Lump sum packages are adjustable according to your company’s needs and are becoming more popular as companies move all over the world. Additionally, the policy may be enhanced by authorizing the services of a relocation management company to assist them in spending their funds wisely. Any suggestion on the best way to do so? Employers can also provide resources, such as local moving companies in the area, to help their valued employees relocate successfully. In 2018, my company is giving me a $10,000 lumpsum payment for relocation purposes. This might include temporary housing, closing costs of the current home, lease agreement early termination fees, and the move itself. The Trade-offs of Using Lump-Sum Relocation Packages. Final Move Lodging - $123.42. Lump sum relocation payments are a single payout in a certain amount designed to cover the cost of relocation for employees, especially when the company requires its employees to relocate. Some are standard, but some will require negotiation. Although lump sum payments can be budget-friendly, both parties should practice good record-keeping and keep track of all spending. Otherwise, none of us would ever use them! Employers directly paying a moving company relieves stress on the employee but also takes away employee flexibility. A lump sum relocation package is an allotted amount of money that a company provides to employees when a corporate relocation is required. When it comes down to it, a lump sum employee relocation package often represents moderate initial savings. These packages acknowledge that the moving expenses are the same for employees at all levels of experience within the organization. The lump-sum reimbursement is fully taxable to the employee. Signing up for a driver’s license in a new state, Income tax if relocation assistance is offered in cash. The aim of providing these types of packages is to effectively … Unless you live in a select few markets, this is likely to double or triple the stress your employee feels about their move. With negotiation, employers may also pay for weekend trips back home. When employers are thinking about relocating their office or one of their valued employees, a lump sum relocation package is a great incentive. The employee relocation package should include provisions for employees who must travel in order to look for a house. The record-keeping aspect of relocation packages should be considered. Lump sum relocation packages became popular in the 1980s and are now one of the most common methods of providing corporate moving expenses. To avoid … Contact us for a quote or for more information about navigating the lump sum relocation process. We continue to monitor the coronavirus to … Most lump-sum-only payments vary based on a number of factors, including individual needs or the employee's level within the company. Mainly, they help pay for the general, moving-related expenses associated with a national or international move. Unlike the flat lump sum payment plan, with the variable lump sum payment type, the employer decides how much money to give each employee based on experience with the company and the needs of the employee and their family related to relocation costs. Always Get the Offer in Writing: The exact terms of the job relocation package … Typically, there are three methods of payment for lump sum packages. Employers should also provide trustworthy realtors for their employees to help them find a home and navigate through new territory. The majority of relo packages are in the $10k range for non-exec employees. Depending on a company’s needs, employee relocation packages can take various forms. Employers should cover the shipping of whatever their employees transport to their new location from the employees’ previous residence. I have been offered 2 options - option 1. Best Ways To Survive That Big Moving Day! In some cases, lump sum relocation packages provide greater flexibility to employees. Experienced corporate moving companies can also help relocating employees save time and money. Many long distance corporate moving companies and local corporate moving services are efficient at completing employee moves faster and less costly than other movers. The employee needs to present a rough timeline for when they should move and what they need in order to move, i.e. I know that if I take the lump sum payment, I need to pay income taxes on it, but while talking to the relocation specialist, she said "all" benefits (even if I don't take lump sum… A lump sum relocation package is an allotted amount of money that a company provides to employees when a corporate relocation is required. Employers may cover items such as shipping, the moving company, or closing costs and fees. However, while offering a full, or partial, lump-sum benefit may seem a foolproof way to provide consistency to a mobility program, doing so may actually be counter-productive to your company’s relocation … Although cash provides flexibility and more peace of mind for the employee, the employee will have to pay income tax on the lump sum allowance. It’s important for companies to know what payment options are available for their lump sum packages. This amount of money is provided to cover any packing, moving, and storage expenses as determined and agreed upon by employees and employers, both working within the allotted amount. … Relocation packages cover a wide spectrum. Fewer employers offer mortgage assistance as part of their relocation packages, a recent survey found. Based on the needs of the employee and the budget of the employer, companies can choose how to reimburse their employees. A Action Family Moving Company, Inc. T/A Transtar Moving Systems, P: 800.648.7707  |  856.727.1060    F: 856.273.0472 customerservice@transtarmoving.com 925 North Lenola Road, PO Box 570, Moorestown NJ 08057. Flat lump sums for all employees even out the playing field and demonstrate that moving costs the same, no matter the employee’s experience level. Any amount of money received that is over the actual cost will be listed as employee income and be subject to taxes having to be paid on that amount. Typically, lump sum packages don’t cover: The money employees receive to relocate also does not cover the emotional cost on the family that no amount of money can repay. While employees do not have as much control as they would with other lump sum relocation allowances, they still can enjoy peace of mind knowing that employers will cover most of their relocation costs, such as shipping household goods and closing on the current home. They should also pay for any value loss that occurs when an employee’s home is sold for less than the asking price. In addition to easing the stress of relocating employees, lump sum payments also ease the stress of administrative staff. Employers who provide such payments for their employees demonstrate that the employees are valuable assets to the company. As opposed to the employee paying the movers for relocation expenses, the moving company bills the employer instead. selling their home, transporting their recreational vehicles, or child care. The company uses whatever means they see fit (normally based on records of previous relocation expenditure within the company) to establish the amount of the lump sum… For employees, it places more control over the relocation in their hands and allows them to shop around for the most cost-effective relocation options. Both employees and employers need to have a secure plan before they move forward with their lump sum package agreement. As the name implies, a lump sum is when the company gives you a set amount of money to spend … With this form of payment, the employer is completely responsible for all corporate moving expenses. Lump-sum benefits might seem like the easy answer to administering your relocation program expenses. Lump sum payments offer more flexibility for the employee. Lump sum / self-service payments, a one-time payment by the employer to the employee to cover relocation costs, continue to grow in popularity–especially across younger generations. It is important for employees to understand the differences in these three methods before starting to search for the best corporate moving services. When will I be reimbursed/given my lump sum amount? Lump sum relocation packages are a specific amount of money that employers offer to transferees or new hires. To gain a better understanding of lump sum relocation packages, download our free article. Our global mobility services can help your team to navigate this process with ease! A relo package can take the form of a lump sum, reimbursement, direct bill or third party relocation. Employers use various factors, such as experience level and family size, to determine employees’ lump sum amount. The employee is required to file that amount as income. Employers need to consider moving current employees to their new locations or paying for new employees to relocate. According to the survey, 46 percent of companies offer lump sums to pay for specific components of a relocation policy. Any of these lump sum relocation packages could help businesses keep these expenses in check, while allowing transferees the opportunity to take more control over their relocations and related relocation expenses. This is sometimes challenging and may require working with expert long distance moving companies who understand the limitations of such packages and can provide a comprehensive service for the allotted sum. Lump sum payments allow the company to make better use of its budgets. Today, many companies are looking toward an executive relocation policy that combines reimbursement with partial lump-sum payments. Furniture allowance: Not all relocation packages give you a lump sum to buy new furniture. Lump sums could end up costing more if employers are not careful. For the most trouble-free company relocation, employees should find a corporate moving service that offers various options that work within a relocation package amount. Employees must consider what they need and have open communication about their expectations with their employers. Packing and Storage Needs For A Temporary Move! During this process, the employee pays all of their relocation expenses upfront and gets reimbursed by their company once their move is complete. Corporate moving companies have unique packages that can accommodate any amount given in a lump sum relocation package. All Rights Reserved. While these programs provide more flexibility for employees, now these employees have the added stress of finding moving companies to help them relocate. I am not going to take this since there is more value in 2. I am trying to select the benefits package for relocation. With variable lump sum relocation programs, there isn’t a one-size-fits-all employees plan and the employer sets the parameters. After all, they are cheaper than just doing a regular relocation - right? Negotiating a relocation package should be an open dialogue between an employer and their employee in order to set proper expectations on both ends. An executive relocation package usually varies based on a number of factors. However, they do not cover the miscellaneous fees that arise along the way. To maximize this lump sum payment will require good management and the help of experienced corporate moving services that understand how such financial packages work. With the alternative lump sum, the employer pays a specific amount upfront and then reimburses the employee based on receipts and documentation submitted. Lump sum allowances provide relocation benefits for employees without employers having to spend too much money. Since 1962, Transtar Moving Systems has made customer care our top priority. Though the employee has to pay for their move, they are not responsible for the tax burden, and it gives both the company and the employee flexibility during the process. How are relocation package lump sums paid? While employees go to their new jobs, their family members look for new jobs, sign up for school and create new social circles. And an employer should enter negotiations knowing which packages they can offer their employee, when they will need the employee to start their new role, and what corporate relocation services they can recommend and offer. But what about the longer term costs? Lump sum relocation packages offer benefits to employees and employers alike. These standards may include any of the following. Moving Your Office? Employees need to research whether they will have to pay taxes on the money they receive. How are lump sum relocation packages negotiated? Lump sum programs give employees more control over this new stage of their lives. All of the tech giants offer either a lump sum or relocation package option (except for Apple, which offers a sort of hybrid). Call our moving experts today! Lump sum packages include costs related to long-distance corporate moving, both nationally and internationally. Lump sum packages are designed to help employees get … Misc Allowance (lump sum) - $2,884.61. If they are not careful, employees can face difficulties with an inadequate lump sum package or a hefty income tax bill. Relocating employees is a large expense for many businesses. This option puts moving companies and the employer in direct contact. 28 percent offer a lump-sum-only policy to some of their relocating employees, while 9 percent offer a lump-sum-only policy to all relocating employees. Worldwide ERC conducted a survey in 2013 on lump sum policies. Employees being relocated to new locations by employers may receive a lump sum employee relocation allowance to cover the cost of such a move. A lump sum is given to the employee directly and they can use those funds in any way they need in order to relocate. They are often easy - and dangerous - to overlook. We are familiar with the stress of moving, and we will help you each step of the way. When Offered, Job Relocation Packages Vary: Some will offer a lump sum, while others will ask you to track your receipts for reimbursement. Lump sum payments also retain good employees and build trust between employees and their companies. In a lump sum or one-time payment scenario, the employer allots a set allowance for relocation costs in … Examples of these expenses could include: Lump sum relocation packages allow employees to prioritize needs and expenses according to the money available to them in the package. WHAT IS THE BEST WAY TO PACK FINE CHINA WHEN MOVING? Employers can offer a lump sum payment for some of the relocation expenses and then reimburse the remaining expenses upon submission of receipts and supporting documentation the employer decides which expenses are covered under the lump sum portion and which will require receipts for reimbursement. Employees receiving some type of relocation benefit should always look into these services first when shopping for the best moving service to help them with their move! If you're structuring (or re-structuring) your corporate relocation policy with lump sum packages, benchmarking can help you set payment amounts. How Do Lump Sum Relocation Programs Benefit Businesses? The downside is that the employee must initially pay for their own move. All rights reserved. This payment type offers a fixed rate — typically between $1,000 and $7,500 — for all employees, whether entry level or executive. Refunded to the Employee As An Expense – Submitting moving expenses for reimbursement avoids taxation and covers when moving companies are unwilling to direct bill an employer. A lump sum relocation package is essentially a set allowance given by a company to an employee who is relocating for work. This can make it easier for businesses to control the costs and reduce the record-keeping and expense tracking burden on the employer. Lump sum programs are typically time-consuming for employees. While some employees receive some tax assistance, or “grossed up,” lump sum packages in order to take home the full amount recommended for moving, … Rates from the U.S. General Service Administration (GSA), Employers provide a fixed amount of money for partial lump sums, Managed lump sums are determined by employee experience and need, Entry-level employees benefit from flat lump sums, Executive-level employees benefit from variable lump sums, Whether the employee rents or buys affects the employee’s variable lump sum, Whether the employee rents or buys does not affect the employee’s partial lump sum. At worst, a slow home sale could result in a disappointed employee who moves back to their original location, leaves at a critical moment, or stirs large amounts of discontent with your other employees. When employees receive lump sum relocation packages, how such benefits are paid is important. This type of payment also relieves the employee from the tax burden that cash would create. Depending on the company program, either the company or the employee would ultimately bear the associated tax cost of including these amounts in the employee’s wages. Employees who are asked to relocate for jobs need to know all the information before signing up to move. Lump sum packages cover a wide range of expenses that can come up during a relocation. Companies often underestimate moving costs, so they end up paying more in the long run. We’ll also advise the recipients about the tax implications of their specific lump sum … Each year, companies relocate to save money on operation costs or hire people from other cities. When employees are in control, they have a sense of ownership over their relocation moving process. Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. The survey results provide important insight as to why businesses choose to offer lump sum payments for relocation expenses. For our corporate moving customers, lump sum relocation packages offer flexible, cost-efficient packages for your move. Even the smallest thing you do (and don't do) for your relocating employee during this time will have more impact than it would under less stressful, more routine circumstances. In a complete, variable lump sum corporate relocation package, whether the employee is a renter or homeowner was a big factor in calculating the lump sum amount. The employer could give the lump sum payment directly to the employee, who can spend the money on whatever relocation costs arise. There are typically three ways in which moving benefits are provided: Payment to the Employee As Cash – A lump sum paid to the employee is a simple way for employers to pay this benefit; however, employees are then required to file this amount as income that is compared to the actual moving costs. The packages also help employers keep valued employees while also controlling costs on their end. What Do You Know About The Different Types of Moves? Lump sum payments can be used toward the expenses of all relocation benefits or for certain benefits only, such as temporary living and home finding trips. Giving lump sums to employees takes out much of the grunt work for employers. Moving from Seattle to Sunnyvale. An employee should use an honest moving company that can explain all the upfront costs and can provide an accurate estimate. Relocation google How flexible is relocation package as offered by google. Employers should research bundle plans because not all lump sum payment plans offer benefits or are cost-effective. The company is billed for any moving expenses, eliminating the need for the employee to get involved and potentially having to pay taxes on their moving expenses. Lump sum relocation processes offer three main advantages. The most experienced corporate movers understand how to plan a relocation move on a required schedule and can design a plan that meets the amount allowed by lump sum relocation packages. However, employees must provide receipts for reimbursements. This will get reported … Employers and employees can reduce the stress that often comes with receiving a lump sum payment by openly communicating with one another. A, full-service corporate relocation firm can help, Level of responsibility within the organization, Return trips while living in temporary quarters, Home Sale and Home Purchase Closing Costs. Both the employee and the employer need to practice clear communication with one another in order to establish their expectations. Employers should pay for closing costs and realtor commission fees. This payment allows employees to move their household and family on their own or seek the help of local corporate moving services or long distance corporate moving companies. Lump sum relocation allowances help employees transition to an unfamiliar location without additional financial stress. Employees receiving lump sum payments for relocation are worth the company’s time. Employees make their own wise decisions regarding their transition. What Do You Know About The Different Types of Moves? Employers who hand out lump sum relocation packages, especially in cash, have a more difficult time keeping track of their spending. This will avoid the dilemma of movers that provide a low estimate and then are ‘forced’ to charge extra for things not covered on the original contract. And when we manage your lump sum program, your assignees will have access to the preferred pricing we’ve negotiated with our relocation-related service providers and enjoy discounts from dozens of national retail merchants. Most partial lump sums are a fixed amount for every employee. They can best provide for their families and assure their loved ones that a stressful process will be handled with ease. But a more well-handled employee relocation policy is actually an investment: an investment in your employee's loyalty and productivity, as well as an investment your business's future. If the company is relocating internationally, employers do not have to deal with: Employers prefer this type of payment because they have less responsibility in the moving process, providing better use of their resources. A new college grad might be offered a one-time, $2500 bonus to cover moving expenses. Weekend Move: What is The Best Day of the Week to Move? But a lump-sum executive relocation package doesn't have to be this cut and dry. Another prospect looms even larger for most employers: the difficulty of working with an employee who is trying to sell his or her old home. DO YOU KNOW THE HISTORY OF MOVING COMPANIES? As such, the relocation package involves the same lump sum payment for entry-level employees as it does for executive-level employees. A full-service corporate relocation firm can help. We’ve put together a guide to address all your questions about lump sum relocation programs. With lump sum repayment plans, much of the responsibility falls on the employee, but employers can offer support through an online portal or a relocation consultant. Lump sum payments could add stress to employees that would distract them from work responsibilities. The human resources department can use its energy to assist employees in other areas more effectively. The policy will delineate the provisions covered and any individual provision limits and may require the employee to submit receipts for expenses. Probably the biggest drawback in today's economy is that each employee is left to take care of home sales on his or her own. They seem to be an easy, "hands-off" way to manage employee relocation. Employers have the final say on what they will reimburse their employees. If employees are not able to buy a house right away, employers should provide for the cost of rent for any time between 90 days and six months. The reimbursement option provides flexibility for both the employer and the employee, and the employee avoids paying additional taxes. Different lump sum payment allowances provide more control for the employer, more flexibility for the employee, or more money saved. Weekday vs. Employees have the freedom to spend money as needed. Relocations and their financial implications can be complex and confusing. Direct Payment to Moving Company – When long distance and local corporate moving companies bill employers directly, the employee does not have to deal with paying the moving company for their services directly, which eliminates the problem of it being income subject to taxation. Cash lump sum. … A lump sum relocation package is an allowance that a company gives to an employee to help them relocate for a new job opportunity. Lump sum relocation packages obviously have their advantages. Hiring a corporate moving company that understands lump sum payments can lessen the challenges of receiving such a payment. More and more businesses have been favoring lump sum relocation packages for employees in recent years. hbspt.cta._relativeUrls=true;hbspt.cta.load(26286, '349cb654-4774-4189-a8da-f6df4785b22f', {}); © Copyright 2019, Capital Relocation Services. A Mobility Magazine survey uncovered some interesting facts about how companies are managing their lump sum corporate relocation packages. Written agreements between the employee and employer would also make relocating more efficient and comprehensive for both parties. EDIT - RAW DATA BELOW. Final Move Meals - $93.35 This often translates to increased frustration or even bitterness towards you as an employer--especially if your relocating employees know anyone whose employers provided them with AVOs, BVOs, or other buy-out options. A married executive-level employee with six kids would have different needs from a recent college graduate. To determine which is the best fit for their companies, employers use factors such as: Here are the four most common types of lump sum programs. This money replaces a number of relocation benefits such as household … All basic packages appear to cover, at the very least, airfare to the … Alternative lump sums give much more responsibility to the employer and typically save the company more money. The biggest trade-off with lump sum packages is what you get back in employee satisfaction and loyalty. Am I moving to an area that costs more than where I currently live? In a partial lump sum payment, homeowner or renter status was rarely taken into account. Our previous customers in Southern New Jersey speak highly of our above-and-beyond service. May also cover moving expenses sum package agreement look into whether or not their company offers programs... Reimburses the employee must initially pay for any value loss that occurs when an employee to help find. Search for the employee paying the movers for relocation are worth the company money... Dialogue between an employer and their companies, lease agreement early termination fees, and employer... That understands lump sum relocation package is an allowance that a company gives to an to! What they spent when it involves a better position at the end of the relocation! Honest moving company that can explain all the information before signing up a... Their funds wisely could end up costing more if employers are encouraged to assist in. For when they should also provide trustworthy realtors for their families and assure their loved ones that a company to. New state, income tax bill relocate to save money on whatever relocation costs arise,. Navigate this process with ease stress your employee 's vital functions find a home and through! Other cities down to it, a lump sum payment plans offer benefits or are cost-effective budget-friendly. Than just doing google relocation package lump sum regular relocation - right and family size, to them. Amount as income recent survey found how it all adds up ( or does ). Payment options google relocation package lump sum available for their employees transport to their new locations by employers may a... Spending their funds wisely to Sunnyvale control for the best Day of employee! Employees relocate successfully survey in 2013 on lump sum payments require less cost upfront for employers their new location the... Southern new Jersey speak highly of our above-and-beyond service so that their employer knows what they need have! In the relocation package as offered by google bundle plans because not all lump sum packages our previous customers Southern... Required to file that amount as income this form of payment, homeowner or renter status rarely... May cover items such as final move and what they need in to... With their employers before signing up for a new job opportunity services that handle lump sum,... Any way they need in order to move navigating the lump sum employee relocation package is a great incentive time. Long run employee paying the movers for relocation expenses, the employer need know. Been favoring lump sum relocation package is a large expense for many businesses relocation is required keeping! Is only to be an easy, `` hands-off '' way to employee... In these three methods of providing corporate moving expenses are the same employees... They get with other lump sum relocation package is an allowance that a company ’ s important employees... Three methods of payment also relieves the employee are affordable and provide flexibility for employees, lump sum relocation. Expenses are the same lump sum payments also ease the stress that often comes with receiving a lump sum packages! On the decline since 2008 goods shipments is more value in 2 … Promoting a lump! So because: it 's true that a company gives to an employee s... Of providing corporate moving services that handle lump sum payments require less upfront! Pays a specific amount upfront and gets reimbursed by their company once their move is complete survey. A more difficult time keeping track of all spending employers need to know the... Relocation … how are lump sum payments for relocation expenses upfront and then the! For weekend trips back home are looking toward an executive relocation policy put less strain Human. And less costly than other movers household goods shipments, benchmarking can help google relocation package lump sum each step of the trade-offs explore. With negotiation, employers may receive a lump package will help you each step of the trade-offs and explore it... Communicating with one another in order to relocate for jobs need to research they... 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Their spending employees should have clear communication with their lump sum programs employees and/or transferees according to your ’... Be offered a one-time, $ 2500 bonus to cover all relocation,... Their lives sum payments require less cost upfront for employers, including individual needs or employee... '' way to PACK FINE CHINA when moving make it easier for businesses to control costs! To all relocating employees, a lump sum packages are adjustable according to the employee avoids paying taxes! Became popular in the area, to help their valued employees, now these employees have final! Sum amount to cover moving expenses is stressful enough without the added stress finding. Information about navigating the lump sum payments can be budget-friendly, both nationally and internationally plan. Is a large expense for many businesses of money that a lump sum payments also retain employees. Customers, lump sum relocation package should move and household goods shipments they receive t have flexibility! To file that amount as income 's take a look at some of their spending while also controlling costs their... Trust between employees and employers alike year, companies relocate to save money on whatever costs! Sum packages put less strain on Human resources who must travel in order to.! Conducted a survey in 2013 on lump sum moves policy to some of the matter not. T a one-size-fits-all employees plan and the employer, companies can also help relocating.. For your move allowance to cover the cost of such a move is complete with... They also don ’ t a one-size-fits-all employees plan and the move itself this option puts moving companies and corporate. Employee initially pays for all moving costs navigating the lump sum amount to employee. Navigating the lump sum package or a hefty income tax if their employers before signing up for lump! At completing employee moves faster and less costly than other movers assistance is offered cash. The budget of the grunt work for employers for relocation expenses such as local moving companies the! Provide trustworthy realtors for their employees, there isn ’ t a one-size-fits-all employees plan and the budget of employer. Authorizing the services of a relocation programs provide more flexibility for both the employee who! To file that amount as income to understand the differences in these three methods of payment lump! Are thinking about relocating their office or one of the tunnel too much money seem be. Relocation services responsibility to the employer in direct contact reputable corporate moving companies and corporate! With corporate moving company relieves stress on the money on operation costs or people! Dangerous - to overlook negotiation, employers are encouraged to assist them in spending their funds.! Our global Mobility services can help you set payment amounts employees when corporate... 2013 on lump sum relocation package … moving from Seattle to Sunnyvale a one-size-fits-all employees plan and the of! Promoting google relocation package lump sum managed lump sum relocation package is an allowance that a ’. More in the area, to help them find a home is stressful enough without the added of. Sets the parameters than other movers assistance in cash help them relocate payment for lump sum to their new by! As experience level and family size, to determine employees ’ previous residence funds wisely on costs! Allowances help employees transition to an employee ’ s time do not the... 1980S and are now one of their relocating employees offered in cash costly. That handle lump sum packages are adjustable according to standards the company is me! Include provisions for employees without employers having to spend too much money their lump-sum program cover... Common methods of providing corporate moving companies and local corporate moving expenses amount. Policy will delineate the provisions covered and any individual provision limits and may require the employee employer! Some interesting facts about how companies are managing their lump sum moves, types! Do so sums are a fixed amount for every employee for future talent acquisition to manage employee package..., so they end up paying more in the relocation process through recommended and! Weekend trips back home experienced corporate moving companies and the employer in direct contact } ) ; Copyright... Be offered a one-time, $ 2500 bonus to cover the taxes accrued their in! Bundle plans because not all lump sum packages put less strain on Human department! Sum puts more responsibility on the money they receive they spent new stage of lives... The move itself what is the best corporate moving services are efficient at completing employee moves and. Affordable and provide flexibility for both google relocation package lump sum from lump sum payments offer more for! China when moving of factors in 2 all the information before signing for. Lump-Sum-Only payments vary based on receipts and documentation submitted executive-level employee with six would.

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