What is a Hardship Allowance?

Not all assignment locations are the same. A hardship allowance allows you to recognize living conditions and to acknowledge the challenges your employees face in designated locations.

Various terms for the allowance are used by global mobility, such as Hardship Premium, Location Allowance, Difficult Location Premium, and Remote Location Allowance.

Explore the related resources below to dive deeper into insights from a recent webinar and our blogs, including "Do you want to consider the home country of the assignee when paying a hardship allowance?".

How is the Hardship Allowance Determined?

In some assignment locations, expatriates will face difficult living and working conditions as compared to their home country. These difficulties may come from a variety of factors – crime, inadequate medical care, climate, traffic, pollution, and cultural and other living difficulties. AIRINC assesses the relative difficulty of living in the assignment location compared to the assignee’s home country. If conditions in the assignment locations are significantly more difficult than at home, a location allowance (hardship) payment will be made. The payment is determined as percent of salary and can vary from 0 to 30% in 5% increments. The location allowance percent is applied to salary up to a maximum salary of USD 175,000 or home country equivalent.

Location Allowance percentages are reviewed once a year – the percent may increase or decrease throughout an assignment if conditions change in the assignment location.

Your Hardship Options

It is important for you to offer a hardship allowance that is aligned to your mobility program goals and is competitive for your industry. AIRINC’s hardship allowance methodology leverages a two-step process that allows you to either select our standard recommendation or to tailor the allowance to your needs.

Each location is evaluated for a total possible score of 0-100 points. These points are translated into a percentage using a hardship allowance scale. Higher points translate into a higher percent recommendation to apply to the employee’s salary.
You can choose the standard AIRINC scale starting at 0% and increasing to 30% maximum in 5% increments. Or you can choose a configured scale with different maximums or increments

Changes in Hardship

Conditions in locations can change suddenly, slowly over time, or remain relatively stable. Staying on top of changing conditions allows you to effectively support your hardship program. You are supported by dedicated hardship experts who proactively inform you when our allowances change. Our experts are also on hand to help you explain allowances, discuss competitive hardship allowance practices, and to learn more about our assessments.

How You Access Hardship Allowances

Whether you need data for one location or hundreds, AIRINC delivers the hardship allowance information you need to support your program. For each location you receive a hardship evaluation and recommended hardship percentage. This provides you with an ultimate recommendation as well as the details behind our evaluation. The hardship evaluation details our assessment of 100 total points for the following categories:

Ordering and Allowance Delivery

Ordering: You can order hardship allowances as needed or subscribe to a set of data on an annual basis.
Allowance Delivery: Detailed hardship evaluations can be accessed on-line through our portal AIRLINC. Recommended hardship percentages can also be integrated through API connections or the format required by your technology system.

How we calculate Hardship Allowances

Our dedicated hardship research team continuously researches conditions across the globe for 2,500 locations worldwide. Our sources include:

AIRINC on-site research
Interviews with expatriate personnel
AIRINC in-house research of published sources including United States State Department Foreign Commonwealth and Development Office, Bureau of Labor Statistics, iJet, The Center for Disease Control, The World Health Organization, International SOS, INTERPOL, BBC, CNN, and Reuters