The Balance Sheet Approach to Expatriate Compensation

The Balance Sheet Approach to Expatriate Compensation

The balance sheet approach to expatriate compensation is used to ensure employees are able to maintain their home purchasing power while on a temporary international assignment.

In this approach, employees continue to be paid their home salary, maintain the link to home benefits, and receive a series of allowances to balance host vs. home costs for income taxes, goods and services, and housing. These allowances are specific to home country, income, and family size, and are adjusted over time to take home and host inflation and exchange rate changes into account.

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