What To Know About Your Employer-Paid Move

Asha Kennedy
Researcher & Writer
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Edited By Sarah Cimarusti
Published on November 09, 2021
4 min read

So you’ve just landed a new job (congrats!), and your employer is footing the bill for your long-distance move to a new city, state, or even country. But if you’re wondering what that actually means, don’t worry—we’ll walk you through the typical employee relocation package, discuss employer costs, and break down international relocation.

Keep reading to learn more about what to expect from an employer-paid move.


What is a relocation package?

If an employer is paying for your move, they will offer what is called a “relocation package” to assist you in your move. Services commonly offered in relocation packages can include:

  • A packing service
  • Transportation of your belongings from a professional moving company (and transit insurance)
  • Assistance selling your current home and finding a new one (including pre-move house-hunting trips, in some cases)
  • Temporary housing
  • Vehicle shipping assistance or reimbursement
  • International move coordination

Employees receive these relocation packages in a few different ways. The first is via lump sum—which means the employee will receive a pre-fixed amount of money to pay for all travel expenses. The second option is reimbursement, where the employee foots the bill initially, and then their employer pays them back once the move is completed. 

Sometimes, an employer will partner with a professional mover to handle all their employee relocations. This method is also referred to as direct billing, meaning the moving company will bill your employer directly.

Keep in mind that some employers offer “tiered relocation packages,” or packages based on how long you’ve been with the company, and individual or family circumstances. These packages can have a combination of the services mentioned above.

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You might be able to negotiate your relocation package

By paying close attention to what is included in your relocation package, you can determine if there’s an opportunity to negotiate services. For example, you could identify services that you need that aren’t included, like help with packing or towing a vehicle. If you’re upfront with your employer, there’s a greater chance they’ll be able to customize your relocation.


How much does employee relocation usually cost?

Employee relocation isn’t cheap, and if your employer is footing the bill for your entire move, you could be saving thousands. In fact, the average cost to employers for renters’ relocation packages is between $21,327 and $24,913. And it’s even higher for homeowners, costing between $61,622 and $79,429.[1]

It is no wonder, then, why employers will sometimes include a payback (or repayment) clause in their benefits packages!

Are employer-paid moves taxable?

Yes, most employer-paid moves are taxable, or considered “taxable income” by the IRS and local authorities. This includes all funds given to employees especially for household goods transportation, living expenses, lump sum payments, and more—which would be included on top of an employee’s taxable income for the year.

In order to offset the cost of income tax, some employers will either deduct the taxable portion of the funds given for the relocation in advance, or they will pay the tax on your behalf so you don’t have to. Always make sure to confirm with your employer so you know whether or not you’ll owe any money to the IRS come tax season. 


What about international relocations?

Because international moving can be so expensive, employers will usually work with a third-party professional moving company to coordinate the logistics of your move. More often than not, your employer will pay for all relocation expenses directly. This means you won’t have to pay out of pocket for services like household goods relocation, foreign moving expenses, and international moving services—because your employer will coordinate them with the moving company in advance.

Things your employer probably won’t be able to help you with? Here are few tasks you might have to tackle on your own:

  • Relocating and importing your pet to a new country
  • Getting a visa or a foreign driver’s license
  • Setting up utilities and bank accounts in another country
  • Registering with local authorities to pay non-resident taxes
  • Accessing local school systems, childcare, and medical providers

These aspects of an international move are crucial to helping you acclimate to a new country, but may include added expenses that your employer won’t be covering. So make sure you keep these in mind and communicate with your employer about your specific needs.

Are military moves considered employer-based relocations?

Absolutely, but how the military handles them is vastly different from corporate (or civilian) employee relocations. If the military reassigns you (domestically or internationally), they will put you into contact with a local professional moving company that is already contracted with your military agency. That company will assist you with the logistics of moving your belongings, while your military agency will assist you with the required documentation.


Final thoughts

Getting hired for a new job in a new place can be an exciting chapter in your life. And understanding exactly what services are a part of your relocation package and which costs your employer will cover will reduce the stress of moving to a new city or country, allowing you to focus on the things you need to settle into your new home.

Are you ready to tackle your employer-paid move? Did we answer all your questions? Let us know in the comments below!


Employer-Based Moves FAQ

What is the difference between relocation reimbursement and a bonus?

Relocation reimbursement is different from a signing bonus in that it covers most (or all) of an employee’s moving expenses in the form of a lump sum, reimbursement, or direct billing. A signing bonus is offered to an employee as incentive to relocate and/or to offset the cost of living expenses in the new location. The IRS considers both taxable income, however.

How do I report moving expenses paid by my employer?

You can report moving expenses paid by your employer as taxable income when you file your taxes for the previous year. If you had moving expenses that exceeded the amount you received (or were reimbursed), you may be eligible for tax deductions.

Can an employer pay for moving expenses?

Yes, an employer can pay for moving expenses, but they don’t have to! Companies will sometimes offer to pay for moving expenses via a “relocation package”—which could be given to an employee in the form of a lump sum payment, reimbursed at the end of the move, or handled directly by their chosen moving company.

What are reimbursable moving expenses?

Reimbursable moving expenses are exactly what they sound like: moving costs that are able to be reimbursed by an employer at the end of a move. The employer usually requires initial approval of the estimate, but will eventually repay the employee for all moving expenses once the move has been completed.

Additional resources

Sources

  1. Andrew Martins, Business News Daily, “The Costs of Employee Relocation.” October 01, 2020. Accessed October 07, 2021.
Asha Kennedy
Written by
Asha Kennedy
Asha Kennedy is a researcher and content writer who brings almost 5 years of experience working directly with multiple carriers as a Move Coordinator, including Mayflower, United, and Allied International. During her career, she has successfully partnered with diverse clientele to coordinate Military, International, Interstate and Corporate relocations—and uses this experience to create meaningful and educational content for future movers! Asha graduated from Hampton University with honors in English. Asha enjoys being in nature, reading books, and learning new things.