There are two circumstances in which an international employee might request an advance.
Salary Advance - Payroll Advances
Situation:
You are required to pay many months of rent in advance. Money is advanced and then taken out of your normal salary over the course of several months (since rent is something that is calculated within your monthly salary).
Example:
A worker in Thailand finds an apartment for $375 per month, but they are required to pay a full year in advance. A payroll advance for $4,500 is requested and deposited into the worker's account. Over the next 12 months, $375 is deducted from each paycheck.
How this looks on a paystub:
A: Normal Salary is given and deducted from MTD account.
B: Total advance that was paid*
C: Amount deducted from this month's pay
D: Total amount deducted so far this year (6 months worth)**
*The $4,500 will not deduct from the MTD account at the time of payment. It will deduct over the course of the year, as normal salary is paid.
**If you receive other advances throughout the year, they will be reflected in the YTD amount.
Allowance Advance - International Allowance Submissions
Situation:
You have a large expense that you need additional funds to cover, so you request an International Allowance. The amount is more than the cash you have on hand or than you can float on a credit card, so you need the funds before the next pay date. On the Intl Allowance form, you request the funds to be advanced.
Example:
A worker finds the perfect vehicle on Oct. 27 for just over $5,000. She needs the funds to pay cash for the vehicle before it is sold to someone else, so she requests the advance to be paid on Oct. 31, instead of waiting until the next paycheck.
How this looks on a paystub:
A: Amount needed for the car, which was advanced on Oct. 31
B: Total bonus amount, after buffer for taxes were added.*
C: Net pay on November 15**
*The total bonus amount will be deducted from the MTD account once it appears on the paystub (not when it is advanced).
**Even with the tax buffer, the net pay on this check was about $1,000 less than this employee normally nets on payday. Usually when you request a large bonus, you will pay a greater percentage of federal income tax on the bonus and on your normal salary. Depending on other earnings, it is likely you will recoup much of this when filing taxes the next year.
