Global Workforce

Expat Tax & Relocation Software

Expat tax software for employers, also called expatriate or global mobility tax software, manages the tax side of sending employees abroad and relocating them.

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By LeadChange Research Team

LeadChange may earn a fee when you request pricing through our site or follow a sponsored link. Rankings are computed without knowing which vendors pay us.

Research in progress

We are verifying expat tax & relocation products against vendors’ official documentation and pricing pages. A ranking by LeadChange Score appears here once at least 3 products pass our research checks. Until then, this page explains what the software does, what we evaluate and how to choose.

What we evaluate

  • Day and location tracking

    Records where assignees and travelers work each day for tax tests.

  • Tax equalization

    Calculates hypothetical tax and year-end equalization settlements.

  • Shadow payroll support

    Supplies or runs host-country shadow payroll for assignees.

  • Gross-up calculation

    Grosses up relocation and assignment benefits for tax.

  • Assignee compensation collection

    Collects pay, allowances, expenses and equity income by country.

  • Assignment cost projections

    Estimates total tax and benefit cost before an assignment starts.

  • Social security coverage tracking

    Tracks certificates of coverage and their expiry.

  • Withholding exemption tracking

    Records employee withholding exemption statements such as Form 673.

  • Advisor collaboration

    Shares assignee data and documents securely with tax advisors.

  • Secure document vault

    Stores tax documents with access controls and audit logs.

Who needs expat tax & relocation software?

You need expat tax software when you send employees on international assignments, relocate them between countries, or let them work from abroad, and the tax effects are tracked in spreadsheets and advisor emails. The signals are tax equalization settlements that take months, relocation benefits paid without gross-up decisions, and no reliable record of where people worked on which days.

The rules make tracking necessary. The IRS says U.S. citizens and resident aliens are taxed on worldwide income wherever they live. The foreign earned income exclusion, claimed on Form 2555, depends on tests such as being physically present in a foreign country 330 full days during a period of 12 consecutive months. Employees can give their employer Form 673 to claim an exemption from U.S. income tax withholding on wages earned abroad, to the extent of the foreign earned income and housing exclusions.

Relocation is taxable too. IRS Publication 15-B says the exclusion for qualified moving expense reimbursements has been permanently eliminated, except for certain members of the Armed Forces and the intelligence community, so most employers must decide whether to gross up relocation payments. With one or two assignees, an advisor's service and a good tracker may be enough.

How to choose expat tax & relocation software

Choose on how well the tool connects four things: where people are, what they are paid, what the tax policy promises them, and what the advisors and payroll teams need to file. Gaps between those steps are where cost and penalties appear.

Bring a real assignment to the demo and ask the vendor to show the day count, tax cost estimate, equalization calculation and shadow payroll output for it.

  1. Day counting and location tracking

    Residence, exclusions and host-country liability often depend on days in each country, such as the IRS physical presence test of 330 full days in 12 consecutive months.

  2. Tax equalization and hypothetical tax

    Equalization policies promise assignees they pay no more or less than at home, which needs a hypothetical tax calculation and a year-end settlement.

  3. Shadow payroll support

    When an assignee stays on home payroll but owes host-country tax, a shadow payroll reports and withholds there.

  4. Gross-up calculations

    Relocation and assignment benefits are generally taxable, so gross-ups decide who bears the tax.

  5. Assignee compensation and benefits data

    Allowances, housing, home leave, bonuses and equity all affect tax in more than one country.

  6. Social security coverage tracking

    Totalization agreements avoid double social security taxation, and an exemption requires a certificate of coverage.

Requirements by company size

  • Small businesses

    • Simple day tracking for people working abroad
    • Gross-up calculation for relocation payments
    • Easy data sharing with a tax advisor

    Watch out for

    • Platforms built for large assignment programs
    • Advisor services bundled at high fixed fees
    • Employees working from abroad that nobody tracks

  • Mid-sized companies

    • Tax equalization with hypothetical tax and settlements
    • Shadow payroll data feeds
    • Assignment cost projections

    Watch out for

    • Compensation data collected by hand from several systems
    • Settlements delayed by missing data
    • Tools tied to one advisor firm

  • Enterprises

    • Many policies, countries and assignment types
    • Integration with payroll, expenses, equity and travel systems
    • Audit trail and secure document handling

    Watch out for

    • Equity income across countries handled outside the tool
    • Business traveler tracking left out of scope
    • Long integration projects across payroll providers

Red flags

  • Day counts rely only on annual employee self-reporting
  • Equalization settlements are calculated outside the system
  • No record of which benefits were grossed up and why
  • The tool works only with one advisor firm
  • No tracking of certificates of coverage

Frequently asked questions

What is expat tax software for employers?

It is software that manages the tax side of international assignments and relocations for the employer. It tracks where assignees work, calculates tax equalization and hypothetical tax, supports shadow payroll, grosses up relocation and assignment benefits and shares data with tax advisors. It is different from consumer software that individuals use to file their own returns.

What is tax equalization?

Tax equalization is a policy in which the employer makes sure an assignee pays roughly the same tax as if they had stayed home. The employer withholds a hypothetical home-country tax and pays the actual home and host taxes, then settles the difference after returns are filed. Software calculates the hypothetical tax and the settlement.

What is shadow payroll?

Shadow payroll is a payroll run in a host country for an employee who is still paid through the home-country payroll. It reports income and withholds tax where required in the host country without paying the employee twice. Expat tax tools supply the compensation data that shadow payroll needs.

Are relocation payments taxable to employees?

Generally yes. IRS Publication 15-B says the exclusion for qualified moving expense reimbursements has been permanently eliminated, except for certain members of the Armed Forces on active duty and certain employees and new appointees of the intelligence community. Many employers gross up relocation payments so the employee does not bear the tax. Confirm treatment with your tax advisor.

Do U.S. employees on assignment abroad still pay U.S. tax?

U.S. citizens and resident aliens generally do. The IRS says their worldwide income, including wages, is subject to U.S. income tax regardless of where they live. The foreign earned income exclusion on Form 2555 and the foreign tax credit on Form 1116 may reduce double taxation, so employers track pay and days carefully.

What is the 330-day rule?

It is the IRS physical presence test for the foreign earned income exclusion. A person meets it if they are physically present in a foreign country or countries 330 full days during any period of 12 consecutive months. Day tracking in expat tax software helps assignees and advisors see whether the test is met.

Can an employer stop U.S. income tax withholding for an employee abroad?

An employee can give the U.S. employer Form 673 to claim an exemption from U.S. income tax withholding on wages earned abroad, to the extent of the foreign earned income and foreign housing exclusions. The employer still needs to track whether the employee continues to qualify.

How much does expat tax software cost?

Pricing is usually per assignee or tracked traveler, by module, or bundled with advisor services. Large programs are quoted individually. Ask what advisor fees, shadow payroll fees and integration work are included, because services often cost more than the software.

How we research

Products are ranked by the LeadChange Score, computed only from verified facts: capability coverage (30%), pricing transparency and value (20%), integrations and API (15%), security and compliance (15%), fit and support (10%) and data confidence (10%), times a category fit that lowers products built for another job. Payment never changes a score or a position.

Read the full methodology

  • Facts, not impressions

    Every input is a fact verified against vendors’ official documentation, with the date we last checked it.

  • Missing data scores zero

    We never assume a feature; unverified items lower the confidence label.

  • Independent of revenue

    Rankings are computed before and without knowing which vendors pay us.

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