Career & Jobs: expatriate premium

Premium and/or indemnities, incentives for expatriation.

You are a candidate for expatriation to boost your career, so you will soon have an expatriate job.

Making career and living abroad, but for what status to opt in order not to lose his social protection.

Expatriate premium: what is it?

The expatriate premium is a positive incentive for the employee, who is proposed or to negotiate with the employer when drafting the expatriation contract.

The expatriation premiums concern more specifically the detached and not the status of expatriate, because the one is hired under local contract.

Expatriation: premium types

There are different forms of expatriate premium that are used in the form of a "package" by companies that expatriate their employees, such as:

* Expatriation or life difficulty premium: It is paid by the employer to compensate for the difficulty associated with the living, remoteness and working conditions in a foreign country. This is a percentage that is applied to the base salary or reference of the seconded employee.

- This percentage varies according to the country and is measured according to certain parameters: unstable political situation, dangerousness of the country, climate, language, culture, hygiene and health, others (existence of schools, hospitals, etc.).

- This premium can be paid either in gross or in net depending on the practices of the company. 

* The mobility premium: it corresponds to a lump sum paid at the beginning and at the end of the mission to encourage and motivate candidates for expatriation.

* The cost of living allowance, as well as the expatriation indemnity, helps to compensate for a differential in the cost of living between the country of origin and the host country. 

It is an index which is applied to the net wage of the employee, we can find as index:

- The Home Based index which is used for short-term expatriations or for countries where the culture is radically different from that of the country of origin. Its calculation is based on the consumption structure of the place of origin.

- The index of adapted expenses: takes into account the types of consumption: place of origin and place of expatriation. It is applied without restriction and has a serious advantage in the case of successive expatriations, it is the only one of the three indices to be reversible.

- The Host Based index: is used for long-term expatriation in countries geographically or culturally close to the country of origin. It is based on the consumption structure of the host country.

* The installation premium: it avoids many expenses, especially those relating to small expenses. It is often limited to one or two months of maximum wage.

All of its premiums are defined in two ways:

- in the form of a percentage of net or gross wage or,

- by a fixed amount.

They can be paid in several ways:

- during the whole period of the expatriation,

- at the beginning of the mission or,

- at the end of the mission.

It is important to make the right choice because tax implications depend on it.

Good to know: expatriation premuims and/or indemnities and benefits in kind are generally taxable. In order not to be overly taxed, it is advisable to pay them in the country where taxes are the least burdensome.