What is an expatriate?

An expatriate (often shortened to “expat”) is a person who lives and works in a country other than their country of origin. The term is most common in business and global mobility. A company may send an employee abroad on assignment, or a person may move overseas for work on their own.

Expatriate vs. immigrant

The traditional definition of an expatriate, or “expat,” is someone who lives outside their home country for a set period, usually on a corporate contract or a specific assignment. The expat plans to return home when the assignment ends. An immigrant was traditionally someone who moves to a new country to settle for the long term or permanently. Immigrants often seek local integration, legal residency, or citizenship.

What employers typically arrange for expatriates

Sending a worker abroad creates obligations that extend well beyond a standard domestic hire. Employers generally manage:

• Work authorization: The sending company sponsors the worker's work permit or work visa in the host country, working with local immigration authorities. Without valid authorization, both the worker and employer face legal risk.

• Relocation costs: Employers cover moving expenses, temporary housing, and sometimes school fees for accompanying children, usually under a formal relocation package.

• Tax support: Most employers provide tax preparation assistance and apply a formal tax equalization or tax protection policy to prevent double taxation.

• Benefits continuation or replacement: The employer decides whether the worker stays on home-country benefit plans, transitions to host-country plans, or receives supplemental allowances for gaps in coverage.

• Ongoing allowances: Cost-of-living adjustments, housing allowances, and home-leave travel are common components of an expatriate compensation package, especially for long-term assignments.

Each element requires coordination between HR, legal, payroll, and often a specialist mobility provider.

Tax obligations for expatriate's on international assignments

An expatriate's tax position depends on both their home country's rules and the host country's rules. Many countries tax residents on worldwide income, so an expat can owe tax in two jurisdictions simultaneously.

Bilateral tax treaties, which pairs of countries negotiate directly with each other, reduce or eliminate double taxation by allocating taxing rights between the two governments. Where no treaty exists, both countries may claim full taxing rights on the same income.

To shield expatriates from paying more tax than they would at home, many employers apply a tax equalization policy. The employer calculates a notional home-country tax, deducts that amount from the worker's gross pay, and absorbs any additional tax liability the host country imposes.

A tax protection policy is similar but narrower: it only covers excess liability rather than also capturing any tax savings the worker would otherwise gain.

The US Internal Revenue Service (IRS) and HM Revenue & Customs (HMRC) in the UK both publish guidance on expatriate tax treatment for their residents working abroad, as do the tax authorities of most host countries.

Social security contributions for expatriate's on international assignments

Social security contributions ordinarily follow the country of employment. A worker on an international assignment therefore typically owes contributions to the host country's pension and social insurance system rather than the home country's.

Totalization agreements are bilateral treaties that coordinate social security systems between countries. They prevent dual contributions by designating one country as responsible for the worker's social insurance for the duration of the assignment.

The US Social Security Administration (SSA) has totalization agreements with a network of countries. EU member states coordinate social security through Regulation (EC) No 883/2004. Where no totalization agreement covers a given country pair, the employer and worker may each owe contributions to both systems. This can substantially increase the total cost of the assignment.

Using an EOR for expatriate assignments

When a company sends someone to a country where it has no registered legal entity, it cannot employ that person directly without first incorporating locally, which can take months. An Employer of Record (EOR) solves this by acting as the legal employer in the host country while the worker carries out their role for the sending company.

The EOR handles local employment contracts, payroll, statutory tax withholding, and social security contributions. On the immigration side, the EOR or a partnered immigration provider manages work permit applications and renewals. Deel Mobility covers over 70 countries and coordinates the full relocation process, from visa and work permit support to compliant local employment.

How does Deel Mobility support expatriates?

Deel Mobility supports expatriates by handling their immigration and relocation paperwork end to end: work permit and visa applications, short-term business visas, and immigration document reviews and renewals for existing permits.

• Visa and work permit processing: Deel Mobility manages the full work permit and visa process, letting companies hire and move talent regardless of nationality — for example, helping an American employee get the right to work in Japan for a three-year assignment.

• Short-term travel: applications for short-term business visas and business visa letters, with forms and submissions handled by mobility specialists.

• EOR-sponsored visas: a dedicated EOR Sponsored Visa Application process for hiring someone in a country where their nationality doesn't match and they lack the right to work; Deel manages the visa process as the employer of record.

• Compliance: Immigration Document Review of existing work permits and renewals before expiry, preventing compliance gaps and speeding up onboarding.

With Deel Mobility, the employer has access to a centralized dashboard to view in-flight applications, track expiring work permits, see costs, initiate cases, and run pre-contract assessments with instant document review.

Employees track case status in real time, receive updates, see outstanding tasks, request business visa letters, and access additional services such as relocation support, banking and local insurance.

Expatriate key facts

• An expatriate is someone who lives and works abroad, not someone who has permanently emigrated.

• Employers typically manage work authorization, relocation costs, tax equalization, and benefits adjustments for expatriate employees.

• Bilateral tax treaties and totalization agreements reduce double taxation and dual social security costs, but their coverage varies by country pair.

• Companies without a legal entity in the destination country can use an EOR to employ expatriates compliantly.

• Assignments longer than 183 days in many treaty jurisdictions trigger full tax residency in the host country. This shifts the employer's compliance obligations and can increase the overall cost of the assignment.

FAQ

How does an expatriate differ from an immigrant?

An expatriate moves abroad for work and typically plans to return home or relocate again. An immigrant moves with the intent to settle permanently and usually acquires residency or citizenship through a government process independent of any employer.

What is tax equalization for expatriates?

Tax equalization is an employer policy that ensures an expatriate pays the same total tax they would have paid at home. The employer withholds a notional home-country tax and covers any additional host-country tax liability above that amount.

Do expatriates always need a work visa?

In most cases, yes. Working in a foreign country without proper authorization violates local immigration law, exposing both the worker and the employer to fines and entry bans. Exceptions exist for short business visits and within free-movement areas such as the European Union.

Can a company send an expatriate to a country where it has no legal entity?

Yes, through an Employer of Record. The EOR acts as the local legal employer, managing contracts, payroll, and compliance, while the worker carries out their role for the sending company.

What is the difference between a short-term and a long-term assignment?

Short-term assignments typically run up to 12 months and usually preserve home-country employment terms and benefits. Long-term assignments generally exceed 12 months and often require localizing the contract, benefits, and tax status. In many bilateral tax treaties, the 183-day threshold determines when the host country gains primary taxing rights.

Tax and immigration rules for expatriate employees vary by country and treaty. A qualified tax advisor and immigration counsel can provide guidance specific to each assignment.