The last few years of low unemployment numbers have motivated many companies to design attractive packages for potential hires, including relocation incentives. Even as recent events leave the future of the job market uncertain, companies including Capital One, UCHealth, Salesforce, and more are continuing to hire thousands of employees. As Americans adjust to this emerging new reality, we may see more and more people relocating for work.

If you’re relocating more than 50 miles for work, your future employer may offer you some type of relocation compensation. Usually, these packages cover “reasonable” moving and work-related expenses related to your move. According to a recent survey of 1,000 people who relocated for work, 26.4% of respondents received some kind of financial assistance from their company.

Every employer will offer a slightly different package—and many of the provisions are negotiable. (More on that in a moment!)

Generally, though, relocation packages fall into four categories.

The 4 Types of Relocation Arrangements

  1. Reimbursement: The company agrees to reimburse you for a list of covered expenses. You’ll need to examine exactly what’s covered, and you’ll also need to document all of your expenses so you can submit them for repayment.
  2. Flat Dollar Amount: You receive a lump sum to cover your expenses, and you’re responsible for managing all the aspects of the move. Essentially, this option rewards you for being as thrifty as possible, since you’ll usually get to keep whatever money you don’t use directly on your move.
  3. In-House Coordination: Companies who frequently relocate employees may simply handle the moving parts by directly arranging and paying for a moving company to relocate you. They may also supplement this service with reimbursement or a flat-dollar payment for miscellaneous moving expenses.
  4. Outsourcing to a Relocation Company: Your employer may contract with a moving company to handle your relocation. Your employer will pay the moving company directly for their services, so there’s no need to track your costs or manage a lump sum.

Keep in mind that the size of these packages is often related to your level of experience. If you’re a new hire, you may be offered a few thousand dollars. However, a top-level executive’s package may reach into the tens of thousands of dollars. A survey by the Worldwide ERC® reported that the relocation cost for a new hire renter averaged $21,327 and $61,622 for a new hire homeowner.

One more note: Relocation packages are open to negotiation. In fact, you may find that your future employer is more willing to negotiating the terms of your relocation package than your salary. If you’re offered a lower salary than you’re looking for, you may be able to ask for a bigger relocation package. For example, the initial offer may not include packing and unpacking services. If that would sweeten the deal for you and your family, get a quote for the cost and propose it to your future employer during the negotiation process.

In any negotiation, knowledge is power. So in this next section, we’ll show you the variety of costs that may be included in a relocation package. (Some of them may surprise you!) With a solid understanding of the possibilities, you’ll be better armed to negotiate the right relocation package for you and your family.

But, first, we want to address a couple of things you need to know before accepting a relocation package.

Don’t Ignore These Three Provisions Before Accepting Your Relocation Package

As with any agreement you sign, make sure you understand all of the provisions fully before making a commitment, as well as their ramifications for your personal finances. Three areas to pay special attention to:

  1. Payback agreements: Your relocation package represents an investment that your employer is making in you, their employee. As such, your agreement may include what’s called a “payback agreement.” If you don’t stay with the company through a certain time frame, such as 12-18 months, you may be required to repay your relocation costs. Make sure you read the fine print carefully.
  2. Lump-sum payments are taxable as earned income. Since moving costs are no longer deductible (with a few exceptions), realize that a lump sum payment may affect your tax situation.
  3. “Reasonable” expenses: Everyone defines this word differently, so it’s important to get clear on exactly what your employer will cover. For example, let’s say you own a harp. Your company may be willing to pay for the special handling to move your instrument—or they may not. Ask all these questions upfront, before signing your agreement.

Now, let’s talk about some of the common costs covered under relocation agreements.

What Do Employers Cover in Relocation Packages?

As we mentioned, every package will be different, but we’ll give you a run-down of some of the frequently covered costs you’ll see:

Moving Services: Your employer may simply cover the cost of the transportation of your goods, or they may also cover the full packing and unpacking of your goods. Either way, your personal effects should be covered by full replacement value protection, in which the moving company is required to repair or replace damaged items at their full replacement cost, regardless of their age. Make sure this important coverage is included in your package to protect your move.

Home Sale Costs for Home Owners: The costs of selling your current home and buying a new home may be included in your relocation package. Under this provision, your employer will cover things like closing costs, real estate agent commissions, and more.

Lease-Breaking Penalties for Renters: If you have to pay an early termination fee for breaking your lease, your company may be willing to reimburse you for it.

House-Hunting Trips: 7.2% of employees in a recent industry survey received some kind of reimbursement for a house-hunting trip. In addition to looking for a place to live, many employees use this time to look for other necessities in their new home area, including schools and child-care options. Depending on your agreement, your employer may cover transportation, lodging, and meals associated with these trips.

Temporary Housing Costs: 15.75% of those same survey respondents received reimbursement for temporary housing. If you have to move immediately for your new position, your employer will be much more likely to cover these expenses. Some employers limit the reimbursement period to 30 days, while others may provide as many as 90 days, sometimes in executive housing.

Transportation to Your New Home: Depending on the distance to your new home, you may be able to drive, and your employer may reimburse you for your mileage. If driving isn’t feasible, your employer may pay for your air or train travel, as well as cover the cost of moving your cars to your new home. If you need a rental car as a result, this cost may also be covered.

Miscellaneous Expenses: The little things really do start to add up. Think about things like the cost of changing over your driver’s license, registering your car in your new state, switching over your utilities, and more. Some employers may just offer you a lump sum to take care of these costs. In fact, 12.05% of employees in the industry relocation survey we referenced earlier received some kind of miscellaneous expense account associated with their relocation.

While these are the most common covered costs you’ll encounter, there are a few other possibilities you’ll want to know about, especially if you plan to negotiate your package:

Storage Costs: Let’s say you sell your three-bedroom home and spend 60 days in an executive apartment while you find, buy, and close on your new home. During that time, you’ll have to put a number of items in storage. Your company may be willing to cover those costs for you.

Family Relocation Expenses: If you’re bringing a spouse and kids with you, your company may be willing to help cover the costs of getting them settled. For example, they pay for services with a recruiter to help your spouse find a new job. Additionally, they may be able to help with school location assistance for your children.

Travel Costs in Transition: If you’re required to move immediately to take your new job, but your family won’t move for another 30-60 days, your employer may be willing to reimburse your travel costs between homes.

Older Family Members: If you’re caring for an elderly family member and you need to relocate him or her to your new city, your employer may be willing to assist with those costs as well.

The bottom line? It all depends on what your employer is willing to offer—and you’re able to negotiate.

The Costs of Relocating for Work

Relocating for a job is a significant event. It’s no small feat to pick up your entire life and move it to a new city. In addition to the logistics involved, relocating means establishing a whole new life for yourself—a new environment, a new daily routine, a new social circle, and more.

Before you sign any relocation agreement, make sure you feel secure in your decision to move, as well as the assistance your employer will offer you. That way, you’ll be able to approach the experience with confidence and excitement as you start this next chapter of your life.



Need help with your relocation? We’ve helped tens of thousands of individuals and families with their transitions, and we’d be happy to get you a complimentary quote for your move. Just reach out to us to get started.

Tell us about your move!

  • MM slash DD slash YYYY
  • This field is for validation purposes and should be left unchanged.