Mobility Strategy - Market Practices

Glossary of International Mobility Terms

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TERM DEFINITION Hypothetical Tax The theoretical tax deducted from assignee's salary is intended to approximate the taxes that would have been paid if the assignee had never left their home country. This includes state, province and canton taxes, as well as federal and social taxes, as applicable. International Transfer A transfer to another country in which it is intended that the employee shall be treated as a locally hired employee. Local Employee An employee hired locally and compensated under the salary and benefits program applicable to citizens of the country in which they are employed. Localization The transition of the assignee's status to that of a local national employee in the host country/location for salary and benefits purposes, with the understanding that the employee does not intend to return to their original country of employment. Assignee premiums, differentials, benefits, etc., may be ceased or phased out over a period of time. Net Pay The amount of pay the employee actually receives in their bank account after all taxes and other deductions are withheld. Reassignment When the assignee is relocated from one assignment country to another assignment country. Repatriation The return of the assignee and accompanying family, as applicable, to the home country location at the completion of the international assignment. Rate of Exchange (ROE) Exchange rate between two (2) currencies. Relocation Management Company (RMC) An independent third-party provider assigned to manage an assignee's/employee's relocation logistics and benefits. Secondment The concept of "secondment" will differ depending on the realm (labor law, social security, etc.). From a labor law point of view, it means that the contract with the home entity is maintained. From a social security point of view, it means that the assignee remains under their home social security scheme and is exempted from social security contributions in the host country. Spendable Income The portion of base salary that is normally spent on goods and services (such as food, clothing, entertainment, medical expenses, etc.) by an average person in that country, of that grade (income level) and family size.

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