If the HR team in Germany follows a home-based approach to assignment pay, it may find that:

Comprehensive and Detailed Explanatio n:

The home-based balance sheet method ensures pay consistency with the home country but is

administratively complex and expensive. It requires:

Multiple allowances (e.g., COLA, housing, tax equalization)

Ongoing calculations and adjustments

Cross-border payroll coordination

This complexity drives up operational costs and resource demands.

GPHR Study Guide Extract – Global Compensation and Benefits / Home-Based Compensation

Models:

“The home-based approach is resource-intensive and increases administrative complexity due to tax

management, exchange rate monitoring, and benefit coordination.”