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What To Ask For In A Job Relocation Package – More than 60% of employees said they would consider moving for employment. But – whether it’s a new city or state – moving from one location to another can quickly become expensive. To make the deal even more attractive, you can offer relocation assistance.
But before you offer help with moving expenses, you may have questions about what it covers, whether it’s taxable, etc.
What To Ask For In A Job Relocation Package
Relocation Assistance is a package that employers give to current or prospective employees to help cover the cost of relocating for a job. Employers may decide to provide employee relocation assistance in the form of a refund, a lump sum payment, or direct payment to the appropriate parties.
Sample Job Transfer Request Letter Format Due To Marriage
Providing relocation assistance comes with benefits such as attracting superior talent, increasing employee retention, and improving engagement. However, consider the cost of moving employees.
According to one study, moving an employee can cost anywhere from $21,327 to $79,425, depending on whether they rent or own a home. Of course you do not have to pay 100% of the personnel costs. In fact, the average lump sum relocation fee is $7,200 per employee.
Please note that moving costs vary. Joey Sasson, Vice President of Sales and Logistics at Moving APT, shares his industry insight:
The cost of relocation assistance depends on the distance to be traveled, the number of people to be moved and the type of assistance required. The total cost of moving assistance would likely be several thousand dollars, with the average moving package costing between $5,000 and $7,000 for interstate moves.
Ask Louanne: ‘my Wife’s New Job Means We’ll Have To Move… But I’m Not Sure If I Want To’
Relocation assistance is not the only thing that matters. Employees decide to relocate for a number of reasons other than receiving corporate relocation packages.
That’s why you can further strengthen your ability to attract (and retain) talent by creating a competitive salary and benefits package and offering growth opportunities.
Is support for moving work taxable? Yes, according to the IRS, employers must include relocation allowances in employees’ wages. But this was not always the case.
Between tax years 2018 and 2025, the following are suspended, thanks to the Tax Cuts and Jobs Act of 2017:
How To Transfer Jobs At Your Company
Exception for members of the armed forces: members of the armed forces can still exclude eligible expenses from their income if they are on active duty, move to a permanent change of post in accordance with a military order and incident, and the expenses would otherwise qualify as a deduction.
Reimbursements for non-deductible moving expenses are a form of supplementary pay. Supplementary wages are allowances that employees receive in addition to their normal wages. Other forms of additional pay include commissions, overtime and arrears.
You can calculate federal income tax on supplemental pay using the supplemental tax rate of 22%. Or you can calculate federal income tax on the total of supplemental and regular pay if you pay them together.
Withholding taxes from relocation benefits can significantly reduce the resources available to the relocation worker. If you want the employee to receive the full amount of relocation assistance, you can round up the amount before tax.
Is It Okay To Ask For Relocation Assistance?
What is gross tax? Gross pay is when you increase an employee’s gross pay amount to account for taxes. Gross up gets the employee the itemized payment amount (e.g., $5,000 moving aid) even after taxes.
Let’s say you want to give an employee $5,000 in relocation assistance. The total tax rate applicable to the employee is 29.65% (22% supplemental pay rate + 6.2% Social Security + 1.45% Medicare tax). Subtract the decimal form of 29.65% from 1 (1 – 0.2965) to get 0.7035. Now divide the desired amount for moving assistance ($5,000) by 0.7035 ($5,000 / 0.7035). Your total is $7,107.32. To pay the employee $5,000 after taxes, the gross amount of relocation assistance must be $7,107.32.
Do you have an employee who meets the exemption for the armed forces? Did you pay eligible relocation allowances directly to the employee? If you answer yes to both questions, report the money in box 12 of Form W-2 with code P. This money is also non-taxable.
For more information on W-2 reporting for relocation assistance, see the IRS’s general instructions for forms W-2 and W-3.
Relocation Questions To Ask An Employer And Yourself Before Moving Abroad
Ready to set up a relocation utility? Your first task is to map out the terms of support.
You can include details of your package in a relocation assistance agreement and have the employee sign it. If you have a standard relocation package that you offer to existing employees, you can also include this in your employee handbook.
If you intend to give employees a standard lump sum, enter the amount here. Or if you plan to provide relocation allowance based on each employee’s specific costs, include a maximum allowance.
From bubble wrap to moving vans, there are countless costs involved in a move. But, you don’t have to pay for it
Here’s The Average Job Relocation Packages In 2023
Theirs. Define and detail the eligible expenses covered by your relocation assistance plan. For example, you can choose to pay only the costs of hiring movers.
Some employers add a redemption clause to their relocation assistance agreement. A payback clause states that the employee must pay back all or part of the payback (for example, a wait schedule) if he leaves the company for a certain amount of time.
For example, your payback clause may require an employee to pay back moving expenses if they leave before 18 months.
By adding a refund clause, you can offset the cost of relocating an employee who leaves your company earlier than expected.
How To Handle Employee Relocation Requests
When you add up the pre-tax relocation assistance bonus, don’t forget to run net to gross payroll. Again, you can simplify this process by using payroll software.
Decide whether you will provide support to new or existing employees. And decide if you’re going to provide assistance to someone moving across the state or just across the country.
Set up payroll for free and enjoy free expert support. Try our payroll software in a free, no-obligation 30-day trial. Getting a new job offer is exciting. But when taking that offer means moving to a new city or across the country (resulting in high moving costs and potential logistical headaches), it can dampen the mood a bit.
This is especially true if you’re not sure if your new employer will help you make the transition.
Transfer Request Letter And Email Examples
The good news is that as long as you have an offer on the table, you have enough leverage to request a relocation assistance package from your (prospective) employer.
Many companies are willing to help you, as long as what you’re asking is honest and you’re asking it the right way. But doing so requires some planning and forethought.
Here are step-by-step instructions on how to request relocation assistance in a way that your employer will be happy to provide.
Moving is very expensive. In fact, according to Allied Global’s Workplace Mobility Survey, it can cost up to $100,000 to relocate a single employee.
Important Questions To Ask Before Accepting A Job Abroad
However, a savvy employer also recognizes that once a talented employee is up to date, that individual will provide the company with a far greater return on investment in the long run than what is required from their temporary hire.
And since it often takes more than 6 months of training (half your annual salary) before you are productive and get that return, companies will spend a little money if necessary to shorten that time.
The best companies adopt this approach. According to Allied, companies that get new hires up to speed the fastest spend more than twice as much as others on their onboarding programs.
So if you have an offer, it means your prospective employer thinks you’re delivering the returns they’re looking for, and they’re most likely willing to lend a hand if it helps you be productive faster.
What Is A Relocation Company?
Many companies have a standard relocation assistance policy that explains what they will offer and how it works. So before asking anything, ask to see this policy – it will tell you what to expect.
If your company doesn’t have one or if you need help with something not specifically listed, read on to learn what to do.
You can often negotiate for help outside of a standard relocation policy, as long as it aligns with the goal of getting you up and running faster. Even things like compensation, breaking a lease or job search support for your partner are possible, as well as more standard things like hiring a moving company.
Here are many of the things that companies often provide moving assistance for, including some things you might not have thought to ask:
Things To Consider When Relocating For A Job Pages 1 20
A common problem people run into when asking for moving help is knowing what is fair to ask and what is not.
It’s good to be aware of this, but it’s also important to know that most people underestimate how difficult moving is and the costs involved.
Unexpected expenses and headaches will crop up all the time during a move. Since stress in your personal life prevents you from being productive in your professional life, it’s better not to ask for too much than too little.
Thinking about what’s fair
What To Ask If You Want To Relocate And Work Remotely
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