The payroll department is one of the most important departments for the HR. By payroll department, we mean the home and host payroll departments. Why is it so important?
First, for the expatriate, it would be inconceivable not to be paid exactly what was agreed upon his departure;
Secondly, because the payroll department represents directly the employer in the eyes of the expatriate. Errors in the amount paid, the amounts transferred, etc will make the employee believe that his HR department is incompetent. Therefore, even if there is no direct conflict between the employee and the HR, the employee will have the feeling that his expatriation was not properly controlled. This feeling will provide the employee cards when negotiating or discussing other aspects of his assignment ;
Finally, payroll in the home or the host location must respect a great number of legal rules. Some of the main problems will be that :
- The payroll department is not aware of the rules applicable to expatriate’s compensation;
- The payroll department may not have the proper tools to handle an expatriate’s package with its specific rules.
For these reasons, include your payroll department early in the expatriation’s process. You must inform him of the rules that will apply so that it can prepare itself. Payroll will need to know or have the following:
- Copy of the annex to the work contract signed ;
- Detailed package of the employee ;
- Date the employee joins the payroll ;
- Social status: voluntary vs mandatory social security contributions ;
- Payment instructions: paid a 100% in France or the host country, split payment, etc. ;
- Handling of the termination payments, bonuses, vacations, etc ;
- All particular elements negotiated by the employee.
All these elements will also have to be provided to the payroll department abroad since this department may have to pay contributions or withhold taxes.
During the employee’s expatriation, communication with the payroll department is very important. Any specific payment can have an impact on the payroll. Therefore, communicate with your payroll department and maybe inform it of how a special payment needs to be processed.
Finally, upon the return of the employee, it will be necessary for the payroll department and the HR to work again hand in hand.
We will not in this section get in the specifics of the expatriate’s payroll. However, our Blog
section includes numerous articles on how to run a proper payroll and optimize properly certain elements of compensation.