foreign service premium, 35% location premium (I'm going to a shithole), and 30% risk pay (see previous note). The tax policy states that the company will pay all host country taxes (easy enough). But for home country taxes the hypo tax will be the "stay at home" liability, the amount I would pay if I never took the assignment. It then states that the uplifts are not subject to the hypo tax and the company pays the home country taxes for these items. Does this mean that the uplifts are basically tax free to me and I'll see an uplift of 80% of my gross?
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Jan 28, 2016 19:44
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| # ¿ May 16, 2024 22:13 |
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asur posted:My company does basically the same thing, the uplifts will be tax free to you and you'll see the exact amounts in your paycheck. if it's not already planned, you should push to have a meeting with the company that will prepare your taxes before going on the assignment. They should ask for your previous years taxes return, but if not I would bring it anyway and go through it. Contributions to IRAs, ROTH or Trad, should definitely be discussed as income contributed must be taxable and that interacts with both the foreign earned income exclusion and foreign housing exclusion. We use KPMG and I'm trying to get something set up. I have so much other poo poo to get done before I leave (cultural training, physical, etc) that it might not get done before I leave for my first hitch. I met with HR on Friday and they cleared up a lot of things.
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Jan 31, 2016 22:36
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