With the cash, lump sum approach to mobility, the employing organization offers the relocating employee a single, pre-determined amount of money at the start of the relocation process to fully or help cover the costs. With this model, employees are provided with the funds up-front. While it is considered a taxable employee benefit, employees are often not required to submit itemized receipts, and many employers will opt to gross up the amount to cover their full tax liability.
A lump sum is often used for domestic relocation where the employee is familiar with the country infrastructure and institutions. Some organizations include a lump sum option in their policy suite for elements of cross-border moves, too, such as funds to cover temporary living. When used for international moves, the company will almost always cover the cost of any compliance-related services as well, such as tax and immigration.
Companies may opt to provide cash lump sum programs as the only source of relocation financial support for recent graduates, entry-level transferees, or new hires. Others may use it in conjunction with additional policy types to round out their suite of relocation support.
Employers may further assist the employee with budgeting tools and a list of suggested, vetted vendors that are experienced with employee relocation to help them make the best use of their funds. Tools such as our lump sum management technology can give employees the best of both worlds: control over their move and how they use their lump sum, with the ease and convenience of booking online surveys, comparing quotes and getting some guidance and visibility into the total budget to help them make the best choices for their needs. Employers have an easy, convenient way to authorize the move, disburse funds and stay in touch with all stakeholders. The insights into the program and how employees are using it can help you identify where things are working well, and where there may be gaps requiring some adjustments.
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