Best Practices for Delivering International Assignment programs

Transcription

1 Best Practices for Delivering International Assignment programs SM

2 International Assignment Compensation Services satisfies a complex and critical need in the support of international assignees. This is true because accurate and timely coordination of the many issues specific to international assignments is essential to ensure that allowances and tax consequences are correctly understood and administered. In view of the risks financial, operational, and legal of not managing international assignments well, Cartus developed its best practice operating model. Following is a top-line executive-level summary of international assignment compensation services provided by Cartus as a total outsourced solution. In addition, please refer to the companion piece, Six Risks of Administering International Assignment Programs, to gain a fuller appreciation of the many liabilities inherent in this complex and changing arena. The Service We Provide International Assignment Compensation Services is one of our core competencies. We have been providing compensation services since 1997, offering an innovative, high-technology driven solution, with programs that are tailored to each client s needs and budget. Our services cover three major aspects of an international assignment: 1. Administrative Functions. We manage the required elements of an international assignment, e.g., creation of letters of assignment and coordination of certificates of coverage. 2. Payment Facilities. We coordinate and track allowances and other related payments made to the assignee via utilization of the Compensation Balance Sheet approach and our proprietary relocation accounting system, even reporting for shadow payroll compliance required in various countries. 3. Reporting. We manage the total cost impact of these payments on the assignee s compensation throughout the life of the assignment, providing ready online access to data and management reporting to help view and control the total assignment spend. 02

3 1. Administrative Functions First and foremost, we take responsibility for comprehensive coordination of internal assignment compensation. We remove the necessity for administrative level staff that many clients maintain at their headquarters location and around the world. Administrative Functions Offering a self-service International Quick Cost Projection tool to facilitate pre-assignment cccscenario planning Calculating detailed assignment cost projections based on: - The company policy, - Cost-of-living data provided by a specialty firm, and - Assignment tax calculations provided by our technology or the client s tax partner Generating assignment letters that summarize the company s policy and benefits for each assignee Preparing compensation balance sheets and payroll instructions related to assignment allowances Interfacing with payroll departments to deliver ongoing assignment-related payroll instructions Auditing payroll payments to instructions Aggregating global AP items and payroll items from both home and host locations into a common database, for reporting data and operating shadow payroll where required Reporting employee compensation to the client s tax partner PLUS: Making payments to the employee throughout the life of the assignment (not strictly a compensation function, but often closely associated and important because of prohibitions against accounting firms making payments). 03

4 2. Payment Facilities The heart of our expertise lies in coordinating and tracking payments, allowances, and other related financial matters relating to the assignee. We have developed a proprietary relocation accounting system that enables accurate calculation and scheduling of complex financial processes and payments on behalf of clients and assignees. Payment Facilities Assignment related salary incentives (hardship) Allowances for foreign spending (COLA, transportation, housing, etc.) Travel costs (per diem, temporary housing, meals, and incidentals) Housing and housing norms (deductions) Children s education Taxes and hypo taxes Service costs for Cartus and outside suppliers (e.g., cost-of-living and tax firm fees) 04

5 3. Reporting Using a centralized data warehouse, we provide clients access to financial information and reporting that supports management of policy, budgets, taxes, and other functions driven by international assignments. Following are examples of the reporting capabilities clients count on for accurate administration of these processes. REPORTING: COMPENSATION REPORTING REPORT NAME Balance Sheet Compensation Detail Compensation Summary Payroll Interface Report Compensation Payroll Report Tax Equalization International Budget Forecasting Report Payroll Audit Report DESCRIPTION Displays payroll location, payroll cycle, and home and host location for each employee on one easy-to-read report. Displays detailed information for each assignee broken out by payment category. Also enables you to track home, host, and reporting currency codes. Displays detailed compensation reporting for each employee by month, broken out by taxable compensation, employer taxes, nontaxable compensation, and withholdings. Outlines necessary payroll interface information, including file format, layout, output, and transmission method. Displays payroll reporting for each assignee, broken out by payment name, pay code, currency, amount, and pay date/payroll period. Tracks tax equalization details for each employee, including currency, payment status and amount, dates of follow-up and payment received/sent, and balance information. Displays a detailed forecast of costs for each of your assignees, broken out by expense category and compared side-by-side with actual costs. Allows our international compensation team to audit payroll information for all assignees to ensure accuracy. Other examples of compensation-related reporting include: cost projections, balance sheet reporting, actual vs. estimated costs, activity report, exception report, assignee cost, total cost reporting, assignee approved services, assignee status, assignees by location, assignees by region, and assignee financial information. We also offer an additional service, Traveler Tracking Days-in-Country Calendar Tool, to help ensure that your company is in compliance with employment tax laws and appropriate tax reporting and withholding requirements. 05

6 Benefits Cartus clients gain what we term a Total Mobility Solution by accessing International Assignment Compensation Services because it not only completes the suite of non-tax services but also allows for multiple synergies with the other aspects of international assignment management we perform. Following is a robust list of benefits our clients gain from outsourcing their total assignment management, including international assignment compensation, to Cartus. Coordinated Service Delivery. International Assignment Compensation Services is similar to other customer-focused logistical and administrative services we perform and does not require accounting firms to do any more than tax compliance work their core competency. Economy. Clients can avoid the considerable additional administrative fees accounting firms often charge for gathering and reconciling payment information housed in separate locations worldwide. Administrative Relief. Our role allows the client s staff to give up a complex coordination function and concentrate on more strategic human resource responsibilities. Single Source for Assignees. Assignees receive expert counseling on allowances and differentials from the same consultant coordinating all other assignment elements (i.e., fewer touch points). One-Stop Shopping. With the addition of compensation, clients can have all of their assignment administration needs managed by one source, Cartus. Comprehensive Reporting. Clients and their tax partners receive reporting that aggregates all financial information related to the assignee. Enhanced Compliance. Clients can achieve peace of mind knowing that Certificates of Coverage, compensation reporting to tax provider, and shadow payroll operation will enable full compliance with local laws/ regulations. Availability of Information. Clients can access compensation information (and total assignment cost information) through Cartus Online. Data Integrity. Allowance and payment information is entered into a single global database that generates all other information required for assignee communication, tax preparation feeds, and client reporting (including year-end tax reporting). Flexibility. You can continue to work with the accounting firm of your choice. Scalable Resources. Services can match client needs and grow in volume or geography seamlessly. Security. We provide controls protecting personally identifiable information (PII) with annual TRUSTe certification of Cartus Privacy Policy. Total Cost Capture. Clients can view all their relocation program costs. 06

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