When I dip, you dip, we dip...but don't double dip!

The title of this post taps the hit 1996 hip-hop song "Da Dip" (one of my favs), which is fun and makes you want to move. I can't guarantee that simply by playing the song a reticent expatriate candidate will accept their assignment, but if they do accept their assignment, let's consider the downside of "double dipping."

What are you talking about? "Double dipping?"

In the song, dipping is just a dance move, but double dipping, or what AIRINC calls "double counting" in the post below, is when your program pays out for the same benefit twice. Expatriate policies often offer certain allowances that are calculated and paid out but also certain other benefits that are either paid directly to a vendor or reimbursed to the expat. 

In the post, AIRINC cites examples like "domestic help," "air conditioning," or a "part- or full-time driver," which if you are reimbursing to the expatriate or paying to a specific vendor may already be included in one of the allowances that are being paid. In that case, it is being paid twice and that is what I am calling "double dipping." The domestic help reimbursement may already be included in your market basket and calculated into the cost of living allowance (COLA). That air conditioning reimbursement may be in the housing or utilities allowance. That driver service may already be in the transportation allowance. Besides paying twice for a specific benefit, most of these taxable benefits also get "tax equalized," so you are spending more on tax assistance then, too.

How would I know if our expatriate program is being impacted by "double dipping?"

Meet with your data provider and RMC to review the list of things that are calculated in your expatriate allowances, then run a report through your RMC to audit and pick up any of those items that may be being paid as standalones. Pay particular attention to the COLA, as there are usually a number of items in the "market basket" to consider. Next, if you find issues, talk with each expatriate about the situation and rectify it. Lastly, educate everyone who is involved in managing (auditing and paying out) the expatriate expenses and who are advising expatriates on benefits at the beginning of the assignment. 

Looking for more on expatriate assignments? Try one of these:

• Calculating COLA: How does it work? 
• Eliminate the double tax "shock and awe" moment for your expats 
• Increasing expat assignment success by finding the right balance (sheet) post pandemic
• How has the pandemic impacted the expat outlook?