In global mobility, choosing between home-based vs host plus assignments is a critical decision that impacts tax planning, talent retention, and overall cost. These two compensation models serve different assignment strategies, and understanding their differences helps ensure the best outcome for both the company and the employee.
Two Compensation Models, Two Strategic Paths
There are important factors to consider regarding the home and host locations, the goals of the assignment, and the financial capabilities of both the employer and employee when weighing the pros and cons of the two different assignment approaches — and ultimately selecting the right approach for your company and your employee. The Balance Sheet and the Host Plus approaches both address each of these issues in different ways.
If you need a refresher on the differences between the two most common assignment types: Home-Based Tax Equalized (also known as the Balance Sheet Approach) and Host Plus, download AIRINC’s paper on the basics on these two assignment types, the factors to consider when using either approach, and the scenarios that they best support.
What Is the Home-Based (Tax Equalized) Assignment Model?
The Home-Based Tax Equalized approach aims to ensure that the assignee’s compensation is consistent with what they would have received in their home country. Employers often use this method for:
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Short- to mid-term international assignments
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Assignments to high-cost or high-tax locations
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Roles where repatriation is expected
This model typically includes base salary, allowances for housing and cost of living, and tax equalization, where the employer pays the employee’s actual taxes and deducts a hypothetical tax equivalent to their home country tax rate.
Learn more from ECA International’s Home-Based Approach guide.
How the Host Plus Assignment Model Works
The Host Plus model pays the employee according to the local salary structure in the host country, with select allowances such as housing, education, or tax support. It is often favored for:
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Long-term or localized assignments
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Moves to countries with lower living costs
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Permanent transfers or regionally hired expatriates
While it may appear more cost-effective, mobility professionals must consider potential hidden costs like tax gross-ups or retention issues if the employee feels undercompensated.
AIRINC covers these tradeoffs in The Hidden Costs of Host-Plus Assignments.
Choosing the Right Approach for Your Mobility Program
When evaluating which model to use, global mobility teams should weigh:
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Duration of assignment
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Cost-of-living differentials
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Tax implications
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Talent strategy
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Employee expectations and equity across the program
A hybrid or flexible mobility policy may even blend elements of both approaches to support varied assignment types.
Final Thoughts
There’s no one-size-fits-all answer. The best solution lies in understanding the strategic intent of the assignment and the individual circumstances of the assignee. By leveraging tools like AIRINC’s comparative frameworks and tax calculators, mobility specialists can build policies that are both competitive and cost-effective.
If you’re interested in diving deeper, don’t miss AIRINC’s downloadable guide that breaks down these approaches side by side.
