Home Country
What is Home Country?
The country where an employee is normally based and from which they are deployed on an international assignment. Often used as the baseline for compensation, tax, and benefits benchmarking.
In global mobility, the home country serves as the reference point for many assignment-related decisions. Compensation is typically benchmarked against home country norms using the balance sheet approach. Tax equalization policies use the home country tax rate as the baseline. Benefits programs are often maintained in the home country during the assignment.
The home country designation also affects immigration planning, as the employee's passport and nationality determine visa requirements and processing timelines. Social security coverage and totalization agreements are linked to the home country.
In some cases, the concept of home country becomes ambiguous, particularly for employees who have been on multiple consecutive assignments or who have changed their personal residence. Organizations should have clear policies for determining and, if necessary, reassigning home country status.
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Frequently Asked Questions
What is the home country in global mobility?
The home country in global mobility is the country where an employee is based before and after an international assignment. The home country is typically the location of the employee's primary employment contract, tax residency, and family base. Home country status determines payroll continuity, hypothetical tax calculations, and the assignee's eventual return location.
How does home country status work during an assignment?
Home country status works by anchoring the employee's employment relationship to their original country throughout the international assignment. The employee typically remains on home country payroll, retains home country benefits, and continues building home country social security entitlements. Tax equalization and balance sheet allowances are calculated relative to home country compensation and cost of living.
Why does the home country designation matter?
Home country designation matters because it determines tax treatment, payroll structure, social security coverage, and assignment policy application. Mistakes in home country designation can trigger duplicate tax filings, social security gaps, and miscalculated allowances. The home country is also the assignee's protected return path at assignment end through repatriation rights in the assignment letter.
What is the difference between home country and host country?
The home country is where the assignee is based pre-assignment and where they will typically return at assignment end. The host country is where the assignee temporarily lives and works during the assignment. Mobility programs balance home country protection through allowances and tax equalization with host country compliance through immigration, payroll, and tax filings.
Related Terms
Host Country
The country where an employee is sent to work during an international assignment, as opposed to their home (or origin) country.
Balance Sheet Approach
A compensation methodology for international assignees that aims to keep employees financially 'whole' relative to their home country, by separately tracking income, taxes, housing, and goods and services costs.
Tax Equalization
A compensation policy designed to ensure that an employee on international assignment pays no more or less tax than they would have in their home country, with the employer absorbing any difference.