Living expenses may vary dramatically in a new country, which means expats need to understand the costs involved.
For instance, their housing and healthcare needs must be met and if they are travelling around then there will be expenses incurred as well; for those with families, education and schooling costs will also need to be met.Finance
Expats will need to pay tax in the new country and will probably need some assistance in filling in tax forms and making payment; US expats need to pay tax in the US as well.
One reason that the expat will need assistance with their tax is that taxation laws vary from country to country and they are at risk of paying more than they need to and may still be liable to a tax bill in their home country as well by not following the rules.
The expat may be moving overseas under permanent residency qualifications which may affect their tax status. They also need to be aware of planning to return home for long holidays since this may affect their tax status as well.
The next most important question to ask an expat employer is what the salary package will cover.
While many expat salary packages are generous and will cover everything from housing to transport and education, not all packages are so inclusive.
An expat will need to calculate how much money they will spend every month and what their monthly outgoings will be; they will need to put together a budget that is based on realistic prices and whether they can afford their new lifestyle as an expat.
Expats may also find a ‘hardship’ element added to their contract so they get more money to help deal with their new location; for instance, some employers in Beijing are offering extra cash to help deal with the city’s air pollution.
The expat’s position may require them to travel around their new country on a regular basis which brings up other questions:
• Who will be paying for the travel?
• Is the new country safe for expats to travel around?
• Will the family have a good level of security in a country facing unrest?
Length of assigment
Another question that needs to be tackled and may not be quite so obvious during negotiations, is how long the expat’s contract will last. Some employers will offer a fixed term contract with the option of it being extended while others will not do so.
This means the expat will need to put their belongings into storage and rent out their home but they will need to put plans in place before heading overseas so they can pick up where they left off when they return.
It is also worth considering whether the overseas assignment will become a permanent posting, in which case the expat might want to invest in a new property in their new country while selling their current property.
Also, should the position become permanent, will the expat’s employment then move to a localised contract? If so, this may mean losing some of their employment rights and money.
Another aspect to knowing how long a contract will run for is knowing how they will be appraised. It may also be worth asking whether the expat will return to a promotion from their employer after the assignment has ended. Some employers will also be paying bonuses and salary increments that are linked to the expat’s appraisal.
This means the appraisal becomes an important part of the relocation package because the expat will need to know who is assessing them and what information will be used in the process; for instance, will their new colleagues’ opinions form part of the appraisal?
Questions to ask
Questions that expats should ask their new employer before signing a contract include:
• Who will be paying for accommodation, education and healthcare?
• What will be my tax status in my home and new country?
• Will I receive help for dealing with taxes in both countries?
• What will my salary cover?
• How long will my contract be for?
• How will I be appraised?
Finally, one last question an expat should be asking an employer before they head overseas is which language they will be working in.
While English is a popular language in business worldwide, not every meeting will be conducted in English, which means knowledge of a second language may be necessary.
This may entail the expat having to learn a new language and they will need to take lessons before arriving – and these lessons will need to be paid for. Also, the expat employer may insist that the expat has a certain level of fluency for the assignment to be a success.
Another potential issue is that the expat may be asked to sign contracts both in English and in the language of their new country so it is highly recommended they get a copy of the foreign-language contract verified by a translator to ensure there are no major discrepancies between the two.
Also, when checking the contract, the expat should look at how the assignment can be terminated, since not all expat experiences when posted overseas are successful.
Essentially, while the advice in this guide for what questions an expat should ask their employer before signing a contract is sound and useful, the fact remains the expat should not lose sight that the move should not be detrimental to their career or financial prospects and these issues should be at the forefront of any negotiations.
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