Expatriate payroll solutions
Ensure your expat staff are compliant in home and host countries
PaySpace expatriate payroll management offers local compliance as well as unrivalled built-in automated standard delivered expatriate functionality. The advanced features provide automated multi-country, multi-currency salary and tax processing in both the home and the host country. Automated and instant single or multi-component gross up functionality further enhances concepts around complex tax equalisation scenarios.
Expatriate payroll management today
As Africa’s economy strengthens, the continent is attracting multi-nationals from all corners of the globe looking to benefit from this growth. Expanding your business into these new territories is an exciting yet challenging endeavour. To establish new offices as quickly and efficiently as possible, most companies will send some of their existing employees out to help with the set-up.
However, expatriate payroll management requirements can be complex to get right. Your company has to make sure that all expat employees stay legislatively compliant in their home countries as well as their new country of work. While legislative compliance can be difficult to achieve, it is possible.
What’s more, time zones and borders no longer inhibit operations and any size business can expand and integrate their operations around the world with greater success. Smaller businesses are consequently facing the same challenges as large multi-nationals, inevitably requiring an expat payroll. Whether you are currently running an expat payroll or simply preparing for the possibility of an expansion in the future, PaySpace can provide you with the correct tools to establish your global payroll.
Become the master of your payroll
Expatriate feature highlights
Automatic legislation updates
All international legislation is automated and updated by PaySpace. Clients need not worry about understanding complex legislative rules.
Advanced expatriate functionality
PaySpace covers the requirement for expats working in other countries to gross up their earnings by relevant statutory contributions according to currency and contracts offered in their home countries. This allows for simple conversion of net home to host earnings.
Generic tax certificate
A generic tax certificate in home country currency providing expats with information of payments made in the host country to complete personal tax returns in their home country.
Home & Host reporting
PaySpace is able to supply employee and company-based reporting in host and home currencies, as well as comply with consolidated reporting in any currency required by the multinational’s headquarters.
Country specific reports
Our standard reporting module produces country-specific company legislative reports and employee tax certificates in the required formats of each relevant country.
Currency conversions
Dated currency exchange rate conversions either on a monthly or daily basis for the entire multi-national group. The choice of currency conversion information source is up to the client.
Easy anywhere access
PaySpace cloud access eradicates the need for onsite admin personnel and allows all stakeholders, administrators, managers and employees to access their payroll or HR functions from anywhere in the world and on any device with only an internet connection and a browser required.
Employee migration
Simple employee transfer processes from country to country while retaining original employee number and biographical record. Read more about API Integration options here.
Advanced business workflow
Drive corporate governance and improve efficiency by offering limitless approval chains. Clients can take advantage of the PaySpace technology to get data input from the source, electronically approve it in locations around the world through advanced workflow capability, and ultimately, process the information from anywhere in the world.
Current African Footprint
Expatriate terminology
Expatriate
An expatriate (often shortened to expat) is a person temporarily or permanently residing, as an immigrant, in a country other than that of their citizenship. From an employee payroll perspective, there are many complexities associated with expats being tied to their home country benefits and salary in one currency and obtaining host country additional benefits and earnings in another currency. Furthermore, the employer is also exposed to obligations of appropriately applying the correct special tax conditions / statutory obligations and filing requirements in both host and home countries.
Tax Equalisation
Tax equalisation is a process that ensures that the tax costs incurred by an assignee on an international assignment approximates what the tax costs would have been had he remained at home. The intent of tax equalization is that the assignee neither suffers significant financial hardship nor realizes a financial windfall from the tax consequences of an international assignment. When tax equalisation is utilised, the employer bears the responsibility for paying the assignee’s actual home and host country tax costs. In exchange, the assignee pays to the employer a stay-at-home hypothetical tax as determined under the company’s tax equalisation policy.
Shadow Payroll
It’s a term used to report compensation data that is actually paid from another country. Shadow payrolls typically exist in all host locations that require payroll tax withholding and in-home locations that tax on worldwide income. In cases where tax equalised expatriates have been in the country for longer than 183 days, it may be necessary to calculate and pay across statutory taxes to the host country authorities. In these cases, the company pays the taxes to host country authorities without necessarily exposing these calculations to the expatriate.
Gross-Up
The process of advising a net amount in order to backwards calculate a correct inflated gross figure that takes into account relevant statutory taxes refers to a gross-up calculation. This calculation may be necessary across expatriate equalisation principles as well as in deriving an expatriate’s net assignment salary in a host country that incorporates home currency and host applicable statutory rules. A host expatriate payslip would typically include a myriad of gross-up calculations ranging from home guaranteed net pay and certain extra assignment gross up allowances and benefits.
Hypothetical Tax
Hypothetical tax is a reduction in salary which estimates the amount of tax that you would have to pay if you had not gone on assignment – theoretical home tax liability on home standard pay. In accordance with tax equalisation principles, the employee’s obligation extends to paying the hypothetical tax to the employer while the employer’s obligation would extend to paying home and host country taxes.
