What is an assignment policy?
An assignment policy – also called an international assignment policy or global mobility policy – is the internal rulebook that defines how a company plans, pays, and administers international assignments. Mercer describes a good policy as one that brings together "business objectives, assignee expectations and market opportunities" – not a pure benefits catalogue, but a decision framework that carries from approval through to the return home.
The policy is therefore the foundation for the operational assignment management of every individual case: it fixes in advance which assignment type applies when, how tax and compensation are handled, and who in the organization decides what – so none of that has to be renegotiated for every new case.
Why one document for every case falls short
When building a policy, Mercer consistently segments assignments along three dimensions before any content is drafted: duration ("Permanent transfers", "Long term", "Short term", "Commuter", "Extended business trips", "Frequent flyers"), assignee profile ("Foreigners hired locally", "Returnees", "Employee-initiated moves"), and assignment type ("Strategic", "Traditional expatriates", "Developmental", "Regional", "Global nomads"). The reason: a three-month short-term assignment needs different rules than a five-year assignment with family in tow – a single document for both either over-provides on short assignments or under-provides on long ones.
In practice, this means most companies do not run a single policy document but a policy family – a shared framework document with principles and definitions, plus a separate policy for each assignment type underneath it.
The four-step policy design process
Mercer describes its own advisory process for building a policy in four sequential steps:
| Step | Core activities |
|---|---|
| 1. Current-state assessment | Stakeholder workshops, review of current practice, evaluation of existing tools and providers, cost overview |
| 2. Define approach by mobility type | Brainstorming workshops, cost simulations, initial policy framework and guiding principles, market benchmarking |
| 3. Draft the policy | Stakeholder approval of the framework, detailed policy per assignment type, assignment management structure, provider co-sourcing model |
| 4. Implement the policy | Formal approval, finalized documents, team training, provider RFP, communication plan |
Mercer labels this third step "Design detailed policy for each assignment type" and "Draft assignment management structure" – the policy is not drafted on paper for an ideal case in isolation, but in parallel with the question of who in the organization will actually apply it operationally.
What belongs in an assignment policy
Regardless of assignment type, the same content building blocks recur. For the preparation phase, GTN names specifically: candidate selection including salary, benefits, and applicable policy, the documentation needed to support the assignment structure, and the processes for pay delivery and settlement of tax liabilities in the home and host location. These three points are the minimum content every assignment policy must cover before an employee even departs.
| Building block | Typical content |
|---|---|
| Scope & definitions | Which assignment types, countries, employee groups; distinguishing assignment from business travel and workation |
| Approval & ownership | Who approves, what documentation is required, escalation paths for exceptions |
| Compensation approach | Home-based, host-based, or balance sheet vs. local plus as the base model |
| Tax policy | Tax equalization or tax protection, hypothetical tax calculation, ownership of tax filings |
| Allowances | Cost-of-living, hardship, relocation, home leave – see assignment allowances |
| Immigration & compliance | Visa/work permit, A1 certificate or certificate of coverage, reporting duties |
| Repatriation | Return process, final tax settlement, return role |
What companies actually regulate: numbers from practice
How these building blocks get combined in practice is shown by the KPMG Global Assignment Policies and Practices Survey 2023, based on more than 100 participating organizations. Among the policy types used over the past two years, three categories clearly lead: long-term or standard assignments (1 to 5 years) are covered by a policy at 92 percent of companies, short-term assignments (under 12 months) at 80 percent, and permanent transfer or indefinite-length moves at 64 percent. Project/contract-specific assignments (15 percent), developmental assignments (13 percent), and pure remote-work arrangements (11 percent) are covered far less often – many organizations still run these without a dedicated policy basis.
On the policy architecture itself, one approach clearly dominates: 72 percent of companies use a core-plus-flex model – a binding baseline policy supplemented by selectable or negotiable extras per case. Cafeteria-style and points-based models trail far behind at 22 percent each.
The concentration is even stronger for tax policy: 84 percent of companies apply tax equalization as the standard approach for all assignments under one globally consistent policy. Only around 5 percent each use tax protection or company-by-company tax arrangements. Asked who participates in the pre-assignment risk review, respondents most often name the responsible business manager (62 percent), followed by external immigration counsel (55 percent) and corporate tax (43 percent) – global mobility typically coordinates the process rather than deciding alone.
Segmenting by assignment type
Because short-term, long-term, commuter, and permanent-transfer cases need different compensation, tax, and documentation logic, it is worth structuring the policy by assignment type from the start rather than by topic. A short-term module typically covers per diems, hotel or serviced-apartment limits, and a simplified tax check; a long-term module covers full relocation logistics, school fees, and multi-year hypothetical tax calculations. Using a single document for both regularly leaves short-term assignments over-regulated and long-term assignments under-regulated.
Governance and exceptions
A policy without clear ownership of exceptions quickly turns into a negotiating basis rather than a rulebook in practice – exactly the "consistency" problem Mercer names as a common reason policies need revisiting. Who may deviate, what documentation an exception requires, and how precedent is prevented should therefore be an explicit part of the policy, not an informal practice left to individual mobility staff.
Tools such as premote map the policy logic – which assignment type triggers which approval, which documents, and which deadlines – systematically in the system, instead of managing it in a PDF that gets reinterpreted with every exception. This does not replace case-by-case tax or employment-law review, but it creates a consistent, traceable basis for HR, tax, and payroll.
FAQ
What should an assignment policy cover?
At minimum: scope and definitions, the approval process, the compensation approach, tax policy, allowance rules, immigration and compliance requirements, and the repatriation process.
Is one policy document enough for all assignments?
Rarely in practice. Most companies run a framework document plus separate policies per assignment type, because short-term and long-term cases need different levels of detail.
How common is tax equalization in assignment policies?
Per the KPMG GAPP Survey 2023, 84 percent of companies apply tax equalization as a globally consistent standard approach across all assignments.
What is the difference between a core policy and a flex policy?
A core policy sets binding minimum standards; a flex component adds selectable or negotiable extras per case. 72 percent of surveyed companies use this combined model.
Who should be involved in building the policy?
Besides global mobility, typically the responsible business manager, external immigration counsel, corporate tax, and – for larger programs – finance and the C-suite.
The information provided on this website does not constitute legal advice and is not intended to address legal questions or issues that may arise in an individual case. The information on this website is general in nature and is for informational purposes only. If you need legal advice for your individual situation, you should seek the advice of a qualified attorney.