The system identifies a portion of basic pay, known as “home spendable income”, which corresponds to the part of net salary used to meet ordinary expenses in the home country. In cases where the foreign country has a higher cost of living, the cost of living index is applied on the home spendable income to obtain a ‘foreign spendable share’ or host spendable income.

The objective is to determine additional compensation that offsets the cost-of-living differential and allows the worker to maintain the same purchasing power abroad as they had at home.

The Expendable Share of the annual home net salary that is ‘protected’ is determined based on the family status of the employee in the foreign country of expatriation.

Alternatively, expatriates may receive a fixed amount (Food & pocket) to reimburse their expenses on a monthly/lump-sum basis, regardless of the cost-of-living differential between their home and host country. The allowance is determined by valuing a basket of goods (including food, non-food items, and services) based on local prices that reflect the expatriate’s consumption patterns.

The system identifies a portion of basic pay, known as “home spendable income”, which corresponds to the part of net salary used to meet ordinary expenses in the home country. In cases where the foreign country has a higher cost of living, the cost of living index is applied on the home spendable income to obtain a ‘foreign spendable share’ or host spendable income.

The objective is to determine additional compensation that offsets the cost-of-living differential and allows the worker to maintain the same purchasing power abroad as they had at home.

The Expendable Share of the annual home net salary that is ‘protected’ is determined based on the family status of the employee in the foreign country of expatriation.

Alternatively, expatriates may receive a fixed amount (Food & pocket) to reimburse their expenses on a monthly/lump-sum basis, regardless of the cost-of-living differential between their home and host country. The allowance is determined by valuing a basket of goods (including food, non-food items, and services) based on local prices that reflect the expatriate’s consumption patterns.