What is the difference between a COLA and a Per Diem?

Per diems and COL differentials are very different due to the following reasons. The per diem is designed to cover the average daily expenditure for assignees on short-term assignments with temporary residence in a given location. The assignee will continue to have ongoing costs at home (i.e. bills from telephone, energy services, and his/her family may be at home).

On a long-term assignment, in which a COLA is provided, it is expected that the assignee will no longer have ongoing costs at home and the family is accompanying the assignee in the host location. The COLA paid ensures that the assignee is still able to purchase the same market basket of goods and services while on assignment, as they would have if they remained at home. Therefore, it is expected that the assignee will continue to dedicate the same portion of his/her income to goods and services that he/ she would have at home in the host location. The COLA covers any difference between what goods and services cost at home versus what they cost in the host location.

Short-term assignments and commuter arrangements are increasingly being leveraged to allow more Global Mobility flexibility. Explore the related resources below to dive deeper into insights from our latest benchmark surveys on commuters and short-term assignments and revisit our informative webinar.

What is the per diem and how is it calculated?

A per diem is defined as an amount paid to the employee to cover living expenses while on a short-term assignment. As mentioned, the per diem is not a differential but rather an amount designed to cover temporary living expenses for meals and incidentals.

How Can the AIRINC Short-Term Allowance Calculator Help You?

The Short-term Allowance Calculator offers standard profiles for different types of short-term travel based on over 70 years of industry expertise. In addition, you can configure multiple profiles to provide per diems that match your organization’s policies as needed.
The Short-term Allowance Calculator allows you to leverage market-leading data for over 1,300 cities worldwide, calculating per diems that cover costs for:
Meals > Transportation > Accommodation > Personal care > Recreation

Why should you choose the Short-term Allowance Calculator?

Use the Short-term Allowance Calculator to:

Dramatically reduce the administration of your short-term assignment and travel expenses
Control the costs to the business with flexible allowance profiles
Download all of your locations at once in one simple report
Access superior data from professionally trained on-site surveying employees

The Short-term Allowance Calculator supports all types of assignments, including traditional expat assignments, host and host-plus assignments, and local hires. The tool offers standard profiles that can be used during the relocation and return phases of an assignment, including: