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Lump Sum Allowances Efficient Approach Guide

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To control costs while keeping their organizations competitive, most companies offer some type of lump sum allowance. This enables them to deliver at least a portion of their relocation program benefits. The passage of the Tax Cuts and Jobs Act in 2017 removed the tax benefit to collec ng receipts for several components of the reloca on process. Given these changes, the use of lump sums has never been more appealing. Organiza ons have their choice of several lump sum programs. Each type offers specific advantages. For many organiza ons, a "fixed amount" is the first approach implemented. O en designed and managed by an internal staff, this approach can work ini ally. However, increased accountability, varied geographic costs and the growing complexity of reloca on processes increasingly limit the sustainability of providing fixed amounts. As a result, an increasing number of organiza ons are switching to a "transferee- specific" lump sum allowance. With the various approaches and data quality involved in establishing and maintaining lump sum allowances, it helps to know your op ons before choosing the program that will best support your company's needs.

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