CANADA REVENUE TREATS EMPLOYEE RELOCATION EXPENSES DIFFERENTLY FOR EMPLOYER SPONSORED VERSUS EMPLOYEE PAID RELOCATIONS.  THERE ARE SERVICE CATEGORIES THAT ARE NON-TAXABLE WHEN PAID BY THE COMPANY, BUT ARE TAXABLE WHEN PAID BY THE EMPLOYEE. LET US HELP YOU DISCOVER HOW TO TAKE ADVANTAGE OF TAX CREDITS AND SAVINGS FOR THE COMPANY AND EMPLOYEE!

Introducing Mobility Partners (MPI), a full-service Employee Relocation Management Company that has helped thousand of employees and their companies with their relocation needs.  MPI’s mission is to make life simple for the employee, the family, the company and the chain of suppliers needed to ensure a smooth transition, with savings and tax credits every step of the journey!

LET’S START BY SAYING NOT ALL RELOCATIONS ARE ALIKE AND RELOCATION POLICIES DIFFER BY EMPLOYEE POSITION AND CIRCUMSTANCES

• Company sponsored relocations- the company has either one policy or tiered policies related to the job function. The company selects the service suppliers and makes all arrangements including direct payment.
• Lump Sum Payment- a one time payment to the employee to cover the anticipated cost or partial cost of the relocation.
• Capped Relocation expenses – there is a fixed relocation budget, and the employee draws from this fund as needed to the capped amount.

Regardless of the type of relocation or who is arranging services, MPI will have one point of contact with a customer care representative for the company and for the employee through their entire journey!

LET’S TOUCH ON A FEW AREAS WHERE MPI CAN BRING SOME EFFICIENCIES AND SAVINGS FOR YOU AND THE TRANSFEREE THAT COULD MAKE A DIFFERENCE!

1. COMPANY SPONSORED PAID RELOCATIONS

The initial step we take with any company is to review their relocation policy in terms of meeting the relocation industry best practices. This is a no cost service for the policy review.

Let’s look at few examples of how MPI goes to work for the company to add some cost efficiencies and offers some perks to the transferee:

• Home Sale and Purchase Assistance. MPI manages the process and with our real estate division being party to the transaction, we can ensure the home is priced right to sell and the employee is prepared in advance for the house hunting trip, including a mortgage pre-approval. Employee downtime can be reduced by 20-30 days with savings on both house hunting and temporary housing costs. Employees participating in this service can receive up to 10,000 Air Miles when buying and selling a home using this service. Reward flights start as low as 1200 Air Miles. We also can assist the employee in obtaining a mortgage at better than market rates through a mortgage broker network with the volume of business to obtain preferred rates for their clients.
• Savings on corporate housing. MPI has its own travel division with an exhaustive list of corporate housing providers and hotel properties with comparable amenities, which can offer substantial savings over traditional corporate housing properties and with locations where corporate housing properties may not exist.
• An Expense Management service that codes expenses by category as identified in the company relocation policy to benchmark the policy for efficiency purposes and future cost savings.
• Household movers are not all the same and MPI’s knowledge of their capabilities can save the company thousands of dollars in storage and temporary housing costs that may not be needed, especially with those smaller moves that may not require extended transit times or storage that may be the case with some carriers.
• A summary report at the end of each relocation identifying tax implications, if any, for the company and employee, which is an asset at T4 preparation time.

Management fees are waived for Venngo clients. Management fees being waived can range from $1200 to $5000 per employee file based on industry pricing standards. Service fees may apply in certain cases.

2. LUMP SUM AND CAPPED RELOCATION EXPENSES

• Lump sum payments are to be taxed at source unless receipt based. MPI can manage the lump sum, collect the receipts and eliminate the need to tax the employee at source. This gives the employee the funds when most needed, for example on a $20000 lump sum, at a tax rate of 40%, the employee has an additional $8000. The company can now claim the HST/GST tax input credit and in the $20000 lump sum example, this could be $2300.
• Canada Revenue for tax purposes treats relocation expense differently for company sponsored moves versus employee paid. Household goods moving expenses are non-taxable for both parties. The employee has limits on temporary housing costs and house hunting trips are taxable when paid by the employee, but not the company. MPI can coach the employee on where to allocate their lump sum dollars for tax credits and prepare a summary report for the company for audit purpose. Savings for the employee can be worth thousands of dollars and there are efficiencies for the company in having MPI prepare the fund usage report and identifying taxable versus non-taxable expenses.

Service fees that might apply are offset for the company by having the input tax credit on the lump sum amount.

To find more ways MPI can help you or your employee enhance their relocation experience or to address any sore points with your current relocation service or provider, please contact our business development team at 1-866-904-2495 or email us at info@mobilitypartners.ca