Alex is the founder of 9Kilo Moving, which he started to help people easily find and choose the right moving company to make their move as stress-free and seamless as possible. He has spent over 20 years working in the moving industry, so he knows every aspect of the business and uses his knowledge to write about the industry and give moving advice. More on about us page
Several people move homes when offered a job in a new
location. Cities like San Jose and San Francisco, at the heart of Silicon
Valley, are locations that see several new citizens each year for this purpose.
When a company hires someone who has to relocate for the purpose of the job,
they generally offer a relocation package. This gives the potential employee
the incentive to accept the offer and also makes the mammoth task of moving for
a job seem more manageable. In fact, some companies get an edge on the hiring
process over others just because of a good relocation package.
There are usually different types of relocation packages that can be offered, and it's a good idea to get an understanding of relocation packages before you have to negotiate one with your almost-employers. Our comprehensive guide on negotiating a job relocation package can help you understand just what to expect and reach a middle ground with the company.
CALCULATE MY MOVE
A relocation package is a package provided by a company to employees who have to move for the sake of the job, to cover certain costs and expenses they have to incur for the move. They can also offer a relocation package to an existing employee who is being transferred. Naturally, the more costs that are covered, the more tempting the offer and the higher the chances you’ll accept. It is also a reflection of the company’s care and concern for their employees. But remember that a package must also be in lieu with the company’s financial reach. Relocation packages can range from $2,000 to $100,000 in worth.
See also: Financial Moving Assistance for your Relocation
There is no fixed template to relocation packages. In fact,
companies aren’t even rule-bound or obliged to offer them! As a result,
relocation packages often differ across companies. We’ve listed down some of
the things you can expect in standard relocation packages.
Home hunting: Some companies pay for one or two orientation trips for the employee to get
acquainted with the city and its neighbourhoods. This is generally inclusive
of transportation, lodging, and meals,
and can help you with finding a new home in your soon-to-be-city.
selling and buying a home: Your company could also cover things that are
part of the process of selling your old place and buying a new one. This
includes real estate commissions and closing costs. You can even make use of
their offer with professional marketing help. If you’re a renter and you’re
breaking your lease, you will have to pay a resulting fee as a penalty. But the
relocation package is likely to cover that fee for you. Employees getting a
transfer will not have to worry about closing costs, fees on purchasing a
property or a security deposit for rent. The company will help in these ways
with finding a new home close to the office, and may even take care of the
mortgage interest rate.
Moving costs: Moving itself can be pretty expensive, but moving costs are generally taken
care of in relocation packages. There are different types of movers, from those
who will only transport your stuff to those who take care of every last detail.
While the latter are much more convenient, they are also expensive, covering
packing and unpacking, loading and unloading, as well as transportation and
However, most companies are willing to pay for full service movers to save the employee the stress. This ensures you have the mindspace to deal with everything else and can begin life (and work) in the new location on a good foot. They could also include additional services like paying for a short-term storage unit to help with the moving process.
schooling assistance: Moving with a family means a lot more searching.
Relocation packages can cover job recruitment leads or assistance for your
spouse and schooling recommendations for your kids. You could also be offered
additional child care assistance.
Travel expenses: Unless you’re getting boxed up with your furniture, you and your family will be
travelling for the move yourselves. Relocation packages cover this travel cost,
as well as the cost of shipping your vehicle to the new location.
allowance: A temporary housing allowance for at least a month is generally
part of a relocation package. This could also go up to 2 or 3 months, giving
you adequate time to go house hunting.
Other expenses: Moving always brings about several other smaller expenses like cable and internet services, hiring professional cleaners and updating addresses and licenses. These costs are usually reimbursed as part of the relocation package.
As mentioned, relocation packages differ, not just in what
they offer but in the types of benefits as well. They vary depending on the
size and financial reach of the company, their relocation policies, the role
and value of the employee, and how often they relocate their employees and
Lump sum: A fixed
amount of money, always finalized before the moving process is started, is
given to the employee to pay for expenses. The employee can then divide how and
where to spend the money, as long as it is for the move and transfer. However,
once the money is replenished, you cannot ask for more or be given more
Sure there are chances you’ll have a little extra money left
over after the move to spend, but these chances are quite slim. Since the
amount is negotiated before the move, it may not always cover all the
moving-related expenses. This requires as much beforehand research as possible
so your estimates for the costs come as close to the amount you get as
Reimbursements: Instead of a lump sum, you pay for things yourself and submit receipts for the
costs to the company, which will then reimburse you. You have to be responsible
for and neatly store all the receipts, no receipt = no reimbursement. However
this too has a limit - companies usually set a cap or an upper limit on the
amount it will reimburse. If your expenses go over this cap, you’ll have to pay
for the extra amounts yourself.
involvement: The company outsources all relocation coordination and
logistics to a third party, usually a broker. They manage all the processes
including the sale of your old home, assistance for your spouse and kids,
moving services and temporary accommodation.
Direct management: Larger companies that offer a lot of relocation packages in a year usually have
their own arrangements. They hire and pay directly for professional movers for
your relocation. This is usually combined with a lump sum or reimbursement
process that can cover other related costs like travel and temporary housing.
These aren’t applicable across the board, but we wanted to
give you an idea of what to be prepared for when it comes to paying your own
Furniture allowance: While the relocation package may cover housing and moving costs, it won’t give
you a lump sum to spend on furniture. However, there’s no harm in asking,
especially if you’re starting from scratch with furnishings.
Disturbance fee: Among other things, a move is always a bit disturbing. Not only does it throw
your daily schedule for a toss, but you have to familiarize yourself with a
whole new home, location, workspace and life! Some companies offer employees a
disturbance fee - a lump sum meant to serve any purpose, like the drop in
income from your spouse’s job changes to childcare. However, it is not often
that this is dished out.
Look at the
specifics: Make sure you know exactly what’s being offered before making
and finalizing any arrangements. Knowing exactly what is going to be reimbursed
and what will be taken care of will help with deciding things like when and how
to move, what to take with you and what to leave behind, as well as the
location of your new home.
Ask questions: Always ask about any additional things you may not know about, like approved
expenses and payback clauses. Things like whether you have to repay the money
you received under the relocation package if you quit the job within the first
year of your joining, or even just when you will receive the reimbursement
money, are good to be aware of beforehand.
assistance: If the company offers assistance in the form of personal hand
holding, ensure you know your way inside-out of the policy and make sure you
have got the best of what they have to offer before feeling like you’re forced
to turn into your own pockets.
Employer contracts: Sometimes, big companies who often offer relocation packages have contracts or
deals with a moving company. In this case, you’ll be entitled to a
reimbursement only if you enlist the services of that one moving company in
particular. Make sure you fact check this.
Keep your head: Overall, the process is sure to be complicated. Not only are you buying and
selling homes, you’re also roping in your employers with the details. There’s
going to be a lot of paperwork, photocopying and phone calls. Try to be as
organized as possible, so the process is easier to handle.
Relocation packages are a tug of war between employer and
employee - packages with rich benefits and appealing offers are lapped up but
this takes a toll on the company’s finances. While they ideally want to spend
as little as possible on this obligation, they’re willing to talk things out
and reach an amicable middle-ground for top talents to join their team. You
finally know almost all there is to know about relocation packages. Now, the
part that readies you for the phone call of negotiation and tactic with your
best way to go into this is with preparation. Find out about your company’s
relocation package, with what it typically includes and doesn’t, and look for
spots of negotiation.
into moving services, find out approximate prices of things like packing and
unpacking, etc. Think of where you’ll need assistance, whether it’s jobs for
your spouse or a furniture allowance. Finally, try to find out as much as you
can about the costs you’ll have to incur in the new location, like median home
prices, cost of living and taxes. Get estimated costs for all of these and list
them down. This helps negotiate benefits for you as backing it up with costs
from your research is more likely to convince your company that the money won’t
go wasted on frivolous spending.
Be direct: With
your research to back you, you can discuss what your package should ideally
comprise with your employers. Be straightforward, concise and rational, and use
exact numbers to state your case. If you have an offer from another company
providing a better package, mention it to your employers. See if this makes
them raise the benefits.
Get it in writing: Once everything is finalized, ensure you have the relocation package in
writing. Every detail, including time-frames and special clauses, should be
listed down. Whether it is a letter or an email, it is important to have it all
down. This also helps you get organised for the move.
Under the lump sum relocation program, the lump sum is considered as income, making it fully taxable. The employee is responsible for this tax. Companies are aware of this, and sometimes offer a larger gross amount so that the amount after taxes are deducted is still enough to cover the expenses that will be incurred. If the company isn’t providing tax assistance, a certain percentage is taken off the total that the employee receives to cover the relocation bonus tax owed to the IRS.
See also: IRS Moving Expense Deductions
However, in the scenario that the company pays directly for the services and processes, you’re in the clear. You won’t need to bother about any taxes in this situation, whether it is direct management or third-party involvement. In addition, moving costs and travel expenses may be tax-deductible if they meet IRS conditions that apply. Collect and save all your relocation related receipts, no matter how big or small, and submit them with expense reports. Moving for a job has the added intimidation of a new working environment, which is why it is important your move goes as smoothly as possible. If your relocation package leaves choosing the movers to you, make use of our comprehensive services to find the right movers equipped with whatever it is you need for your move.
See also: Job Relocation Guide
Fill Out the Form and Get 100% Free Moving Quote!
Expert & Professional
High Quality Work
Complete the form to get instant quotes! Its that easy!
We will send you a text with a short verification code
9Kilo brings the movers directly to you!
We'll find the top moving companies for your needs and have them
call you right away. Search no more. Just sit back and relax!
This is your estimated moving cost.
Professional movers will contact you within one business day.
We're sorry, but we are unable to service this move because it is considered a local