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Split payroll

Split Payroll

Split payroll refers to a compensation arrangement in which an employee receives a portion of their salary in one currency and the remainder in another currency. This system is commonly used for expatriates or employees working in international positions to manage exchange rate risks and local currency needs. Split payroll allows companies to meet the financial needs of employees living in multiple countries or regions with different currencies.

Example

An employee working in Europe for a U.S. company might receive 60% of their salary in euros and the remaining 40% in U.S. dollars to cover expenses in both regions.

Key points

• An arrangement where salary is paid in multiple currencies.

• Commonly used for expatriates or international employees.

• Helps manage exchange rate risks and local currency needs.

Quick Answers to Curious Questions

Why do companies offer split payroll to international employees?

It helps employees manage their expenses in different currencies and protects them from exchange rate fluctuations.

What are the advantages of receiving a split payroll for expatriates?

It ensures they have funds in both their home and host country currencies, minimizing currency conversion costs and exchange rate risks.

How does split payroll affect a company’s payroll management system?

It adds complexity, requiring the company to manage multiple currencies and comply with various tax and regulatory requirements.

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