Canadian Employee Relocation Council. Survey of Corporate Per Diem Rates and Miscellaneous Allowances

Transcription

1 Canadian Employee Relocation Council Survey of Corporate Per Diem Rates and Miscellaneous Allowances March 24, 2016

2 Summary The on line survey was conducted from February 29 to March 17, The survey is intended to provide information about the use of per diems and miscellaneous allowances paid to employees who are on assignment or relocating to a new location. A total of 37 organizations participated in the survey. Of those organizations, just over two thirds (69%) currently offer a per diem in lieu of actual expense reimbursement for meals and other miscellaneous expenses. Just over half of those organizations extend the per diem to the spouse and family. The amount of the allowance varies for domestic, cross border and international assignments. By contrast, 88 per cent of the participating organizations pay a moving allowance or assignment allowance to cover miscellaneous moving expenses. Almost all, at 95 per cent, pay an allowance for a permanent relocation, and 55 per cent offer the allowance to new hires. Industry profile Manufacturing 4% Finance (banking, insurance) 17% Transportation 7% Natural resources, (oil and gas, forestry, utilities, mining) 20% Retail /wholesale 3% Technology 13% Government (Fed/Prov/health/education/military/police etc.) 13% Service (consulting/legal/accounting etc.) 10% Construction / Engineering 10% Other 3% CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 2

3 About the Canadian Employee Relocation Council The Canadian Employee Relocation Council (CERC) is a not-for-profit organization dedicated to removing barriers that restrict mobility and deployment of human capital, which are vitally important to Canada s future prosperity. Established in 1982, the Council represents the interests of its members on workforce mobility matters. Many of the Council s members are listed in Canada s Financial Post Top 500. Copyright This document or any part there of, may not be reproduced, stored in a retrieval system or transmitted in any form or by any means without the express prior written consent of the Canadian Employee Relocation Council Canadian Employee Relocation Council (CERC). All rights reserved. Canadian Employee Relocation Council 44 Victoria Street, Suite 1711 Toronto, ON M5C 1Y CERC (2372) Leadership for Workforce Mobility CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 3

4 Participating organizations ABB Inc. Air Canada Aritzia ATCO Power Bombardier Inc. Canada Post Corp. Canadian National Railway Canada Mortgage and Housing Corporation (CMHC) Desjardins Devon Energy Electronic Arts Enbridge Inc. Fluor Canada Ltd. FMC Tech Global Affairs Canada Goldcorp Hatch Husky Energy IBI Group IBM International Development Research Centre (IDRC) Ontario Power Generation PCL Constructors Inc. PepsiCo, Inc RBC Shawcor SNC-Lavalin Inc. Stantec Strongfield Technologies (Quebec) Inc. Sun Life Financial Suncor Energy Inc. TD Bank Group Teck Resources Limited TransCanada Treasury Board of Canada Secretariat UAP Inc. University of British Columbia CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 4

5 Part one: Per Diem Payments 1. Organizations that provide per diem in lieu of actual expense reimbursement Of the 38 organizations participating in this survey, 69% provide a per diem in lieu of actual expense reimbursements for meals and other miscellaneous costs. 2. Per diems are provided in the following situations Participants were asked to indicate the situations when a per diem is provided to the employee. Permanent Relocation 42% Long Term Assignment (12 months and over ) 52% Temporary Assignment (3-12 months) 84% Business Travel 61% Employee in location prior to arrival of family (1-90 days) 42% 3. Payment of the per diem based on travel or assignment type A total of 30 organizations participating in the survey reported making the per diem payments as follows. Expense Claim Payroll House Hunting In Transit Business Travel Temporary Assignment 67% 67% 57% 53% 10% 13% 17% 33% Some participants noted that for business travel, actual expenses are claimed through the expense claim processes. Some companies report efforts are taken to provide payment in a tax exempt manner through an expense reimbursement process. CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 5

6 4. Eligibility for the per diem Participants were asked to indicate the entitlement of family members for payment of the per diem. The distinction between dependant children as an adult/child, was intended to identify if variations in coverage exist for children between policies. Eligible Not eligible Employee 100% 0% Spouse/Partner 57% 40% Dependant child as adult 33% 36% Dependant child as child 60% 37% Further comments indicated that dependants are equal to employee and spouse and all accompanying dependants are eligible for the payment. In some cases dependant under the age of 12 are considered to be children and children over the age of 23 are not considered to be dependants. 5. Location In 77 per cent of organizations the amount paid differs based on the location. In some organizations that amount varies by country, with payments determined based on survey data gathered by an international service provider. In others the amount does not vary between locations within the same country. CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 6

7 6. Rates differ by the type of relocation/assignment For domestic relocations/assignments the following amounts are paid. A total of 28 organizations responded to this question. (CAD$/ day) Daily Amount/ Person $20 - $39 $40 - $59 $60 - $79 $80+ Employee 14% 39% 25% 21% Spouse/Partner 18% 18% 4% 13% Dependant child as adult 7% 14% 4% 7% Dependant child as child 36% 4% 0% 7% The employee rates may also vary if the employee is accompanied by a spouse and or children. The payment of these additional amounts may be capped depending on the duration, e.g. 90 days for the employee and one month for the spouse / dependants. For cross border relocations/assignments the following amounts are paid. A total of 23 organizations responded to this question. (CAD$/ day) Daily Amount/ Person $20 - $39 $40 - $59 $60 - $79 $80+ Employee 13% 39% 26% 22% Spouse/Partner 17% 13% 13% 9% Dependant child as adult 4% 9% 13% 9% Dependant child as child 26% 9% 4% 9% CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 7

8 For international relocations/assignments the following amounts are paid. A total of 20 organizations responded to this question. (CAD$/ day) Daily Amount/ Person $20 - $39 $40 - $59 $60 - $79 $80+ Employee 15% 30% 35% 20% Spouse/Partner 20% 15% 15% 10% Dependent child as adult 10% 10% 15% 5% Dependent child as child 25% 10% 5% 10% 7. How the per diem rate is determined In determining the rate of the per diem, practices differ among participants Fixed amount to all employee levels 48% Salary based (i.e. % of salary) 0% Level of employee - management / non-management 3% Location Data Third Party Relocation Provider 23% Location Data Self Run from Data Provider 9% Other 7% CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 8

9 Part two: Allowances for Miscellaneous Moving Expenses 1. The majority of organizations participating in the survey, at 88 per cent, provide a moving allowance or assignment allowance to cover miscellaneous moving expenses. The amount of reimbursement varies widely between organizations, including a non-accountable movement grant of $650 and a transfer allowance based on salary. Some organizations place a cap on the amount based on a percentage of salary, ranging from $6,000 to $20,000 (net of tax) and there are variances depending on the length of assignment and the position of the employee within the company. 2. A moving allowance is provided in the following circumstances Duration of Assignment Short Term Assignment (3-12 months) 18% Long Term Assignment (over 12 months) 76% Permanent Relocation 94% New Hire 55% The amount of the allowance provided varies with the nature of the assignment. For example, in some organizations a per diem and lodging are covered and no movement allowance is paid for temporary assignments, while a lump sum is provided for long term assignments. Type of Assignment Temporary Assignment 70% Long Term Assignment 65% Permanent Relocation 85% CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 9

10 3. The amount of the allowance is calculated as follows Allowance Fixed amount to all employee levels 21% Salary based (i.e. % of salary) 37% Level of employee - management / nonmanagement 13% Other 29% Within Other some organizations report that there is no set policy in place; that the amounts differ between employees and new hires and; that methodology will vary depending on the type of assignment and location. In 84 per cent of respondent organizations that offer an allowance, the amount is paid to the employee in the form of a lump sum and no receipts are required. The allowance is grossed up for tax purposes by 65% of the organizations. For those organizations that place a limit on the amount of the allowance (60%) the average amount of the allowance is $10,021. Some organizations noted that the limit can vary depending on domestic versus an international assignment. *This finding appears to be consistent with the number of organizations that report the allowance amount is determined by a percentage of the employee s salary. 4. Additional Allowances In 13 per cent of the organizations surveyed an additional allowance is provided for items such as electrical appliances for locations with different electrical currents. The majority of organizations report that expenses of this nature are included in the allowance. In some organizations premiums are offered for hardship locations, furniture allowances and exceptions are provided for executives. CERC 2016 Per Diem and Miscellaneous Allowance Survey Page 10