Expatriate Payroll Processing

Our client, a holding company with 30 expatriates and three local employees was suffering under the burden of complicated payroll processing. Japanese salaries and non-monetary salaries had to be grossed up along with U.S. salaries.

The Problem

Our client needed to perform gross-up calculations on salaries, allowances, and non-monetary benefits while in the U.S. This operation was being handled by a human resources representative from Japan but he needed support. Additionally, the company wanted to keep expatriate salaries confidential.

Our Solution

After several meetings with the human resources representative from our client’s Japanese head office, we provided the following services:

Processed payroll information

  • Modified provided formats
  • Established submission timing
  • Determine the items and amounts that needed to be reported
  • Performed yearly gross-up adjustments

Processed expatriate information considering the following details:

  • Full-year resident status
  • Arrival and departure dates
  • Non-resident status (i.e. business trip)
  • Relocation status (alone or with family)

Established communication protocols

  • Set up new workflow
  • Provided pre-process report for our client to review
The Results

By proactively advising our client, they received the following benefits without having to retain the services of an expensive CPA firm.

  • Streamlined and seamless processing of payroll
  • Exemption from FICA and Medicare in the U.S. under the Japan-U.S. Social Security Agreement
  • Complete gross-up, salary payment, and withholding tax calculations
  • Accurate personal tax returns
  • Preserved confidentiality of expatriate salary
  • Giving advice in advance before problems occur

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