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Old 13.11.2016, 13:28
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Split salary between two countries?

During a recent meeting with HR, I was informed I could split my salary between Switzerland and the USA. On the surface this seems like it might be a good idea because I still have USD expenses...but I wanted to bounce it off the EF expertise.

What I do now:
- Salary is only paid in Switzerland
- Go to the bank in CH and get USD to take along
- Withdraw cash at the ATM while in the USA
- Use the travelcash card to move money when I'm not there and won't be for several months
- With variations of these methods I estimate the expenses to be between 2-5%. In other words, for each 1000 dollars I move I'm forking out up to 50 bucks to do it.

Rules involved with the split:
- I still have to file taxes in both countries, so this is about convenience not tax-dodging.
- The salary is paid in CHF only. The split amount goes to an intermediary bank, which then deposits the money as USD with my U.S. bank.
- The Swiss part must be a fixed amount, so the USA will vary depending on deductions, exchange rate, and bank fees

Pros?:
- No need to carry large amounts of cash when I visit the USA
- No need to worry about how many ATM withdrawals I can make while there
- Might get a better exchange rate?
- Can be changed back to Swiss-only salary with a month's notice

Cons?:
- "Lose" part of the salary due to currency fluctuations. The USA part of the salary could fluctuate a lot with a Trump presidency.
- "Lose" part of the salary to bank fees (not sure how much?)
- My US bank is actually a credit union. Maybe different rules apply to banks and credit unions. Maybe 2 intermediary banks are involved?
- Because multiple banking institutions are involved, sometimes the salary doesn't arrive in the USD account on payday. HR said on occasion it has been delayed up to a few weeks.

Do any of our esteemed EFers do this with their salaries? How much might the bank fees be (HR didn't know)? I'd like to think I can make a simple calculation as to which involves the smaller "loss" of money, but it's hard to tell what exchange rates will do.

Other things to consider?

Thanks for any advice!
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Old 13.11.2016, 17:23
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Re: Split salary between two countries?

Is it correct to say that nothing changes WRT your work contract (still paid in CHF only, paid to a Swiss bank account), it's just that there will be an extension in the form of, or similar to, a standing order where a fixed amount gets automatically converted to USD and transferred to your US account?

If so, what exchange rate do you get and how much does the transfer cost? The exchange rate should be given in the form of "spot +1%" or similar. From what I can see, these two are the only aspects that could reduce your costs as everything US-sided appears to remain the same. At the same time the additional account in the US will increase your costs.

What keeps you from doing the same yourself, with the advantage of unlimited flexibility?

Perhaps you'd be better served with a multi-currency credit card? See the thread on Revolut for example.

It may also be useful to know the range of the amount this is about - it probably makes a quite a difference whether this is about $10-20k a year or $100k.
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Old 13.11.2016, 17:50
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Re: Split salary between two countries?

Thanks for the reply, Urs. We're talking about doing a split that would send about 1k to the U.S. each month.

Yes, my understanding is that the work contract doesn't change at all, it's just how they distribute the money. I don't know what the exchange rate is or what the fees could be. HR didn't know either. They couldn't even tell me what bank they use. Perhaps the Finance dept would know?

Because the U.S. account is with a credit union and I've had it for decades, there are virtually no expenses. I pay $5 per year to have a debit card. No monthly fees and they don't charge to receive international transfers.

What keeps me from doing it myself? I'm scared to f-it up and send my money where it won't ever be recovered.

I inquired about making an international transfer from my CH account to my USA account, but the folks at Migrosbank seemed to want more numbers and letters than my credit union account has. I showed them the paper from the CU with the routing and account numbers, and they said it wasn't what they need. Credit unions don't have IBANs as far as I know. Maybe the credit union is the whole problem and I need a traditional bank?

I read the Revolut thread when it first came out, but since CHF wasn't one of the currencies I let it go. Is CHF now accepted? Would putting the funds on a credit card be any more or less useful than withdrawing directly from my CH debit card?

Last edited by 3Wishes; 14.11.2016 at 14:03. Reason: Urs, not uncle. Must get new glasses
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Old 13.11.2016, 18:17
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Re: Split salary between two countries?

I use currencyfair.com to move money between Switzerland and the US when needed, and it's pretty idiot-proof. If you're only moving $1'000 at a time, it's probably worth foregoing the few dollars difference in exchange rate/fees and have the convenience of setting things up directly with your employer.

My employer only allows transfers into EUR/CHF, so I always have to go via one of my European bank accounts before moving money to the States.
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Old 13.11.2016, 18:21
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Re: Split salary between two countries?

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Credit unions don't have IBANs as far as I know. Maybe the credit union is the whole problem and I need a traditional bank?
US banks don't have IBANs either, the US is rather behind the times in that respect.

Tom
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Old 13.11.2016, 18:24
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Re: Split salary between two countries?

Just make sure that is clear which exchange rate is used and which day is used for the exchange rate.
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Old 13.11.2016, 20:18
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Re: Split salary between two countries?

Long ago I was in a similar situation. I was indifferent to it, till a colleague pointed out that the exchange rate was fixed at the annual budget rate and there was an opportunity at times to get advantageous rates. I could take up to 25% of my salary in foreign currency (% changeable every year).

Worth checking it out.
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Old 13.11.2016, 22:03
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Re: Split salary between two countries?

We had a similar set up, albeit I the opposite direction, when we first moved here. Paid out of the US in USD while working in CH, split between the two countries and currencies.

Bottom line, how comfortable are you that your payroll folks are on the ball?

In hindsight, we probably would have been slightly better off managing the currency transfers ourselves, just to have avoided those 'wait a minute, is this really right?' annoyances that occasionally cropped up.

But it was really much of a muchness.

Bottom line, I now prefer the flexibility of managing the transfer on my own, YMMV.
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Old 13.11.2016, 22:30
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Re: Split salary between two countries?

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...Bottom line, how comfortable are you that your payroll folks are on the ball?...
Honestly, not very. They don't know the bank or the exchange rate or the fees, and they said sometimes the money goes missing for a while and they can't do much about it.
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Old 13.11.2016, 23:04
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Re: Split salary between two countries?

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Thanks for the reply, UncleMax.
The nick is "Urs Max"
Urs is fine though
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Yes, my understanding is that the work contract doesn't change at all, it's just how they distribute the money. I don't know what the exchange rate is or what the fees could be. HR didn't know either. They couldn't even tell me what bank they use. Perhaps the Finance dept would know?
Without knowing the costs it's impossible to determine if this is a good offer or not. At the very least have them provide an example calculation with 1000CHF that shows how much is actually sent to your US account after all fees and deductions, and that also shows the market rate it's based upon; typically the markup on the market rate is where the bank makes its money.

As things stand you buy a pig in a poke and don't even know who (which bank) you're dealing with. What are you gonna do if the money doesn't arrive in your US account?
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I read the Revolut thread when it first came out, but since CHF wasn't one of the currencies I let it go. Is CHF now accepted? Would putting the funds on a credit card be any more or less useful than withdrawing directly from my CH debit card?
I thought Revolut had announced they would implement deposits in CHF during 2015, but apparently they didn't or I mis-remember. Since without that feature you need banks anyway it's probably not worth it.

So currencyfair or transferwise may well be worth a closer look.
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