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Lump Sum Allowances Efficient Approach Guide

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3 Organiza ons o en help employees cover the costs of moving to new worksites. Historically some of these reloca on-related benefits (e.g., final move and household goods shipment) were non-taxable. The company either paid for the service directly or collected receipts to reimburse the transferee. Today, these expenses are now taxable to the employee. This change, along with a desire to avoid inequi es inherent with tradi onal reimbursement programs, have led many organiza ons to shi to the use of lump sum allowances. RELOCATION EXPENSE PROGRAMS With a lump sum program, employers make a single payment to the employee at the start of the reloca on process to cover various expenses. This approach helps organiza ons control costs and reduce both the administra ve and management me needed to process/ approve mul ple expense reports for an employee's reloca on. Most lump sum allowance programs share these a ributes: Covered reloca on costs are iden fied prior to move, simplifying the budge ng process and controlling costs Employees receive funds up-front, elimina ng the need to fund expenses themselves while awai ng reimbursement Employees are empowered to use the funds to best suit their circumstances OVERVIEW OF LUMP SUM ALLOWANCES With a Lump Sum Program, EMPLOYERS MAKE A SINGLE PAYMENT to the employee.

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