Payments to employees working outside of the U.S.
Effective Dec. 1, 2020, the process for paying employees working outside the United States has changed. As a result, all University of Illinois System departments that employ an individual to perform activities outside of the U.S., will need to follow the steps located here.
Potential legal and tax liability issues may arise under the laws of the foreign country in relation to employment services and must be addressed prior to hiring. The designation of foreign source income (FSI) may be applied only to foreign nationals who are nonresident aliens of the U.S. (individuals who are not U.S. citizens, permanent residents (PR), or resident aliens (RA) for tax purposes) performing employment activities outside of the U.S.
The process is being streamlined by the implementation of the electronic Payments to Employees Working Outside the U.S. form, which will be initiated by the unit then routed to the employee and necessary administrative offices for handling.
IMPORTANT: This form does NOT need to be completed for employees who are already being paid in this manner; beginning MN12, these employees will be paid as described below, without having to submit the additional documentation.
Some of the benefits of the new process include:
- Employees can upload their Form W-8BEN in the new electronic form
- Employees can designate a foreign bank account for wire transfer of payments
- Units can track the status of their electronic form transactions while being routed
- Units are no longer required to complete the Request a General Encumbrance/Wire Transfer Payment form and the Electronic Fund Transfer form each pay cycle
- Units are no longer required to provide a copy of PZILIST to verify payment amounts
- The form will be used for both initial setup and modification/terminations (e.g. changes to foreign sourced income and wire transfer information)
Although the process has been streamlined, in order to ensure timely processing of payments and accurate tax withholding, remitting, and reporting, departments need to continue adhering to the deadlines identified on University Payroll & Benefits’ Payroll Schedules.
Units who need to change information (e.g. updating foreign bank account information, employee re-located and is now working in the U.S.) must use the Payments to Employees Working Outside the U.S. form to make additional updates.
Contact the UIC HR Service Center for questions about the hiring process.
Contact UPB as directed on the Payments to Foreign Nationals page for assistance with the Payments to Employees Working Outside the U.S. form