Education Knowledge Base
What is a hardship allowance?
Not all host locations are the same. A hardship allowance allows you to recognize living conditions and to acknowledge the challenges your employees face in designated locations. AIRINC’s hardship evaluations leverage an objective method to assess which locations warrant a hardship allowance and to determine how much hardship allowance to pay an employee.
How is the hardship allowance determined?
In some host locations, expatriates will face difficult living and working conditions as compared to their home country. These difficulties may come from a variety of factors – crime, inadequate medical care, climate, traffic, pollution, and cultural and other living difficulties. AIRINC assesses the difficulty of living in the host location. If the host location has difficult living conditions above a certain threshold, the company pays a hardship allowance to the assignee. The payment is determined as percent of salary and is applied to salary (capped).
Hardship percentages are reviewed once a year – the percent may increase or decrease throughout an assignment as local conditions change.