Employee Benefits Across Borders: Health, Pensions and Pay Access

A software architect from Hyderabad has spent six years in Texas on a work visa. Every month, a slice of her salary has gone to US Social Security. If her employer moves her back to Bengaluru next spring, she may leave with nothing to show for it, because she will not have reached the ten years of coverage the US system requires. Her colleague, posted from the same Indian company to Frankfurt for four years, faces no such loss. Germany and India have a social security agreement. The US and India do not.

That gap captures the core problem with employee benefits across borders. Salaries move easily between countries. Benefits mostly do not. Health insurance, pensions, gratuity and even the timing of pay are built on national systems, and every international hire or posting creates a seam where value can leak out. This piece looks at four of those seams, with the numbers attached.

Health cover: double-digit inflation, three years running

The single biggest benefit cost for most international employers is medical cover, and it is rising fast. Insurers surveyed for the Mercer Marsh Benefits Health Trends report project a global medical trend rate of 10.1% for 2026, the third straight year in double digits, according to a summary by HR Reporter. The survey covered more than 268 insurers in 67 markets. Eight in ten cited general inflation as a driver and seven in ten rising use of services.

Cost is only half the story. The same insurers said existing plans fall short in two areas that matter most to an internationally mobile workforce: 68% said plans do not adequately cover prevention and treatment of chronic conditions such as diabetes and heart disease, and 54% said mental health coverage was inadequate. For a worker relocated away from family, mental health support is not an add-on. It is often the benefit that determines whether the posting succeeds.

The practical consequence for employers is a choice between local plans in each country, which are cheaper but uneven, and international private medical insurance, which gives consistent cover but costs more and inflates faster. Many mid-sized firms end up with a mix: local plans for locally hired staff and international cover for those on assignment.

Pensions: where totalisation agreements decide everything

Pension contributions are where cross-border careers lose the most money, and the reason is structural. Most state pension systems require a minimum number of years before any benefit is paid. A worker who contributes for fewer years than that, then leaves, often forfeits the lot. Social security agreements fix this in three ways: detachment, which exempts a posted worker from the host country's system for a set period; totalisation, which counts years in both countries toward eligibility; and portability, which pays the benefit wherever the retiree lives.

India has signed 20 such agreements, of which 19 are in force, according to the EPFO brochure on international workers. They cover most of Western Europe, Canada, Quebec, Australia, Japan and South Korea. Detachment periods are mostly five years, with Germany at four and Sweden at two. The Brazil agreement has been signed but was not in force when the brochure was issued. To claim the exemption, a posted worker needs a certificate of coverage from EPFO; without one, the worker can end up paying into both systems at once.

The missing agreement

The largest hole is the United States. Indian workers pay roughly $3 billion a year into US Social Security, and about $27.6 billion over the past decade, according to figures reported by Business Standard via Vision IAS in November 2025. Many on temporary visas never reach the 40 quarters, or ten years, needed to qualify. A Policy Circle analysis notes that Indian nationals received 72.3% of H-1B visas issued in fiscal 2023, so the issue falls overwhelmingly on one community.

India has proposed a deal modelled on the Double Contributions Convention it signed with the UK on 24 July 2025 alongside their trade agreement, which exempts Indian workers and their employers from UK contributions for up to three years on temporary assignments. Our view is that a US agreement would be worth more to Indian professionals than most tariff concessions under discussion, and that it deserves more public attention than it gets.

Gratuity reinvented: the UAE savings scheme

In the Gulf, the main retirement benefit for expatriate workers is end-of-service gratuity, a lump sum paid when a job ends. The weakness is that the money sits on the employer's books for years, earns nothing for the worker, and is exposed if the employer fails. The UAE's answer, under Cabinet Resolution No. 96 of 2023, is a voluntary alternative in which employers pay monthly contributions into licensed investment funds instead, as set out in an EY tax alert.

Worked example: AED 10,000 basic salary

The employer contribution is 5.83% of basic monthly salary for the first five years of service and 8.33% after that. On a basic salary of AED 10,000, that is AED 583 a month, or AED 6,996 a year, for years one to five. From year six, it rises to AED 833 a month, or AED 9,996 a year. Over the first five years, that adds up to AED 34,980 in employer contributions, invested from the month they are paid rather than handed over in one lump at the end. Employees can top up with voluntary contributions of up to 25% of total salary, and default funds go into a capital-guaranteed option if no choice is made.

For a worker sending most of their income home to family in Kerala or Dhaka, the difference between a gratuity paid after ten years and a funded account built monthly is significant, both in returns and in protection against an employer's insolvency. Workers should check the fund terms and any tax implications in their home country with a qualified adviser. Our coverage of Gulf wage protection and payroll cards looks at the payroll rails that sit underneath these schemes.

Salaries cross borders in seconds. Pension rights can take a treaty and a decade.

Earned wage access: cash flow as a benefit

A newer category of benefit is about when pay arrives rather than how much. Earned wage access lets workers draw part of their already-earned pay before payday. The most detailed public data comes from the US Consumer Financial Protection Bureau, which found that in 2022 employer-partnered providers handled an estimated $22.8 billion across 214 million transactions for 7.2 million workers, as reported in its data spotlight on the paycheck advance market.

The average advance was about $106, taken roughly ten days before payday, and the average fee on a fee-bearing transaction was $3.18. That sounds small. Annualised, the CFPB calculated, a $3.18 fee on a $106 advance repaid in ten days is equivalent to an APR of about 109.5%. Users averaged 27 advances a year and about $69 in annual fees. Charge-off rates for employer-partnered products were just 0.3%, because repayment comes straight out of payroll.

The regulatory view has swung back and forth. In late December 2025, the CFPB issued an advisory opinion stating that covered earned wage access is not credit under federal lending rules, provided advances are limited to wages already earned, recovered through payroll deduction, and come with no recourse against the worker, according to Davis Wright Tremaine. That withdrew a 2024 proposal that would have treated most such products as loans. Our view: employer-paid access with no per-transaction fee is a genuine benefit. Fee-per-use access paid by the worker is a financial product, and employers offering it should say so plainly.

Remittance as a benefit nobody counts

For millions of migrant workers, the most important financial event of the month is not payday. It is the transfer home that follows it. The World Bank's global average cost of sending $200 was 6.36% in the third quarter of 2025, as covered in our analysis of the cost of sending money home.

Run the numbers for a worker sending $400 a month at that average cost. That is about $25 a month, or roughly $305 a year, in fees and FX margin. An employer that pays salaries directly into a low-cost transfer channel, or splits payroll so part lands in a home-country account, effectively hands that worker a few hundred dollars a year at little cost to itself. Very few benefits budgets count this, yet for a worker on a modest wage it can be worth more than a gym membership or a meal allowance. For the regulatory side of sending money to India, see our explainer on tax on money sent to India.

What to watch next

• Late 2026: the next Health Trends survey, which will show whether the medical trend rate stays in double digits for a fourth year from 10.1%.
• Through 2026-27: India-US trade negotiations, where a totalisation agreement on the UK model is on India's list. Any deal would affect roughly $3 billion a year in contributions.
• January 2027: new US state legislative sessions, where several states are expected to debate earned wage access rules after the CFPB's December 2025 opinion.
• 2026-27: entry into force of the India-UK trade agreement, which brings the Double Contributions Convention and its three-year exemption into operation.

For workers planning a return, our moving-back-to-India money checklist covers what to do with foreign pension and provident fund balances.

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