Withholding

When working for a foreign entity, you have no access to withholding on your income. Federal Estimated Calculations should be done to determine projected tax liability and estimated payments made to the taxing authorities to avoid underpayment and/or late payment penalties.


Tax Equalization

As the tax rate is much higher and everything in the remuneration package is taxed, often the employer will pay the difference between what the tax would have been had you stayed in the US and what was actually paid while overseas. This payment, of course, is considered income and must be taken into account when determining total income received.