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What is the purpose of balance sheet approach?

Its purpose is to protect expatriates' standard of living as well as control company costs. Employees receive an allowance whenever the costs in the foreign country exceed the costs in the United States.

Who takes responsibility for paying the income tax on behalf of the expatriates?

D) The employer takes the responsibility for paying the income tax on behalf of the expatriates.

What is Airinc's goal?

AIRINC is unique in that we measure cost differences arising from both price differences as well as the shopping adaptations assignees make . Our in-house researchers canvass thousands of prices on a continuous basis to capture the pure price differences in a large market basket of goods and services.

What is COLA in accounting?

The Cost of Living Allowance (COLA) — also known as Goods and Services Differential, Commodities and Services Allowance, or Cost of Living Index – is a critical element of international assignee pay. It is the allowance you provide and update over time to protect assignees against excess goods and services costs in a host location. AIRINC’s approach to COLA is holistic, we believe high quality data and support go hand in hand. We provide COLA based on robust methods, calculated by our in-house research team. You also receive access to dedicated experts who proactively and promptly support your COLA needs.

How many countries are eligible for Cola?

We make it easy for you to select your desired subsidy level and ensure the allowance is aligned to your guidelines. Available for over 150 home countries and over 1000 host cities, the COLA can be configured to a set of pre-selected criteria.

What does it mean when the market basket of goods and services for the host city has an index less than 100?

If the market basket of goods and services for the host city has an index less than 100 that means the host city has a lower cost of living than the home location. If an assignee’s annual net spendable salary is $75,000, the assignee would need 120 percent of that amount—an extra $15,000 per year—to maintain the same standard of living in London.

How much does an assignee need to pay to maintain the same standard of living in London?

If an assignee’s annual net spendable salary is $75,000, the assignee would need 120 percent of that amount—an extra $15,000 per year—to maintain the same standard of living in London. Most employers spread the Cost of Living Allowance across the year’s pay periods.

What is spendable income?

Spendable income is the amount of money or portion of the home salary the employee uses to maintain his standard of living. To determine what is spendable, one must consider the benefits the employer is providing or the fixed costs they are covering while the employee is on assignment.