In expatriate compensation, which term describes a salary maintained at the home-country level?

In expatriate compensation, which term describes a salary maintained at the home-country level?

• A. Global assignment package
• B. Home-country compensation
• C. Local-market salary
• D. Balance-sheet compensation

Answer: (B)

When you keep an expatriate’s pay at the level of their home country, you’re describing home-country compensation. This approach preserves the employee’s purchasing power and income parity with colleagues back home, regardless of the host country’s cost of living or currency changes. It often involves maintaining the base salary constant at the home-country level and adding allowances (such as housing, cost of living, or education) to help cover international assignments. The other concepts describe different structures: a global assignment package refers to the overall set of pay and allowances for the assignment; a local-market salary ties pay to the host country’s market rates; balance-sheet compensation focuses on ensuring the employee’s net income after taxes aligns with what they would earn at home, which is related but framed around tax neutrality rather than simply preserving home-country base pay.

When you keep an expatriate’s pay at the level of their home country, you’re describing home-country compensation. This approach preserves the employee’s purchasing power and income parity with colleagues back home, regardless of the host country’s cost of living or currency changes. It often involves maintaining the base salary constant at the home-country level and adding allowances (such as housing, cost of living, or education) to help cover international assignments.

The other concepts describe different structures: a global assignment package refers to the overall set of pay and allowances for the assignment; a local-market salary ties pay to the host country’s market rates; balance-sheet compensation focuses on ensuring the employee’s net income after taxes aligns with what they would earn at home, which is related but framed around tax neutrality rather than simply preserving home-country base pay.