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Cost of living analysis
Our experts support companies that move talent across borders and need to operate a cost-of-living analysis to define their compensation strategy.
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since 1998
Studio A&P offers professional consulting services to businesses and individuals.
Studio A&P supports companies and individuals with their activities in Italy and Worldwide, providing specialized assistance in global mobility of workers, Italian and international taxation.
Language: IT, EN, FR, ES, DE
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Based in Italy and active Worldwide
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What is a cost-of-living analysis
COLA determination
A cost-of-living analysis is a comparative study of the expenses that employees may face, during an international assignment, to maintain a similar standard of living in their destination country.
To compensate for the difference in the cost of living, companies may provide to the employee a Cost-of-Living Allowance (COLA). The main goal is to ensure the employee is no better or worse off financially during their assignment
Arletti & Partners Team
The team at Studio Arletti & Partners is made up of over 50 highly qualified and multilingual professionals, specialized in global mobility and tax consultancy, including worker postings, Italian and international taxation, and immigration procedures both in Italy and abroad.
Our Areas of Expertise include:
- International Tax Law
- Commercial Law
- EU Labour Law
- Immigration Law
How to calculate the cost-of-living
COLI determination
A professional cost-of-living analysis takes into consideration a basket of goods and services (the “expat basket”) which is a curated collection of products and services used to compare costs between the home country and the host location.
The basket usually includes items such as consumer goods, services, transportation, utilities, housing and education. Depending on the company policy, the basket might exclude housing, education and healthcare, to be covered separately.
The difference in cost determines the Cost-of-Living Index (COLI). Such index determines if the assignee needs more money to maintain their home-country lifestyle.
Why investing in a cost-of-living analysis
Talent retention
A failed assignment can lead to significant costs to the company. Furthermore, sourcing new candidates can be very challenging. As the price stability can fluctuate worldwide, without a COLA the expatriate salary can effectively lose value, leading to dissatisfaction and, eventually, failed assignments.
That’s why companies prefer to invest significantly in talent retention, by investing in a well-structured global mobility policy, with standardized processes that should prevent high employees’ turnover.
Additionally, the global mobility policy may include professional relocation services and spousal support programs, to help the partner to adapt to the host country.
Why choosing Studio A&P
Service delivery
We adhere to established processes and internal policies for the provision of our services.
- We aim to provide an initial response within 24 hours of receiving your request.
- You can send us your documents by conveniently uploading them remotely using the A&P management system.
- Our immigration experts can assist you in English.
- We can assist you with all over Italy and worldwide thanks to our network of partners.
F.A.Q. about the service
What if the cost of living in the host country is lower than in the home country?
In this case, most companies usually do not deduct any negative COLA from the employee’s salary, despite this may cause issues in mobility and repatriation.
How to manage exchange rate fluctuations?
Such fluctuations can complicate the COLA implementation, creating a disparity between the intended purchasing power and the actual value received. To prevent such problems, companies need to update allowance frequently and invest in transparent communication to their employees.
Discover more about this topic with our guides
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Contact us for assistance
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Consultancy on the cost of living analysis
- Duration: 30 min
- Starting from: €110 VAT incl.
- Language: EN
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