Show Notes - April 21st 2021
This week on The View From The Top we met Steve Brown, Head of Talent and Career Mobility at Electronic Arts. Electronic Arts is the world’s leading video gaming company in the world. Steve, a board member of BAMM, is a Mobility expert and thought leader who in previous roles at Nike and Accenture leveraged his expertise to build, elevate and run complex Mobility programs and drive global expansion. He is passionate about the idea that Global Talent Mobility is more than just a service that should provide a great employee experience. At EA, his aspiration is to leverage Mobility as a strategy to attract and develop global, diverse talent and differentiate EA in the marketplace.
Steve found his way into Mobility through inspiration from watching old 8 mm film of his grandparents’ travels. For Steve, Mobility is more than moving people. He views it and his position as more a way of bringing people and perspectives together. Steve actually started his career as an accountant in corporate tax which led him to working on expatriate tax returns with Benivo Strategy Council member and Mobility industry legend, Wes Okumura.
Watch the full episode to learn about the Mobility program at Electronic Arts and their views on using the program as a career growth tool, his thoughts on talent and mobility working together, and how EA uses their mobility program to optimize the EA employee experience.
Immigration Update
By Julia Onslow-Cole from Fragomen
- Travel in Europe has become more complex. The European Travel Ban is still in place and the exemptions for urgent business travel have become easier. However, there are now flight bans. These are much more complex to navigate. The Flight Bans are placed on the flight carriers and are nonnegotiable.
- There is particularly difficulty traveling from Brazil.
- The Quarantine rules across Europe are tightening up. From May 15th the rules are much stricter in the Netherlands.
- From 4 am on Friday 23rd April international visitors who have departed from or transited though India in the previous 10 days will be refused entry to into England. Only British and Irish citizens or those with residence rights in the UK will be allowed to enter and they must stay in a government approved quarantine facility for 10 days.
Tax Update
By Pat Jurgens from AIRINC
Poland
- A new occupational pension scheme called Pracownicze Plany Kapitalowe or PPK has been implemented – This employee capital plan is now fully effective for 2021. It has very interesting tax implications. PPK is voluntary for employees but mandatory for employers. Once the employee signs up, the contributions are mandatory. Employees are automatically enrolled and must ‘opt-out’ if they don’t want to participate.
- PPK’s employee contribution is 2% of wages, uncapped. This is a non-deductible contribution for individual income tax purposes. Employees can top up with an additional 2% of voluntary contributions. The Polish government also makes small contributions.
- PPK has a mandatory employer contribution of 1.5% of wages, uncapped. However, employer contributions are considered taxable income to the employee. This “Super-gross” concept of including employer contributions in taxable compensation is like another tax scheme in the Czech Republic, where employer contributions to the Czech social schemes were considered taxable income to the employee. The Czech Republic just abolished that rule for 2021. Now, Poland has a similar rule.
- We expect that most employees will enroll to get the company match. We expect that employee and employer pension costs will increase slightly for Poland this year and will also result in a slight increase in employee’s income tax costs due to the higher taxable income.
- Foreign nationals can participate in PPK, and it is possible for them to opt-out. Lower income employees can reduce their contribution %. There are special rules for withdrawal of funds from the PPK scheme.
New York
A new state budget was enacted by New York which includes increased taxes. Noteworthy are the tax increases on high-income individuals. The tax hikes are retroactively in effect from January 2021.
- Previously, the highest state tax rate was 8.82%. Two new tax brackets have been added for incomes over approximately $2.1 million. The new top marginal state tax rate is 10.9% but only on taxable income exceeding $25 million. The “Tax the Rich” budget will likely impact only a select few taxpayers with 7 figure incomes.
- New York City millionaires will now pay the highest combined state and local personal income tax rate in the country, surpassing California. The new combined tax rate in NYC is almost 14.8% (10.9% state plus 3.876% local). Compare this 14.8% NYC rate to California’s top rate of 13.3%. Impacted individuals would have an overall top tax rate over 51% when considering federal tax rates.
- Predictions? Raising taxes on high-income mobile individuals will encourage many to relocate. The new rates are scheduled to expire after 2027.
West Virginia
- West Virginia has just recently adopted an exemption for qualifying non-resident mobile workers. Qualifying workers in WV present for 30 days or less are exempt from state tax and exempt from payroll withholding. The exemption does come with strings attached – the employee must work in at least one other state during the year and cannot be a pro athlete, entertainer, etc. Reciprocity is required - the non-resident employee’s state of residence must also provide for reciprocal treatment (exclude from state tax for workers 30 days or less) or from a state that does not tax wages (Tennessee for example). The new law will be effective for 2022.
- This tax change is part of West Virginia’s AscendWV program meant to encourage people and business to relocate to WV. For more information, see: https://ascendwv.com/ To encourage ‘remote worker’ professionals to move to WV, qualifying individuals will receive a $12,000 cash allowance to purchase a home in WV. Additionally, they will receive a year’s worth of free outdoor recreation such as gear rentals and an outdoor trip worth $2,500 for recently arrived residents. The development fund for AscendWV is funded in part by a gift from WV native and Intuit Chairman Brad Smith. The program for home purchase allowances is focusing on three host cities - Morgantown, Shepherdstown, and Lewisburg.
- Relocating employees will be subject to the resident WV state income tax. The top marginal tax rate in WV is 6.5%.