Understanding the foundations of mobility tax

We all know that one quote about taxes (nothing is certain except…blah, blah, blah) but here are a couple of quotes I also have to agree with related to taxes:

Albert Einstein: "The hardest thing in the world to understand is the income tax."

Alfred E. Neuman: "Today, it takes more brains and effort to make out the income-tax form than it does to make the income."

So, in an effort to make tax talk easier to understand, AIRINC and GTN joined forces to do a 3-part webinar series designed to provide you with a comprehensive overview of everything you need to know about mobility tax. In the first of the three, they focus on some typical mobility scenarios and break down the tax implications, review what is and is not taxable, grapple with the basics of international tax (income, payroll, soc sec) and introduce “gross-ups”.

Mobility tax support is really just to account for the taxability of an employee's relocation and assignment costs, in all jurisdictions where tax is owed. It impacts both individual taxation and corporate payroll taxation. According to Brett Sipes of GTN, there are three main categories that most mobility situations fall into:

1. Assignments: where the employee stays on the home country payroll and can include various durations (examples of which would be short-term and long-term assignments, business travel, and temporary remote work, rotationals, etc. 
2. Transfers: where the employee moves to host (or destination) payroll and physically moves from one location to another (although not necessarily permanently)
3. Other: Virtual assignments, permanent remote work, commuters, hybrid arrangements, etc.

Companies have added policies over the years to handle the wide variety of situations that can occur. Within each policy are a set of benefits that have a potential tax impact for the employee or the company or both. One of the key things they point out is:

"IF an employee is working in a location other than their home location or location of their employer, THEN there can be income tax, social security, and payroll/reporting concerns that need to be addressed."

If you are new to mobility or just looking for a refresher, tap into the webinar. If you are looking for further areas to consider around global mobility and tax, try one of these:

Global mobility and adjusting to increased tax risks

Tax regulations are adjusting to remote work

What does the "jock tax" have to do with global mobility?

Rethinking the future of global mobility and the challenges of tax compliance