Notes on setting salaries for overseas employees

What do I need to pay attention to when designing remuneration packages for overseas employees?

When hiring overseas employees, Chinese companies should understand the relevant policies in advance and set up compensation and benefit packages for them that are in line with local practices in order to carry out their operations there in a compliant manner. Based on our practical experience in serving clients, we have summarised the following points to note when setting remuneration for overseas employees:

It is generally recommended to communicate with employees on gross pay rather than net pay. In some countries and regions, the amount of employee's tax refund is based on his/her family situation (e.g. family income, children's situation, etc.), and employers do not have access to such information, making the conversion from net pay to gross pay difficult to realise.

It is generally recommended to communicate with employees about their annual salary rather than their monthly salary, and many countries and regions have a statutory requirement for a 13/14 salary. If a monthly salary is communicated to the employee and the local 13/14 salary requirement is not known in advance, the actual salary that needs to be paid to the employee may be more than the organisation expects.

Find out in advance if there are some statutory requirements for allowances in the destination country. For example, in some European countries (e.g. the UK and Spain), employers are required to provide home working expenses and allowances for employees who work from home, while in Brazil there are mandatory requirements for holiday bonuses and travelling allowances. Knowing these statutory requirements in advance can help organisations to better plan their budgets.