This article provides the general explanations, assumptions, and inputs for the cost estimate line items under the Short Term Assignment case type. The calculation data for allowances is provided to us by AIRINC and the tax calculations are provided by Equus.
💡Note: Location data is matched based on the destination city used in the cost estimate. If no city is matched, Workia will choose the biggest city in the destination country and a dropdown of other city options will be available for you to select from manually.
Hardship Allowance
This amount is based on the destination location.
Assumptions
Incentive compensation is provided to the employee for destination locations where living conditions are particularly difficult because of harsh climate, political instability, physical risks, etc.
Pro-Rate Based on Months
Inputs: Destination City
Housing Allowance
This amount is based on the destination location as well as the type of accommodation. The default type of accommodation is based on the length of the move but can be changed at the cost estimate level or cost estimate template level.
Assumptions
The cost of rent in location for the employee and accompanying family members. This assumes the employee has a job level of executive.
The default is determined by the length of the move
Moves less than 3 months the default will be calculated as the cost of a single hotel for the length of the move.
Moves more than 3 months, the default will be calculated as the cost of a corporate apartment for the length of the move.
Pro-Rate Based on Months
Inputs: Hotel or Corporate Apartment and Destination City
Per Diem
A daily allowance based on the destination city that covers costs for laundry, personal care, and a mix of groceries and restaurant meals.
Assumptions
Includes:
At home meals
Laundry
Personal Care
Restaurants Meals
Inputs: Destination City
Rental Car Allowance
Previously named Transportation Allowance.
This is based on the destination location.
Assumptions
Includes:
Fuel
Rental Car
The daily rental car and fuel cost in the destination city for the length of the move
Pro-Rate Based on Months
Inputs: Destination City
Home Leave - Employee Reimbursement
This amount is based on the origin and destination location combination as well as the airfare class. By default, the airfare class is assumed to be business but this can be changed to economy at the cost estimate level or cost estimate template level.
Assumptions
Roundtrip business class airfare
The round-trip economy airfare costs to transport the employee to either the home location or an alternate location for the purpose of maintaining familial and business relationships and/or to obtain goods and services not available in the destination location.
Pro-Rate Based on Months
Inputs: Number of trips, Airfare class
Medical Insurance
This amount is based on the destination location and family size.
Assumptions
Rate * Family Size
The incremental cost to the employer for providing an international health insurance and dental plan. This is based on monthly costs in the origin location and varies by the accompanying family size.
Pro-Rate Based on Months
Tax Services
The costs for tax preparation and tax planning services through an outside tax provider. This is based on one annual amount in the destination location and does not vary by family size.
Assumptions
An additional 2000 USD to support additional filing requirements is added annually when the origin location is the United States.
Airfare Origin to Destination
This amount is based on the origin and destination location combination as well as the airfare class. By default, the airfare class is assumed to be business but this can be changed to economy at the cost estimate level or cost estimate template level.
Assumptions
One-way business class ticket * Family Size
The costs for one-way economy airfare from the origin location to the destination location for the employee and accompanying family members. This includes 3 extra bags per person based on the origin location.
Inputs: Airfare Class, based on Family Size
Air Shipment Origin to Destination
Assumptions
The costs for shipping the employee's goods to the destination location via air shipment. Includes up to 500 lbs of goods.
Excess Baggage Origin to Destination
Assumptions
Allows the selection of the amount of extra bags for the employee when traveling to the destination country.
Temporary Living Origin to Destination
The length of stay can be changed at the cost estimate level or cost estimate template level.
Assumptions
Host City Per Diem Data including hotel, meals, rental car, and gas for 14 days. Varies by family size.
The costs in the destination location at the start of the move result from the employee and accompanying family members not being able to move into long-term housing immediately. This includes 14 days of hotel, meals, rental car, and gas in the destination location.
Inputs: Length of Stay
Immigration Fees Employee
Immigration costs are based on the destination location and pre-move medical exam costs are based on the origin location.
Assumptions
The costs for the employee’s passport, visa, work permit, physical exams, and necessary vaccinations.
Relocation Allowance Pre-Move
The default value is based on 10% of the base salary of the employee. The percentage of base salary can be changed at either the individual cost estimate level or the cost estimate template level.
Assumptions
10% of salary
A lump sum of 10% of the employee’s base salary to cover miscellaneous relocation expenses.
Inputs: % Salary
Airfare-Return to Origin
This amount is based on origin and destination location combination as well as the airfare class. By default, the airfare class is assumed to be business but this can be changed to economy at the cost estimate level or cost estimate template level.
Assumptions
The costs for one-way economy airfare from the destination location to the origin location for the employee and accompanying family members. This includes 3 extra bags per person based on the origin location.
Inputs: Airfare Class
Excess Baggage Return to Origin
Assumptions
The cost of 3 extra bags for the employee when traveling to the origin country.
Air Shipment-Return to Origin
Assumptions
The costs for shipping the employee's goods to the destination location via air shipment. Includes up to 500 pounds of goods.
Temporary Living Return to Origin
The length of stay can be changed at the cost estimate level or cost estimate template level.
Assumptions
Host City Per Diem Data including hotel, meals, rental car, and gas for 14 days. Varies by family size.
The costs in the origin location at the end of the move result from the employee and accompanying family members not being able to move into long-term housing immediately. This includes 14 days of hotel, meals, rental car, and gas in the origin location.
Inputs: Length of Stay
Relocation Allowance Return to Origin
The default value is based on 5% of the base salary of the employee. The percentage of base salary can be changed at either the individual cost estimate level or the cost estimate template level.
Assumptions
5% of Salary
A lump sum of 5% of the employee’s base salary to cover miscellaneous relocation expenses.
Inputs: % Salary
Relocation Fee
Assumptions
The cost of relocation services provided by a supplier.
Managed Services Fee
Assumptions
The cost of managed services provided by a supplier.
Miscellaneous (Non-Taxable) Costs
Assumptions
One-off non-taxable allowance
Miscellaneous (Taxable) Costs
Assumptions
One-off taxable allowance
Pet Shipment Origin to Destination
The costs for transporting the employee’s family pets to the destination country, including travel, kenneling, or required quarantine, paid by the employer or reimbursed to the employee.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Pet shipment Return to Origin
The costs for transporting the employee’s family pet back to their origin country, including travel, kenneling, or required quarantine, paid by the employer or reimbursed to the employee.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Utility allowance
This amount is based on the destination location as well as the job level of the employee. By default, the employee is assumed to be at the executive level but this can be changed to junior, mid-level, senior, or executive at the cost estimate level or cost estimate template level.
Assumptions
Assumes executive level
The cost of utilities in location for the employee and accompanying family members. This assumes the employee has a job level of executive.
Pro-Rate Based on Months
Inputs: Job Level, destination city and, based on Family Size
Cost of Living Allowance
This amount is determined based on the combination of origin and destination locations. The origin/destination combinations AIRINC deliver is based on client requests. It should cover the most frequently requested country combinations for international moves. But we realize it's not the full world and yes, there may be gaps. If you encounter a country combination that is not calculating COLA, let us know and we can request that AIRINC research these locations and see about getting the route list expanded.
Assumptions
The additional amount of money provided to offset cost differences in goods and services for the employee and accompanying family members in destination location.
The cost of living is calculated assuming that the employee will continue their existing spending habits in addition to moderate considerations for shopping adaptations based on the destination country. Shopping adaptations are taken into consideration for the following types of spend: Transportation, Domestic Help, Communication, Recreation & Entertainment and Food at Home.
Pro-Rate Based on Months
Inputs: Location, based on Family Size
Housing and Utilities Deduction
The costs an employee is expected to spend on housing and utilities in their origin country. It is based on typical housing costs, such as rent, mortgage interest, property taxes, insurance, maintenance, and utilities (excluding telephone), according to standard spending patterns for similar income levels and family sizes. The deduction helps adjust the total housing allowance by accounting for what the employee would normally spend on housing, ensuring only the additional cost of housing in the destination location is covered. This amount is always negative because it represents a salary reduction.
Assumptions
The value can be considered a negative number, as the housing deduction is the amount an employee spends on housing at home. Some companies use a housing norm to adjust their housing allowance budgets, as the assumption here is that the employee would be spending this money on housing already so the total housing allowance would adjust to account for that. Only the difference between what the assignee would pay in addition to their normal housing would remain as their housing budget for the assignment:
Rent Allowance + Utilities Allowance – Housing Norm = Total Housing Allowance
Equity Compensation
Income from a stock option event that is taxed in both the origin and destination countries. In the U.S., this includes getting a non-qualified stock option or selling incentive stock options before they meet the required holding period.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Pension Contribution
The employee’s contribution to a voluntary employer-sponsored pension plan in the origin country. This amount is always negative because it represents a salary reduction. Mandatory pension contributions are excluded, as they are part of social security.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Other Taxable Income (Origin)
Miscellaneous taxable income, this amount will be taxed as salary only in the origin country, where salary is taxable in that location based on the individual's residency and tax positions.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Other Taxable Income (Destination)
Miscellaneous taxable income, this amount will be taxed as salary only in the destination country, where salary is taxable in that location based on the individual's residency and tax positions.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Other Taxable Income (Origin & Destination)
Miscellaneous taxable income, this amount will be taxed as salary only in both the origin and destination country, where salary is taxable in that location based on the individual's residency and tax positions.
⚠️ No data provided for this line item, users can put in the appropriate amount and the cost estimate will calculate the taxes related to this item appropriately
Mobility Premium
The default value is based on 6% of the base salary of the employee. The percentage of base salary can be changed at either the individual cost estimate level or the cost estimate template level.
Assumptions
6% of base salary
Incentive payment of 6% of the employee’s base salary provided to them before the start of the move. It is intended to motivate the employee to accept the move.
Pro-Rate Based on Months
Inputs: % salary
Education Allowance
This amount varies based on the number of children going on the move. For the purposes of cost estimates school-aged children are determined based on the inputs here.
Assumptions
The cost of language lessons and/or tuition fees for international schooling in the destination location is based on the applicable accompanying family members.
Pro-Rate Based on Months
Inputs: Based on Family Size
Home Leave - Family Reimbursement
This amount is based on the origin and destination location combination as well as the airfare class. By default, the airfare class is assumed to be business but this can be changed to economy at the cost estimate level or cost estimate template level.
Assumptions
Roundtrip business class airfare * Family Size
The round-trip economy airfare costs to transport the accompanying family members to either the home location or an alternate location for the purpose of maintaining familial and business relationships and/or to obtain goods and services not available in the destination location.
Pro-Rate Based on Months
Inputs: Number of trips, Airfare class, based on Family Size (not editable input)
Housing Lease
This amount is based on the destination location as well as the job level of the employee. By default, the employee is assumed to be at the executive level but this can be changed to junior, mid-level, senior, or executive at the cost estimate level or cost estimate template level.
Assumptions
The cost of rent in location for the employee and accompanying family members. This assumes the employee has a job level of executive.
Pro-Rate Based on Months
Inputs: Job Level, Location, based on Family Size
Spousal and Family Allowance
2,500 USD annually is provided to the employee when they have accompanying family members to help support their move to the destination country.
Assumptions
2,500 USD for Family Size > 1
Pro-Rate Based on Months
Household Good Shipments - Origin to Destination
The costs for shipping the employee's goods to the destination location. This is based on surface shipment costs from the origin location to the destination location.
Assumptions
Accompanying Family size of 1 get a 20 foot container (6,000 pounds)
Accompanying family sizes of 2 or more get a 40 foot container (12,000 pounds)
Inputs: Container Size, 20ft or 40ft.
Cultural Training
This is based on the destination location and does not vary by accompanying family size.
Assumptions
The costs for the services of a cultural consultant or an online course to familiarize the employee with the destination location’s social and business culture.
Language Training - Employee
Assumptions
The cost of 40 hours of language lessons for the employee.
Language Training - Family
Assumptions
The cost of 40 hours of language lessons for the accompanying family members.
Immigration Fees - Family
Assumptions
The costs for the accompanying family member’s passport, visa, work permit, physical exams, and necessary vaccinations.
Immigration costs are based on the destination location and pre-move medical exam costs are based on the origin location
Pre-move Trip
This amount is based on the origin and destination location combination as well as the airfare class. By default, the airfare class is assumed to be business but this can be changed to economy at the cost estimate level or cost estimate template level. This also includes as well 7 days of hotel meals car rental and gas in destination location. Includes employee and 1 accompanying family member when applicable. The length of stay can be changed at the cost estimate level or cost estimate template level.
Assumptions
Includes Round Trip economy airfare (based on Home Country to Host Country) hotel for 7 nights meals rental car and gas for 7 days (based on Host City). Maximum family size is 2.
The costs for round-trip economy airfare are based on the origin location to the destination location as well
Inputs: Location, Length of Stay, Airfare Class
Household Good Shipments - Return to Origin
The costs for shipping the employee's goods back to the Origin location. This is based on surface shipment costs from the destination location to the origin location.
Assumptions
Accompanying Family size of 1 get a 20 foot container (6,000 pounds)
Accompanying family sizes of 2 or more get a 40 foot container (12,000 pounds)
Inputs: Container Size, 20ft or 40ft.
Miscellaneous (Taxable) Costs - Start of Relocation
Assumptions:
One-off taxable start of relocation costs.
Miscellaneous (Taxable) Costs - End of Relocation
Assumptions:
One-off taxable end of relocation costs.