Relocation Packages for Employees: Everything You Need to Know

Employers and employees alike are embracing global mobility more than ever before, and it’s unlikely that this is a temporary fad. Remote work is here to stay, and employers must find new ways to incentivize and facilitate this mobility. One way employers can do this is through employee relocation packages.

Relocation packages can significantly benefit everyone involved. They allow employers to further their global expansion efforts and access new markets abroad while supporting staff that are moving for work. This can help increase employee retention and well-being.

In this guide, we’ll walk you through everything you need to know about relocation packages, including what’s in a typical package, the different types of packages, how to set up a relocation package at your business, and more.

What Is an Employee Relocation Package?

An employee relocation package is a perk some employers offer that helps employees move to and ease into a new location for work. For example, employers may offer it if they need to relocate an employee for business needs or if an employee wants to transfer to another one of the company’s locations. Sometimes, employers offer relocation packages to new hires that are relocating to take the job. As the name suggests, a relocation package includes several items to help employees successfully relocate.

What Is Relocation Assistance?

The term “relocation assistance” is often used synonymously with “relocation package,” but the former refers to the specific forms of assistance employers offer to their employees. For example, an employer paying for a moving company to pack and unpack an employee’s belongings is just one type of relocation assistance.

What Does a Typical Employee Relocation Package Include?

A relocation package is an optional benefit employers may choose to offer, so it’s up to your company to decide what’s included and outline any parameters employees must meet to qualify for the perk. Below are some of the most common perks included in an employee relocation package.

Professional Moving and Packing Services

The employer covers some or all of the costs of hiring professional movers and packers to make the relocation process easier for employees. This may also include purchasing any insurance that covers the cost of damaged or lost items during the move.

Temporary Housing

Temporary housing is beneficial if an employee moves to work in a new office location but can't secure a permanent place to live before their start date. With temporary housing, employees are guaranteed a place to live for a limited duration while they find a permanent residence. Most relocation packages offer to pay for at least 30 days of temporary housing, but employers can adjust the length to fit their business’s and employees’ needs.

Transportation Cost Reimbursement

Transportation is necessary for every relocation, so most relocation packages include reimbursement for transportation costs.  The reimbursement might cover the cost of gas and any plane, train, or bus tickets that were necessary as part of the relocation process.

Flexible Starting Date

New employees often start their jobs within two weeks of accepting an offer. However, the starting date may be delayed if the employee is relocating for the job. Many companies include flexible starting dates in their relocation packages to allow employees the necessary time to move.

Real Estate Assistance

Real estate assistance covers some of the costs associated with buying, renting, or selling a home. This might include paid advertising for the employee’s home, covering the cost of early lease terminations, reimbursements for any money lost on quick home sales, and more.

Types of Employee Relocation Packages

If you’re still wondering, “how does a relocation package work?” there are a few common ways employers offer relocation benefits. Here are some of the most common types of employee relocation packages.

Lump Sum

With a lump sum, employers pay employees a set amount to cover relocation expenses. Note that lump-sum payments can be taxed as income, so some employers offer additional reimbursements to cover tax liabilities in the form of gross-up payments.

Direct Billing

The employer directly pays for any services used in the relocation process. For example, a moving company would send the bill for their services directly to the employer.

Reimbursement

Employees are responsible for covering all moving expenses up front and will be reimbursed by their employer after relocating. Employers may fully reimburse employees or set a maximum reimbursement amount. For reimbursements, employees must keep receipts and records of all relocation expenses.

Outsourced Relocation

In this case, all aspects of the relocation are handled by an outsourced third party paid for by the employer. Besides paying for a third party's services, employers have no direct involvement in the relocation process. Depending on the complexity of the move, this may be as simple as hiring a moving company that packs, transports, and unpacks all of the employee's belongings.

Expatriation Assistance

This assistance applies to employees who are moving to a new country. In addition to covering transportation and moving expenses, expatriation assistance helps employees obtain work visas, receive language lessons, and anything else needed to assimilate to a new country.

How to Set up a Relocation Package for Your Employees

If your company is considering adding relocation assistance to your existing benefits package, you might consider the following steps:

• Survey your employees to see what aspects of a relocation package would be most beneficial to them.
• Research what other companies offer as part of their relocation packages. Pay close attention to competitors and other local companies to stay competitive.
• Assemble a team to help design the relocation package using what you found in the previous steps as guidance. Make sure to include your executive, HR, and payroll team members in this process.
• Once you’ve decided on a relocation package, announce the new perk to your company and ensure the details of the package are clearly communicated in your employee handbook.

How Much Does the Average Relocation Package Cost?

The average costs of relocation packages vary greatly and depend on a few factors. For example, whether employees are single, married, and/or have children is one significant factor, as well as if the employee rents or owns their home.

Some studies have estimated that the average relocation is between US$21,327 and $24,913 for renters and between $61,622 and $79,429 for homeowners. However, your average costs might be significantly different depending on what types of assistance are covered in your relocation package and your employees' locations.