“Global nomads” have been a fixture in talent mobility almost from the beginning: employees who left their home country years ago and have progressed from assignment to assignment and country to country. While they traverse the globe for their companies, moving from assignment to assignment and operating almost like gig workers, they are nonetheless permanent employees and managed as such. These individuals do not localize, but remain attached to their home country for the majority of their compensation and benefit coverage. Read More
Category: International Relocation
Recent Worldwide ERC® data shows that the average cost for a company to relocate a current homeowner employee within the U.S. is $79,425. International assignments are more complex, and not surprisingly, more expensive, sometimes costing employers $1m or more.
It has always been important for companies to protect this substantial investment, but the continuing talent shortage has added another imperative: your best and brightest employees—the ones you are most likely to relocate or to send on assignment—are prime targets of your competitors. They would be happy to capitalize on your investment in your employees, particularly when it comes to international assignment experience. Read More
By Melissa Seitz-Medford, Manager, TRC Consulting Services
At the recent Worldwide ERC® Americas Conference in Dallas, I couldn’t help but notice how many individuals were wearing “first time attendee” name badges. Although this was not my first time at a WERC conference, I thought it was interesting and exciting to see how many new faces there were, and I looked forward to hearing what they had to say.
Forums like WERC provide a wonderful platform for relocation industry veterans and those who may be looking at global mobility with “fresh eyes” to share thoughts, professional challenges and solutions. Given all of the work that goes into producing these conferences, and the substantial investment companies make to participate, it is worth considering how you can make the most of your time at them. Read More
The passage of the Tax Cuts and Jobs Act in late 2017 and its almost immediate effective date of 1 January 2018 took many in the mobility industry by surprise. One key change, the repeal of the employee moving expenses deduction, left many companies wondering about the tax treatment of three common relocation benefits that historically have been tax deductible for transferees:
• Household Goods Shipment (including pet and automobile shipments)
• Household Goods Storage Expenses
• Final Move Expenses Read More
TRC Global Mobility is sponsoring an upcoming Worldwide ERC Learning Zone webinar on April 10, 2018, presented by Envoy Global. Here is a sneak preview of some of the findings contained in Envoy’s Immigration Trends 2018 report. Click Here to Register for the Webinar.
According to Envoy’s Immigration Trends 2018 Report, 70 percent of employers say sourcing foreign national employees is very or extremely important to their talent acquisition strategy, yet 85 percent of employers say the current U.S. immigration system has had an impact in the hiring and retention of global talent into their organizations.
It’s clear that immigration continues to be an area of focus among employers and the U.S. government. Last year brought forward changes in policy, practice and rhetoric, and, unsurprisingly, the outlook for 2018 is similar, with even tougher restrictions being proposed.
Here are some of the potential changes that may be implemented in 2018. Read More
The passage of the Tax Cuts and Jobs Act of 2017 has had far-reaching effects within the domestic sector of the global mobility industry, however, international employee relocations have been impacted as well. All of the benefits that are affected from a domestic perspective will have the same implications on international moves if those benefits are included in an international relocation package. For example, household goods shipments and final move benefits are typically included in both international and domestic employee mobility packages. As of 1 January 2018, both of these benefits have been deemed as taxable, with no distinction between the benefits being administered domestically or internationally. It will be up to companies on an individual basis to determine if they are going to consider grossing up the taxes for both of these benefits going forward. Read More
With the passage of the Tax Cuts and Jobs Act of 2017, there are key changes to the tax treatment of several common relocation benefits. Whether you are an employee moving domestically or globally or an employer who relocates employees, it is important to be aware of these changes as we head into tax season.
A managed lump sum policy is similar to a traditional fixed lump sum except the company specifically defines the benefits covered by the lump sum in its policy guidelines. These benefits are sometimes presented as menu items, allowing the employee to choose benefits that best suit his or her needs. Other companies calculate the lump sum based on the benefits they intend to provide. Either way, the company typically provides relocation counseling (either in house or through a third-party provider) to help the employee use the funds most effectively. Unlike the traditional fixed, any unused funds revert back to the company. The company calculates the managed lump sum amount using the same methods as the traditional fixed, sometimes with the assistance of a third-party data provider.
Pros of a Managed Lump Sum Program
This model allows companies to track benefit usage and spend much more reliably than the traditional fixed. This closer control will also help the company to manage costs better with a vetted network of relocation service partners to ensure optimum pricing and quality. From a tax perspective, the employer can make direct vendor payments, allowing it to treat each of the components individually as taxable or non-taxable. Read More
A traditional fixed lump sum policy approach provides the relocating employee with a flat amount of money that he or she can use to pay relocation expenses. Under this program, the employee is usually responsible for coordinating the move details and allocating the available funds. Companies can use several criteria to determine the amount of the lump sum, including: 1) Job or grade level of the employee; 2) Homeowner versus renter status; 3) New hire versus current employee; 4) Historical averages for similar types of moves; 5) Distance of the relocation and family size; and 6) Discretion of the employee’s manager.
Companies can also engage a third-party data provider to determine the amount of the lump sum. The provider will consider current costs, distance, family size and any other parameters set by the employer in calculating a lump sum amount.
On November 2, 2017, the U.S. House of Representatives Ways and Means Committee released new tax reform legislation entitled the “Tax Cuts and Jobs Act.” Although currently in review and not yet passed into law, there are portions of the proposed tax law that would bring about a significant shock to the global mobility industry. Because of the impact that this bill as it stands would have on our industry, it is imperative to understand what the current proposals entail and what the consequences would be as we move forward into 2018.
Elimination of the Household Goods Moving Expense and Final Move Non-Meal Expense Deduction
The household goods move for the employee is currently seen as excludable or non-taxable. Under the proposed bill, all of these costs will become taxable in 2018 and corporations will need to determine if they are willing to cover the cost of the taxes (or gross-up) on behalf of their transferring employees. As the household goods move is typically one of the most expensive relocation benefits offered (second only to the sale of the home), the financial ramifications for both the employer and the employee are considerable. For example, if a household goods shipment costs $20,000.00 and the estimated gross-up to cover the taxes on the shipment would be $13,000.00, the employer would face an additional $13,000.00 in relocation fees, and the employee would see $33,000.00 of additional taxable income in their W-2—just for the household goods shipment alone. Read More