Split Payroll

Split payroll is an arrangement in which an employee's total compensation is divided and paid partly through payroll in their home country and partly through payroll in their host country, commonly used for expatriates or internationally mobile employees whose work spans two different tax jurisdictions. This structure differs from shadow payroll, which involves a parallel calculation for reporting purposes without an actual separate payment, since split payroll involves genuine payments being disbursed through two distinct payroll systems. Companies use split payroll arrangements for various reasons, including addressing currency needs the employee may have in both locations, managing specific tax planning considerations, or accommodating certain benefits or retirement contributions that may need to continue being processed through the employee's home country system even while they work abroad. Structuring split payroll correctly requires careful coordination to ensure the employee's total compensation is accurately tracked and properly taxed across both jurisdictions. Given the complexity involved in managing compliant payroll processes across two separate countries simultaneously for a single employee, companies typically work with specialized global mobility and payroll experts experienced in structuring and administering split payroll arrangements accurately.