Expatriate
Meaning & Definition
An expatriate, often referred to as an "expat," is an employee who is sent by their company to work abroad on a long-term assignment. Common reasons for expatriation include setting up new branches or managing international offices. Expatriate employees often receive additional benefits to cover relocation and living costs in the foreign country.
Additional Benefits for Expatriates
Expatriates typically enjoy several financial and non-financial perks, such as:
- Relocation assistance
- Housing or rent allowances
- Education support for children
- Cost of living and hardship allowances
- Travel or automobile benefits
Selection Criteria for Expatriates
Employees chosen for expatriation usually meet certain professional and personal criteria, including:
- Strong technical, managerial, and interpersonal skills
- Flexibility to adapt to a new cultural and work environment
- Willingness and desire to live abroad
- An adaptable and supportive family
Duration of Expatriate Assignments
Expatriate assignments typically last between 2 to 5 years, depending on the company’s policies and the requirements of the job.
Challenges of Hiring Expatriates
While expatriates bring significant value, hiring them can be costly. Companies must bear expenses such as relocation, housing, schooling for children, and cultural adjustment support. Additionally, the risk of the employee or their family struggling to adjust can lead to early return, affecting both costs and productivity.
Role of HR in Supporting Expatriates
HR professionals play a critical role in ensuring expatriates have a smooth transition. They:
- Offer training on cultural and workplace differences
- Provide networking opportunities within the organisation
- Assist with logistical needs such as housing and schooling
- Offer continuous emotional and professional support
This content should help you better understand what an expatriate is, the benefits they receive, and the HR processes that support their success abroad. Plum assists companies in managing expatriates' benefits, ensuring a smooth international work experience.
Frequently Asked Questions (FAQ)
Q. What are the tax implications for expatriates working abroad?
A. Expatriates often face dual taxation, where both their home country and the host country may tax their income. To avoid this, many countries have agreements in place, called Double Taxation Avoidance Agreements (DTAA). These agreements help expatriates reduce their tax burden. Therefore, it is essential to understand the tax regulations of both countries before starting an overseas assignment. Employers usually provide guidance on handling tax compliance, ensuring expatriates meet all legal obligations without overpaying.
Q. How does repatriation work when expatriates return to their home country after the assignment?
A. Repatriation involves returning the expatriate and their family to their home country after the assignment ends. The process includes relocation assistance and reintegration into the home office. Companies often provide support to ease the transition. This includes reverse culture shock training, where employees adapt back to local work cultures. Organisations may also help expatriates find roles that match their newly acquired global skills, ensuring they continue contributing effectively.
Q. How are expatriates' salaries typically structured compared to their home country compensation?
A. Expatriates usually receive a base salary similar to their home country compensation, but with additional allowances to cover living expenses. These include housing, schooling, and cost-of-living adjustments. The total package reflects the host country's economic conditions and local taxes. Salaries may also be adjusted based on hardship allowances when the country of assignment is considered less comfortable than the home country. Therefore, expatriates often benefit from a higher overall pay package than their counterparts working domestically.
