TL;DR
- An expatriate, or expat, is someone who does not live in their own country. At work the term usually means an employee sent or hired to work in another country, typically for a fixed period, while keeping ties to their home country and often their home employer.
- There are four common kinds: the assigned expatriate sent by their employer, the self-initiated expatriate who moves and finds work, the local hire on a local contract, and the commuter or short-term assignee. The contract, pay and support differ for each.
- In the UK, whether someone is tax resident depends on statutory residence tests based on days and ties, and National Insurance while working abroad depends on whether the country has a social security agreement with the UK. Employers should settle immigration, tax, social security, pay, contract and support before anyone moves.
A software engineer moves from Manchester to Singapore for two years on her employer's project. A nurse leaves Manila for a permanent job in Leeds. A consultant flies to Frankfurt every Monday and home every Thursday. Which of them is an expatriate? In everyday speech, all three might be called expats. In HR, the word has a narrower use, and the difference decides the contract.
This article explains what an expatriate is, how the word differs from migrant and immigrant, the four kinds of expatriate employee, what an international assignment involves, the UK rules on tax residence and National Insurance that a move triggers, and a checklist for employers.
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What is an expatriate?
The Cambridge Dictionary defines an expatriate as “someone who does not live in their own country”, and notes the informal short form expat. The word comes from Latin, ex patria, out of one's native country.
In workplaces the term is narrower. An expatriate employee is usually someone who works in a country other than their own, for a period rather than for good, and who keeps ties to their home country, often including their home employer, home pension and an expected return. That is what separates the expatriate from the immigrant, though the line is one of intention and time rather than law.
| Term | Usual meaning |
|---|---|
| Expatriate | Lives and usually works outside their own country, often temporarily and often sent by an employer |
| Immigrant | Has moved to a country to settle there |
| Migrant | Moves between countries or regions for work, temporarily or permanently |
| Exile | Lives outside their country because they cannot return; Cambridge lists it as a term to compare |
The words carry connotations. Expat is often used for professionals from wealthier countries and migrant for workers from poorer ones, doing the same thing. A fair HR policy uses the same rules whichever word applies.
The four kinds of expatriate employee
- Assigned expatriate. Sent by the employer to another country for a defined period, usually one to five years, on an assignment contract with a return planned. This is the classic expat, and the most expensive.
- Self-initiated expatriate. Moved abroad on their own initiative and found work there, or negotiated to work from abroad for their existing employer. No assignment package; the contract depends on where they are employed.
- Local hire. A foreign national employed on a local contract in the host country, on local pay and terms. Legally an ordinary employee of the host entity, whatever their passport.
- Commuter or short-term assignee. Works in another country for days or weeks at a time, or for a few months, while remaining employed and resident at home. Cheaper than assignment, and easy to mishandle on tax and immigration.
The kind determines almost everything: which entity employs the person, where tax and social security are paid, what allowances apply and what support the employer owes. A policy that treats all four the same will overpay some and under-protect others.
What an international assignment involves
For an assigned expatriate, the employer usually arranges:
- Immigration. The right visa or permit for the person and any family, obtained before travel.
- Contract. An assignment letter setting the period, role, reporting line, pay basis, allowances, benefits and return terms, alongside or in place of the home contract.
- Pay and allowances. Home-based, host-based or hybrid pay; cost of living, housing, schooling and relocation allowances; and a stated approach to tax, such as equalisation, so that the move does not leave the person better or worse off on tax alone.
- Tax and social security. Registration in the host country, filing support, and a decision on where social security contributions are paid.
- Support. Relocation help, language and cultural preparation, a host-country point of contact and a plan for the family.
- Return. A role to come back to, agreed before departure, and a repatriation plan. Assignments most often fail at the end, when the returning employee finds that nobody planned for them.
Our employee onboarding guide covers the first weeks, which apply twice for an expatriate: once on arrival and once on return.
The UK rules a move triggers
Two sets of rules matter for anyone leaving or arriving in the UK. This is general information about GOV.UK guidance as published, not tax or legal advice; the rules are detailed and change, and specialist advice is usual for assignments.
Tax residence. GOV.UK's guide to working out your residence status says that whether you are UK resident “usually depends on how many days you spend in the UK in the tax year”. You are resident only if you meet one or more of the automatic UK tests or the sufficient ties test and do not meet any of the automatic overseas tests. The automatic UK tests include spending “183 or more days in the UK in the tax year”; the overseas tests include working “abroad full-time (averaging at least 35 hours a week)” and spending fewer than 91 days in the UK, of which no more than 30 were spent working. GOV.UK provides a residence status checker.
National Insurance while abroad. GOV.UK's guide to National Insurance if you go abroad says the position “depends on where you're working and how long for”. Where the country has a social security agreement with the UK, you may have to keep paying National Insurance in the UK and will need a “certificate of coverage” to show that you do not need to pay contributions in the host country. Where there is no agreement, you must pay UK National Insurance for the first 52 weeks of working abroad if you are working abroad temporarily, your employer has a place of business in the UK, you are ordinarily resident in the UK and you were living in the UK immediately before starting work abroad. Voluntary contributions may be possible to protect benefit entitlement.
Every host country has its own equivalents. An expatriate can end up resident, and taxed, in two places, which is why assignment policies deal with tax before pay.
Employer checklist before anyone moves
- Decide the kind. Assignment, self-initiated, local hire or commuter, and write the contract for that kind.
- Immigration first. No travel until the permit is in hand, for the employee and the family.
- Employing entity. Which company employs the person in the host country, and whether it has a legal presence there.
- Tax and social security. Residence in both countries, any agreement between them, certificates of coverage, and who pays for advice and filing.
- Pay basis and allowances. Written down, with the tax approach stated.
- Data and systems. Payroll, HR records and benefits set up for the host country; data protection across borders considered.
- Support and family. Relocation, schooling, healthcare, a local contact and a way to raise problems.
- Return. The role, the date and who owns the plan.
Our guide to the independent contractor covers the alternative some employers reach for, engaging someone abroad as a contractor, and the risks of getting that status wrong.
Managing expatriates well
- One manager, clearly. Host-country line management with a home-country sponsor, or the reverse, but decided and written down.
- Objectives that travel. The assignment has a purpose; set goals for it and review them on the same cycle as everyone else. Our remote work guide covers managing people you rarely see.
- Regular contact with home. Expatriates who lose touch with the home organisation are the ones who leave within a year of returning.
- Equal rules. The same policy for the engineer from Manchester and the nurse from Manila, whatever word is used for them.
Frequently asked questions
What is an expatriate?
An expatriate, or expat, is someone who does not live in their own country. In HR the term usually means an employee working in another country for a period, often sent by their employer on an assignment, while keeping ties to their home country and expecting to return.
What is the difference between an expatriate and an immigrant?
An immigrant has moved to a country to settle there. An expatriate lives abroad, usually temporarily, often for work, with ties to a home country. The distinction is one of intention and time rather than law, and the two words are often applied unevenly to people doing the same thing.
What are the types of expatriate employee?
Four common kinds: the assigned expatriate sent by their employer for a fixed period; the self-initiated expatriate who moves and finds work; the local hire on a host-country contract; and the commuter or short-term assignee who works abroad for days, weeks or months while remaining employed at home.
Does an expatriate pay UK tax?
It depends on residence. GOV.UK's statutory residence tests look at days spent in the UK and ties to it; someone working abroad full-time and spending fewer than 91 days in the UK, with no more than 30 working, is usually non-resident. Host-country tax applies separately. Take specialist advice.
Does an expatriate pay National Insurance while working abroad?
GOV.UK says it depends on where you work and for how long. In countries with a social security agreement with the UK, you may keep paying UK National Insurance with a certificate of coverage; in countries without one, you pay UK National Insurance for the first 52 weeks if you are working abroad temporarily for an employer with a UK place of business and were resident in the UK immediately before.
What should an employer arrange before sending someone abroad?
Immigration, the employing entity, the assignment contract, pay basis and allowances, tax and social security in both countries, payroll and data, family support and a return plan, all before the person travels.
Your next step
- Classify every employee working abroad into one of the four kinds.
- Check that each has a contract written for that kind, with tax and social security settled.
- For every assignment, write down the return role and date.
- Set assignment objectives and put them on the normal review cycle.
For the two onboardings every assignment involves, read and download our employee onboarding guide. The guide is free to read, and the PDF uses our short download form.
Want assignment approvals, objectives and check-ins in one place wherever people are based? Book a New Dynamics demo and bring your current mobility policy. You can also email contact@new-dynamics.com.
