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GTN Mobility Tax Blog

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    Author Matt Yadamiec

     
    Matt joined GTN in 2015 and serves as Director at GTN. He has over 15 years of expatriate tax experience, advising companies on matters such as Home and Host country tax filing requirements, global compensation and equity reporting, and cross border tax compliance and consulting. He enjoys collaborating with his clients, offering responsive and personalized assistance for their global mobility needs and providing explanations to issues in a clear and concise manner for both program managers and mobile employees. +1.484.615.7107 | myadamiec@gtn.com

    Are your employees that receive equity compensation creating a tax withholding issue?

    When it comes to payroll reporting and withholding for equity compensation, companies don't always realize they may be non-compliant if they have a mobile workforce. These companies may be unaware of the rules in the various jurisdictions their employees have worked, and they may not have processes in place to allow for the tracking of employees. For these reasons, the payroll reporting and withholding, related to equity income, may be handled as if the individual had only worked in one location. However, this approach is often not appropriate for mobile employees working in multiple locations since reporting and withholding rules can vary for each jurisdiction.

    Withholding Social Security Tax from Wages—Things to Consider

    US social security tax is withheld from employees’ wages under the Federal Insurance Contributions Act (FICA), which provides funding for the Social Security and Medicare programs. The goal of the Social Security program is to offer retirement, disability, and survivor’s benefits, whereas Medicare provides health insurance. 

    Although many companies believe they have a good process in place to address the withholding of these taxes for their US-based employees that work in the US, it is critical that they review and understand the rules for their internationally mobile population. Through proper review and planning, companies can mitigate risks and may also achieve substantial cost savings.