How Much Will That Assignment Really Cost? A Look at Global Mobility by Route

When sending an employee on an international assignment or a one-way transfer, how do different Home/Host country combinations compare from a cost perspective? Do the results change when comparing a three-year equalized assignment to a one-way transfer?

To make this easier to understand, we created an infographic, What’s Driving the Cost of Mobility?, using AIRINC data and our Assignment Cost Estimator (ACE). It breaks down each assignment route into salary, allowances, and tax costs, and highlights the Cost Multiple — a simple way to see how much more an assignment costs compared to the employee’s base salary.

In this blog, we dive into the details behind the numbers, explore what drives costs across different locations, and share insights to help you make better assignment decisions.

How We Analyzed Assignment Costs

For this project, AIRINC analyzed the top requested Assignment Cost Estimator (ACE) routes from our clients, breaking them into three key components:

• Salary: The sum of base salary and employer contributions to Home social security — the baseline compensation cost before the assignment or transfer.
• Allowances: Expenses incurred before and during the assignment; for long-term assignments, this includes repatriation costs.
• Tax Costs: Both employee income tax and social security contributions.

Each route also has a number representing the Cost Multiple. We calculate the multiple by dividing the overall cost by salary and employer Home social security contributions, indicating how much more expensive the overall global mobility cost compared to the employee's baseline compensation.

For example, an employee compensation of USD 100,000 with a total assignment cost of USD 450,000 would have Cost Multiple of 4.5. AIRINC consistently sees assignments within a Cost Multiple of 3 to 5, but it can vary depending on package, compensation, and Home/Host combination.

Why Cost Analysis Matters

We analyzed these global mobility cost estimates to help businesses interpret data and make informed decisions with confidence. When considering international assignments for their employees, the costs of relocation and support often are a deciding factor for companies. Whether looking at a home-based temporary assignment or a one-way transfer, understanding what factors are driving costs in certain scenarios will allow Global Mobility to make a true strategic impact.

Methodology and Data

To gain a deeper insight into the drivers of allowance and tax costs, we ran ACE calculations for both long-term assignments and one-way transfers across 20 different country combinations. Each scenario produced tax and allowance costs broken down into three components. For purposes of our analysis, all costs are displayed in U.S. dollars (USD) for easy comparison, and a “Cost Multiple” is calculated by dividing overall cost by base salary. This produced a number that conveyed the affordability of the relocation relative to the employee’s salary.

On average:

• Allowances made up about 50% of total cost.
• Salary and tax costs each made up about 25%.

Within the allowance category, the main cost drivers were housing, immigration fees, school fees, shipment, and travel. These do vary significantly based on local market conditions.  

Tax costs, however, were the most variable – for example, a relocation to a country with no taxes or a lower flat rate resulted in lower overall cost than a country with high taxes. Several different scenarios stood out in our analysis, which we explored in more detail.

Route Spotlight: New York City (NYC) to London

Whether as a home-based assignment or a one-way transfer, our analysis ranked NYC to London as one of the most expensive country combinations. Tax costs in the United Kingdom are significant with a top marginal tax rate of 45%. While every cost factor inbound to London was higher than average, what really drove up the overall cost were the taxes. The one-way transfer to London estimated tax costs to the employer of USD 223,000 for the first year for an employee with a middle-income salary of USD 80,000, nearly 30% more than the average for tax costs. In looking at the long-term assignment scenarios, all three examples we pulled for assignments to London ranked high due to their tax costs. This is partly attributable to the high level of taxable relocation costs and allowances inbound to London.

Breaking down overall tax costs into income tax and social security, we found that both components were exceptionally high compared to those in other countries. Where social security contributions are paid in the UK, social security costs were nearly 5 times the average due in part to employer contributions to National Insurance at 15%.

Surprisingly, housing was not a significant contributor to the high cost compared to other transfers, sitting just below average at USD 82,000 for a year (including temporary and permanent housing). The two most significant cost-of-living expenses were immigration and school fees. UK’s immigration fees were around USD 30,000, including the Health Immigration Surcharge. London school fees were USD 90,000 per year, ranking London’s school fees the most expensive.

Route Spotlight: London to Dubai

This country combination stood out not for its total cost (which ranked in the lowest quartile for both long-term assignment and one-way transfer), but because Dubai has no income tax or social security contributions for non-nationals. With these tax savings came higher allowance costs, with housing costs catching our eye.

Despite being one of the least expensive transfers overall, housing alone cost USD 95,000 per year, above the average of USD 84,000. All other allowance costs were around the average. However, a transfer to Dubai generally includes a hardship allowance and language training, setting it apart from the roughly half of transfers that did not incur any. So, while Dubai is certainly attractive for its lack of taxes, these additional allowance components may drive total costs higher than expected.

Route Spotlight: New York City (NYC) to Singapore

Like Dubai, Singapore has low tax costs that are offset by a high cost of living. In the one-way transfer scenario, tax costs were just half the average tax cost for all transfers. However, for this scenario, we chose to analyze a long-term assignment, with a home-based equalized approach such that the focus was not just on Singapore taxes. Still, even as a temporary assignment, tax costs were below average by over USD 112,000 for the three-year period. Additionally, taxes were only about a third as expensive as those of a long-term home-based equalized assignment from NYC to London.

These lower taxes were balanced by higher housing and living costs. Housing and utilities over the three years were estimated at USD 419,000, well above the USD 282,000 average. The goods and services differential totaled over USD 86,000, about double the average. In general,  other components measured slightly above average costs, placing this assignment as the fifth most expensive scenario overall. However, the assignment multiple calculated was just 3.87, because of the employee’s higher USD base salary, making it a relatively affordable assignment compared to what the company would already be paying.

Key Takeaways

In general, our analysis showed that there is much more variability in tax expenses than allowances, and the countries with low to no taxes consistently ranked in the lower half for total assignment costs. Allowances, by contrast, were much more consistent across locations, so a lower allowance cost alone did not necessarily place a relocation among the least expensive. Therefore, taxes seem to be the most significant factor in predicting overall cost, and exploring transfers to lower-tax countries might pay off.  

Understanding the factors that influence tax costs such as gross ups and tax equalization will also be important to communicate to the business. However, there are still a few other components to consider: countries with higher immigration fees, those requiring language training, or those that involve school and hardship allowances as these components can still push costs higher.

Additionally, closer relocations or those with a shared language may reduce expenses related to travel, shipment, or schooling. Overall, understanding and exploring the complete cost breakdown allows us to make smarter, more strategic assignment decisions. 

See the Data at a Glance

If you want to see all the numbers in one place, see our infographic: What’s Driving the Cost of Mobility?. It breaks down each assignment route into salary, allowances, and tax costs, and shows the Cost Multiple for a quick comparison.

Curious about specific locations or routes not included in the infographic? AIRINC can work with you to run data for your scenarios and provide tailored insights for your business. Understanding the full cost picture helps you make better, data-driven assignment decisions — and positions you to advise stakeholders with confidence.

Blog Authored by Pat and Margaret

You need reliable data, clear frameworks for explaining costs, and the ability to compare policies and scenarios in ways that resonate with stakeholders. See how AIRINC's Navi empowers you to influence with data.