Global Hiring Glossary: 41 Terms Every International Employer Should Know

Employment and engagement

Employee: A person engaged under an employment relationship and
protected by applicable employment law.

Independent contractor: A person or business that provides services with
genuine commercial independence.

Employer of Record: A commercial label for a local organisation that
formally employs a worker for a client company. The underlying legal
mechanism varies by country.

Contractor of Record: A provider model that supports genuine independent
contractor engagements through contracts, invoicing, documentation,
settlement, and compliance controls. It does not replace correct worker
classification.

Direct employment: Employment in which the operating company or its
local entity is the legal employer.

Misclassification: Treating a worker as a contractor or another status
when the facts support employment.

Probation: An initial employment period that may have special rules and
limits.

Notice period: The period between notice of termination or resignation
and the end date.

Severance: A payment or benefit due on termination in specified
circumstances.

Payroll and compensation

Gross pay: Compensation before deductions.

Net pay: The amount received after deductions.

Employer cost: Salary plus employer contributions, benefits, fees, and
other employment expenses.

Payroll cutoff: The deadline for submitting changes for a payroll
cycle.

Withholding: Amounts deducted and remitted by the payer under local
rules.

Social contribution: A statutory payment connected to social insurance
or similar systems.

Payslip: A statement showing earnings, deductions, and net pay.

Payroll reconciliation: Comparison of payroll calculations, payments,
liabilities, and accounting records.

Tax and corporate presence

Tax residence: A status used to determine where a person or entity is
taxed.

Permanent establishment: A taxable business presence that may arise
under domestic law and an applicable tax treaty from activities in a
country.

Corporate income tax: Tax on company profit under applicable rules.

Value added tax: A consumption tax that may apply to goods or services.

Double tax treaty: An agreement between countries that allocates taxing
rights and may reduce double taxation.

Tax identification number: A number used by tax authorities to identify
a person or entity.

Immigration and mobility

Right to work: Legal permission to perform work in a country.

Work permit: Authorisation connected to employment or work activity.

Residence permit: Permission to live in a country, which may or may not
include work rights.

Business visitor: A visitor allowed to perform limited business
activities without local employment.

Posted worker: An employee temporarily sent by an employer to work in
another country.

Remote work abroad: Work performed from a country different from the
employer's usual employment location.

Contracts, data, and operations

Intellectual property assignment: A clause or agreement transferring
specified rights in created work.

Confidentiality: A duty to protect defined non-public information.

Data controller: An entity that determines why and how personal data is
processed.

Data processor: An entity that processes personal data for a
controller.

Data localisation: A requirement to store or process certain data in a
specified country.

Background check: Verification of information relevant to a role,
subject to local law.

Offboarding: The process for ending a work relationship, including pay,
documents, equipment, and access.

Local entity: A company or branch registered in a country.

Subsidiary: A company controlled by another company.

Branch: A registered extension of a foreign company rather than a
separate subsidiary.

Service-level agreement: Defined service standards, response times, and
responsibilities.

Audit trail: Records showing what changed, who approved it, and when.

Gross-to-net calculation: The process of calculating deductions from
gross pay to reach net pay.

Net-to-gross calculation: The process of calculating the gross amount
needed to produce a target net payment.