24/08/2026
Paul was catching up with a HR Leader last week that was considering moving to Lump Sums in Europe last week “because it is easier”. 10 minutes of spreadsheets later and she was stunned at how tax inefficient Lump Sums are on the old continent. Almost every country has some deductibles or exemptions for Mobility, whilst giving cash is always treated as income. As with all Mobility questions, to some extent the answer for how much you save is “it depends” but typically we see clients save 20-40% when moving to managed allowances (and improve the employee experience but who’s counting 🤣).
Paul thinks he's always surprised at how “traditional” mobility programmes have been deemed so expensive that it’s pushed companies to think Lump Sums are the only “simple” and cost effective option. Thankfully times have changed!
Curious, has anyone modelled this properly for their own programme, or is it one of those things we all assume someone else checked?
Two caveats worth saying out loud, before the Tax crew come for us! It isn't universal: the Netherlands, Germany and France all allow some cash “tax free”. And "services are tax-free" is too broad as well home search, visa fees and estate agent costs are taxable in plenty of places even when you pay the supplier direct (this is where you need a well honed policy)
