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Payments to Foreign Nationals

Payments to Foreign National Employees Working Outside the U.S.

In the event a University of Illinois System department employs a non-U.S. individual to perform activities outside of the U.S., specific steps are required to complete the hiring process. Potential legal and liability issues regarding taxation that may arise under the laws of the foreign country in relation to employment services must be addressed prior to hiring. The designation of a foreign source income employee (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.

FSI employees may only be set up with monthly or lump sum appointments.

Department Steps:

  1. Contact the System offices for guidance prior to the start of any work activities.
  2. Email University Payroll and Benefits (UPB) at fninquiry@uillinois.edu with the following:
    1. Completed IRS Form W-8BEN from the employee.
    2. Copy of the offer letter to the candidate as an attachment.
    3. Include the following statements in the email:
      • Intent to hire an employee to work outside of the U.S., identifying the location of activity.
      • Request a Temporary Control Number (TCN) if the individual does not have a U.S. Social Security Number (SSN).
      • Indicate if wire transfer of earnings will be required.
  3. Update the employee’s appointment in HRFE per HR guidance.
  4. Perform HR Front End Steps:

    1. For paid appointments only, contact HR to disable the I-9 link (so HRFE will forward the transactions).
    2. Route transaction for department approval via HRFE.
    3. Enter in last memo “Please change the earn code to FSI and Payroll has W8BEN” then forward to HR.
  5. If wire transfer is required, email University Payables (UPAY) at UP-ARS@uillinois.edu with the following for each pay period:

    1. Completed Electronic funds transfer
    2. PDF Request general encumbrance payment
    3. Copy of PZILIST.

Payments to Employees Receiving Foreign Source Income (FSI) who enter the U.S. for a period of time

Once a department knows the FSI employee will be entering the U.S. they must set up the appropriate work visa for entry by contacting the international services department at Chicago, Urbana or Springfield.

Department Steps:

  1. Perform HRFE Steps:

    1. Contact HR for instructions on how to fill out the Form I-9.
    2. Update the employee job record using HR Front End -- Employee Record Change transaction. Earn code changes are handled by AHR staff only, therefore, please enter a transaction memo to change earn code from “FSI” to “RGE” and Dates when employee will be in the U.S.
  2. If employee is here for part of a pay period, Department should confirm job changes have been updated for the payroll calc.
    -If the job has not been updated, use PARIS to create a Current Pay Adjustment (CPA) to correct the pay.
    -If the job has not been updated, and the CPA is not processed on time, contact UPB promptly to report the earnings error.
  3. During each pay period email UPAY at UP-ARS@uillinois.edu with the following: 

    1. Completed Electronic funds transfer
    2. PDF Request general encumbrance payment
    3. Copy of PZILIST.
  4. If the employee is a nonresident alient when he or she leaves the U.S., initiate a HR Front End – Employee Record Change transaction with memo to AHR staff to update the job earn code by changing it from “RGE” back to “FSI”.

Employees:

  1. Apply for SSN.
  2. Immediately make appointment with UPB to update immigration and tax residency status.

About These Pages

This web site is the result of a joint effort to create an understanding of processes, requirements, and policies related to payments to Foreign Nationals. It has been made possible through the collaboration of the Office of Business and Financial Services, Office of University Counsel, Office of International Services at Chicago, Office of International Faculty and Staff Affairs at Urbana, Office of International Student Affairs at Urbana, Office of International Affairs at Springfield, Office of Human Resources, the Offices of the Provost at all campuses, and representatives of units from all campuses.

Last Updated: August 17, 2017

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