Globalization has entered a new era, one where even well‑established companies may suddenly find themselves navigating unfamiliar international territory. For HR professionals, these shifts tend to move rapidly from long‑term strategy to urgent operational action.
Imagine reviewing compensation adjustments when the president of your Canadian-based company casually mentions plans to expand overseas. Before you can sort through the implications, they add, “I would like to send Jane Smith to Germany for three years starting later this year. How soon can you make this happen?”
In an instant, your mind starts racing as immigration timelines, tax obligations, payroll logistics, cultural readiness, and compliance risks all surface at once. That first global assignment can feel both exciting and overwhelming, a high‑stakes puzzle where a single missing piece may create real challenges for the employee and the organization.
But not to worry. For many organizations, the leap into global mobility begins exactly this way. Fortunately, there are foundational steps HR can follow to administer and support employees who work across borders. These steps are typically grouped into four key areas:
The purpose of a global mobility program is to coordinate the many moving parts, including immigration, payroll, tax, compensation, and overall employee support, involved in relocating employees across borders. While organizations often rely on a mix of internal teams and external vendors to manage these responsibilities, it’s still important to understand the core steps and decisions that shape the process. Building a clear framework helps organizations manage risk, control costs, and create a smoother experience for employees, regardless of which providers are involved.
Below, we explore the four basic steps in more detail and share practical ideas to support the transition.
First and foremost, foundational global mobility policies—including types of supported mobile employees, compensation and benefit approach, and defined tax support—should be developed and instituted as early in the process as possible.
Before drafting a global mobility policy, consider the business needs of the organization and the benefits that will be needed to support the mobile employees. Examples of steps to take in preparation for creating a policy include:
Often, the first global assignment for a company is a long-term assignment, such as in the above example, in which Canada is the Home country and Germany is the Host country. For this type of assignment, many companies will utilize a balance sheet approach for the compensation methodology (which provides certain “uplifts” to allow a mobile employee to maintain their Home country-based purchasing power) along with tax equalization for the tax reimbursement methodology (which supports a goal of holding the employee’s tax burden to a similar level to what would have applied had they continued to work solely in their Home location).
The balance sheet and tax equalization approaches will allow an employee to:
To support this structure, companies will often provide allowances to bridge cost-of-living and assignment-related expense differences. Because these aren’t included in the individual’s base salary and can be discontinued upon repatriation, paying separate allowances can make the transition back to the Home country compensation structure easier at the end of the assignment.
Consistent with the temporary nature of the assignment and ongoing employment with the Home country employer (e.g., three-year assignment using the example above), most companies maintain international assignees on their Home country payroll and benefits program so that employees maintain their current level of benefits and protect their ability to participate in Home country retirement programs.
However, despite remaining in the Home country benefits program, it’s critical for companies to work closely with their payroll and legal teams to consider if any payroll reporting and tax payment requirements and/or employment law considerations (e.g., mandatory benefits) apply in the Host countries for your mobile employees.
Finally, in addition to your payroll, legal, and human resources teams, your corporate tax team should be kept in the loop so that your mobile employees don’t inadvertently create unexpected corporate tax issues. Mobile employees can create unintended corporate tax exposure, and corporate tax positions may also affect an employee’s individual tax outcomes. Because these areas are often managed by separate teams, frequent communication is critical to supporting a compliant and effective global mobility program.
Formalizing the payroll process is another crucial step in the pursuit of global mobility; once the type of policy is decided, the next step is working out the payroll details. This is when the HR or mobility team should work with internal stakeholders and external vendors to review and implement the structure that best aligns with the policy and regulatory requirements.
Continuing with our example, since Jane is going on a long-term assignment (three years), the company will maintain Jane in the Home country payroll system and benefit plans. By continuing to pay Jane out of the Home country, Jane will continue to have funds in Home country currency to pay ongoing obligations, such as mortgage and credit cards. In addition, Jane’s ability to contribute to Home country social tax obligations and retirement plans remains consistent.
However, Jane will also need funds in the Host country’s currency. To accommodate this, the company may deliver a portion of the base salary and allowances in the Host country’s currency (in Jane’s case, the euro). Note that the location of payment alone doesn’t determine the taxability of the income. The company will need to review the payroll reporting and withholding requirements in both the Home and Host countries and maintain compliance with local laws.
The cross-border payroll process is more complicated than that of a domestic employee. For example, in an international scenario, the company will need to:
At year-end, the tax provider preparing the employee's Home and Host country tax returns will request a summary of the various amounts paid to or on behalf of the employee. It’s important to note that payroll may not have detailed information for amounts paid outside of payroll, so accounts payable or other departments may also need to assist.
To avoid a last-minute rush to gather critical data, it’s important for HR professionals to meet with the payroll department early to set up the infrastructure needed for international assignments and other mobility scenarios (e.g., business travelers, remote workers). This includes assessing the payroll system’s capabilities and, if necessary, establishing an alternative method for tracking the information.
Additionally, you’ll want to clearly understand country-specific withholding, reporting, and year-end requirements before sending employees abroad. This will likely include engaging the right external partners (e.g., immigration, tax, payroll, relocation, destination services) who can collaborate strategically. This step will also involve alignment of key internal stakeholders, such as HR, payroll, legal, and tax departments, to reduce compliance, payroll, and reporting risks.
Every country has its own set of federal laws and legislation in addition to local regulations that mobile employees and employers must follow while in the Host country. For many nations—Germany included—mobile employees are required to apply for and obtain a visa or residence permit before arriving in the Host country. Depending on the scope of work, other permits, licenses, approvals, or certifications may also be required of the employer or mobile employee in advance or upon arrival.
Knowledge of these official systems and protocols is crucial, but cultural understanding and awareness are equally important. An understanding of the informal or contextual social rules and acceptable behaviors is also an essential step because it directly impacts employee safety, performance, and credibility.
In our example, before they depart, Jane would ideally undergo some form of cultural competence training related not only to German society in general but to the specific city and region in which they’re assigned. This may require the employer to implement or outsource certified culture coaching to help individuals navigate the nuances of life and business for a specific demographic.
The saying “it takes a village” is very fitting in the world of global mobility. Most likely, the following providers (among others) will be involved in Jane’s move to Germany:
While each of these service providers handles different aspects of your mobility program, they’re all interlinked. These various providers should not only address the main issues you are facing related to their service but also help you come up with ways to reduce costs and act as your educator for other challenges that can arise in your mobility program.
It’s important to find vendors who actively collaborate with your full extended vendor team and work together to define cost-saving initiatives and minimize time spent explaining the same information. They should also provide strategic guidance and best practice ideas for ways to handle different areas of your program.
Selecting the proper vendors to assist your organization can be a daunting and time-consuming process. To assist in the process and make it more manageable, consider reaching out to your professional network for references, checking with your local relocation council, or reviewing what relationships already exist within your organization. And keep in mind that the right providers should always operate as an extension of your mobility team to help resolve problems and guide decisions.
Expanding internationally requires coordination across many disciplines, including immigration, payroll, tax, legal, and employee support. Rather than relying on a single provider to manage every aspect, most organizations build a mobility ecosystem made up of internal stakeholders and specialized external vendors. When these groups are aligned, companies are better positioned to manage compliance requirements, control costs, and support employees throughout the assignment lifecycle.
Remember that communication with your mobile employees remains a critical component of your mobility program. Staying connected enables organizations to manage both corporate and employee risks, understand where work is being performed, and meet duty of care responsibilities.
While the steps outlined above aren’t exhaustive, they provide a practical foundation for organizations beginning their global mobility journey.
At GTN, we focus exclusively on the tax considerations that arise when employees work across borders. We support organizations by helping them understand individual and corporate tax implications, navigate compliance requirements, and align tax considerations with broader mobility strategies. If you would like to discuss how mobility tax fits into your global expansion plans, we’re happy to connect.