An expatriate salary that stays the same while the employee is on assignment (for example, Tokyo to London) is called what?

An expatriate salary that stays the same while the employee is on assignment (for example, Tokyo to London) is called what?

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

Answer: (C)

Keeping the expatriate’s base pay at the home-country level means the salary doesn’t change when they move to a different country. This approach, often called home-country compensation, provides consistency for the employee’s earnings regardless of where they are stationed. The package may include housing, cost-of-living or tax-related allowances, but the core salary remains the same as in the home country. Local-market adjustment would peg pay to the host country’s market rates, which isn’t described here. The balance-sheet approach aims to preserve purchasing power across postings, often through tax equalization and related adjustments, and isn’t defined by a fixed home-country base salary. A global assignment package is a broad term that can encompass various methods, but it doesn’t specify maintaining the home-country salary.

Keeping the expatriate’s base pay at the home-country level means the salary doesn’t change when they move to a different country. This approach, often called home-country compensation, provides consistency for the employee’s earnings regardless of where they are stationed. The package may include housing, cost-of-living or tax-related allowances, but the core salary remains the same as in the home country.

Local-market adjustment would peg pay to the host country’s market rates, which isn’t described here. The balance-sheet approach aims to preserve purchasing power across postings, often through tax equalization and related adjustments, and isn’t defined by a fixed home-country base salary. A global assignment package is a broad term that can encompass various methods, but it doesn’t specify maintaining the home-country salary.