According to Census Bureau statistics, approximately 30 million Americans moved in 2022. Work relocation was the third most common reason for these millions of people to move and accounted for 9.2 percent of all moves.
Those moving for work often negotiate a job relocation package to cover their expenses. In fact, The National Relocation Institute(NRI) reports that about 64% of American businesses offer employer-paid moving costs as an incentive for transferring employees and new hires. If you’re preparing for a relocation or negotiating a job offer, understanding what’s included in these packages and how to maximize their benefits is essential.
What Does a Relocation Package Include?
According to the Worldwide ERC, the average cost of relocation in 2024 for renters is $33,532 and $85,466 for homeowners. To cover these costs, some companies may offer a list of services they’re willing to provide, while others will simply pay each employee a lump sum and let the employee determine how best to use it.
Here are some common features to look for in your work relocation package:
1. Professional Moving Services
- A full-service moving company to handle packing, transportation and unpacking.
- Coverage for moving insurance to protect your belongings during transit.
2. Temporary Housing
- Short-term rentals or hotel accommodations while you secure permanent housing.
- Utility coverage during the temporary stay.
3. Travel Reimbursement
- Reimbursement for flights, mileage or gas costs to reach the new location.
- Per diem allowances for meals and lodging while traveling.
4. Home Sale and Purchase Assistance
- Help with realtor fees and closing costs to sell your current home and buy a new one.
- Access to relocation specialists who can guide you through the process.
- Expenses for house-hunting trips.
5. Spousal and Family Support
- Job search assistance for a spouse or partner, including resume services.
- Resources to help children transition, such as school enrollment support.
6. Reimbursement for Miscellaneous Relocation Costs
Relocation packages often include reimbursement for miscellaneous expenses such as:
- Driver’s license or car registration updates.
- Utility connection fees in your new home.
- Shipping personal vehicles to the new location.
- Training for a new job position.
- Pet expenses.
How to Negotiate a Job Relocation Package
Negotiating a relocation assistance package can save you thousands of dollars and make your experience more positive. Schedule an in-person meeting with your employer and prepare well in advance. Know what you’ll need to make the transition and ask the right relocation questions for your job. Here are tips for how to approach it:
- Assess Your Needs: Identify the expenses you’ll face during the move, such as moving services or temporary housing. Get a moving company estimate to understand your full costs.
- Research Standard Offers: Look up industry averages for relocation benefits, especially in your field.
- Clear Requests: Specify what you need, such as full-service movers, spousal support or help with home-buying costs.
- Get a Written Agreement: Ensure all relocation terms are documented to avoid misunderstandings.
The Tax Implications of Relocation Benefits
As you negotiate your relocation agreement, it’s essential to consider the tax implications. As of 2018, employer-paid relocation expenses are generally treated as taxable income, which means they could increase your tax liability. Moving expense deductions are also no longer available for most taxpayers.
To avoid surprises, consult a tax professional before accepting a relocation package.
How Do Relocation Packages Work?
Relocation packages may be paid out differently depending on company policy and funds use.
Financial options typically follow one of these models:
- Direct billing in which your company contracts moving professionals on your behalf.
- Lump sum packages where you can budget the total coverage as necessary.
- Reimbursement arrangement where you submit receipt of your moving expenses after you pay them.
- Third-party billing in which your employer outsources your moving needs to unaffiliated professionals that you may select from.
The Importance of Communication
When it comes to jobs that offer relocation packages, no two situations are the same. Communicate clearly with your employer, mover, real estate agent, utility providers and other involved professionals to ensure that you know where your package ends and out-of-pocket expenses begin.
The Team That Makes Relocation Easy
If you plan to relocate for work, partner with an experienced national network of moving agents. At Wheaton World Wide, our team simplifies the process by handling all your moving logistics. Contact your local Wheaton agent and learn how we work with you and your employer to plan and execute your move. We offer full or partial-service moving across the United States with easy financing to maximize the reach of your relocation package.
