U.S. Individual Income Tax Return (Form 1040) Preparation, Tax Consulting, and Payroll Support by U.S. CPA


Payroll Service Overview

Our firm provides the following payroll services to corporate clients.

U.S. Payroll Calculation

      • Set up of payroll withholding items, such as Federal individual income tax, state individual income tax, local individual income tax, Social Security tax, Medicare tax, and state disability insurance
      • Set up of other non-taxable items
      • Support of payroll department with ADP and its administrative tasks
      • Consultation of taxable/non-taxable item determination
      • Payroll calculation
      • Year-end adjustment


Net Guarantee Payroll Scheme

There are 2 methodologies to determine the amount of salary and wages to expatriates for their international assignments.  One is called Gross-Pay scheme, which determines the remuneration based on the Gross amount inclusive of income taxes and other payments (before tax) in their home and host countries.  This scheme may result in the expatriate’s net salary (after tax) to be more or less than it would have been had they not accepted the assignment.   

The other methodology is called Net-Guaranteed-Pay scheme, by which the remuneration is based on the net amount (after tax) paid in home country and thereby adding income taxes and other payments to define the Gross.  The amount of net salary, therefore, remains the same as it was before the assignment, i.e., net-guaranteed, and hence the assignment is tax neutral for the employee.   

Gross-Pay scheme is easier to implement and maintain but is more likely to trigger issues relating to unfairnessfor the expatriate due to fluctuation in remuneration between pre- and during- assignment as well as inequality among expatriates.  Although Net-Guaranteed-Pay scheme is more complicated, a number of international companies tend to adopt this scheme.

We offer the following services:

      • If Gross-Pay scheme is adopted, analysis of potential issues and recommendations for improvement on expatriates’ payroll system.  
      • Consultation on the implementation and maintenance of Net-Guaranteed-Pay Scheme , including assistance on drafting company policy
      • Support on determining the amount of net payment and assistance on overall calculation


Gross-Up Calculation

Under Net-Guaranteed-Pay scheme, it is necessary to calculate the amount of payroll tax withholding and gross pay, based on the guaranteed net payment amount.  This calculation, taking a “backwards” approach, is called Gross-Up, and the following are some examples of related services we can provide:

          • Gross-up calculation for each payroll

          • Gross-up adjustment at beginning of the year and/or year-end

          • Gross-up calculation for one-time pay

          • Cost (company budget) projection for annual gross payroll

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