GPHR (GPHR) International Total Rewards 2

Question 1

A multinational company uses the 'balance sheet approach' for expatriate compensation. What is the PRIMARY goal of this method?

Accepted Answer

Maintain the expatriate's home-country purchasing power while abroad

Answer

The balance sheet approach ensures expatriates neither gain nor lose financially compared to their home-country standard of living.

Question 2

Which element is MOST commonly used to compensate expatriates for the additional burden of living in a high-cost or hardship location?

Accepted Answer

Hardship or location premium allowances

Answer

Hardship or location premiums are standard components of expatriate pay packages designed to incentivize assignments to difficult or high-cost postings.

Question 3

A global company discovers its short-term incentive plan pays out at very different effective rates in different countries due to varying tax structures. The BEST long-term solution is to:

Accepted Answer

Design country-specific net-pay targets supported by tax gross-up calculations

Answer

Designing net-pay targets with tax gross-ups ensures equitable after-tax value across jurisdictions with different income tax rates.

Question 4

Under 'tax equalization,' when an expatriate's hypothetical home-country tax exceeds actual host-country tax, the difference is:

Accepted Answer

Paid to the employee as a tax equalization credit

Answer

In tax equalization, when the employee owes less tax than the hypothetical home amount, the employer pays the difference to the employee as a credit.

Question 5

Which international benefits practice BEST addresses the pension continuity challenge for long-term global assignees?

Accepted Answer

Providing a home-country pension continuation or international pension plan

Answer

Home-country pension continuation or an international pension plan preserves retirement benefit accrual for assignees who move between multiple countries.

GPHR - Global Professional in Human Resources Practice Test

GPHR - Global Professional in Human Resources Practice Test

GPHR (GPHR) International Total Rewards 2