Motus Guides

Two Location Comparison: Explanation for Transferees

Issue link:

Contents of this Issue


Page 0 of 3

TWO LOCATION COMPARISON Explanation for Transferees Purpose of a Cost-of-Living Allowance Relocation cost-of-living allowances, also called COLAs, provide financial assistance to an employee to help them acclimate to a new location where total living costs are higher than the origin location. This isn't a permanent, recurring payment. COLAs are only meant to offer a level of assistance until the family can acclimate financially to the destination location. The Standards Approach Clients use Motus to determine differences in the cost of living between the origin and destination locations. To determine these differences, Motus uses a "standards approach." The standards approach means that Motus measures cost differences. For example, we measure costs for the same size home in each location. By measuring these differences between locations, we can determine the change in the cost of living. Motus recognizes that family size and income must also be considered. For example, a typical household with a family size of one and an income of $100,000 spends differently than a typical household with a family size of four and an income of $50,000. Motus refers to an employee's family size and income as their "profile." Using family size and income profile, Motus determines the spending patterns used in the Two Location Comparison (TLC). QUESTION Why not use an employee's actual expenses and home size? ANSWER The Motus approach is based on a standard set of parameters and not employee specific lifestyle choices. Using these standards provides results that are consistent and fair to all employees who share the same profile.

Articles in this issue

Archives of this issue

view archives of Motus Guides - Two Location Comparison: Explanation for Transferees