What is a Personal Salary Impact Statement?
This is information that an employer can offer an employee when relocating them from one location to another. This statement provides a sense of how the employee’s purchase power will be affected by the move.
Why is a Personal Salary Impact Statement important when relocating?
Personal Salary Impact Statements provide a transferee – international or domestic – with a clear explanation of how differences in income taxes and costs will financially affect the employee at his or her income and family size. By reviewing such a statement before initiating a move, both the employer and the employee will benefit from a better understanding of the true value of their new location’s compensation. With expectations aligned, the business can plan for higher success rates with international or domestic moves.
Register for our upcoming webinar to learn more about international and domestic assignments:
What types of issues can a Personal Salary Impact Statement help avoid?
An employee might gross more if moved from a low to a high wage location. In some cases, this can boost the employee’s standard of living, but if the destination location is high-cost and has high income taxes, the employee may be worse off financially. Conversely, an employee might move from a high-wage to low-wage country and experience an increased standard of living if the destination is low cost. If an employee understands the financial impact of a transfer before they accept the offer, it may help alleviate problems later.
You can review a sample impact statement below:
Our 2019 Mobility Outlook Survey confirms that 58% of firms are seeking ways to improve employee communications regarding the potential financial impacts of assignments/transfers
How do you create a Personal Salary Impact Statement?
Increasingly, employees expect to be able to access the information they need quickly and easily. AIRINC offers on-line tools that allow users to analyze the financial impact of a particular move with a few clicks. AIRINC can help configure the standard report into a Personal Impact Statement which “speaks” directly to the employee with personalized information on the potential impact of a transfer.
If you are interested in enhancing the transfer process for your employees via Personal Salary Impact Statements, please contact us today. If you'd like to read more about how one of our most popular products - the Salary Evaluation Tool - can provide clarity with the economic impact of a permanent relocation on an employee, click below:
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