The Wheaton Blog
What You Need to Know About Job Relocation Packages
According to 2015-2016 Census Bureau statistics, about 11 percent of Americans move in any given year — that’s approximately 35.1 million people. Among these millions of people, transferring to a new location or taking a new job is the third most common reason to relocate. People moving because of job relocation account for 10.8 percent of all moves.
Often, you have the option to negotiate for a job relocation package to cover a portion of the expenses incurred during this move type. In fact, Fox Business reports that about 70 percent of American businesses include the possibility of employer-paid moving costs as an incentive for transferring employees and new hires.
Below are questions you might ask as you consider the prospect of moving for work with the assistance of a relocation package.
Who Qualifies for Job Relocation Packages?
Not every job offer that requires a move qualifies for a job relocation package. Additionally, while the majority of employers have moving incentives available, not all HR departments include this information written in their job offers and not all employees are candidates for these incentives.
You may qualify for a job relocation package when your situation:
- Includes you holding and adequately performing the new job for a set period during the first year after your move, typically around nine months
- Involves moving expenses within one year of you taking the position, including retroactive coverage in some cases
- Meets work hour standards, usually 30 hour or more work weeks
- Necessitates a move in order for you to accept your new position
- Requires a move over a specified distance, typically over 50 miles plus the distance of your current commute
If your job offer does not include the details of a job relocation package, ask HR about current company policies. You should also raise these questions if you aren’t sure whether or not you qualify for employer-paid moving expenses when you are deciding if you will accept a different position.
What Does the Typical Package Include?
While many employers offer job relocation packages, the expenses covered and the amount offered varies according to company policies, position seniority, and move circumstances. For example, senior employees are routinely offered more desirable and comprehensive packages than other employees.
Basic relocation packages typically include:
- Moving, storing, and transporting your belongings
- Some housing costs, such as house hunting trip budgets
- Utility coverage to assist with service end and start fees
When your employer is willing to take your circumstances into account, you may receive allocated funds for other moving expenses. These personalized packages can include provisions for:
- Buying out your current home through a guaranteed buyout program (GBO)
- Covering costs related to your children’s education, spouse’s job hunting, and other family expenses
- Packing and unpacking through a service
- Paying for lodging or temporary housing
- Putting in a down payment and covering closing costs on a property
- Selling property at a loss
- Shipping personal vehicles
- Taking training courses necessary for new job responsibilities
- Transporting pets
- Traveling by road between your current and new homes
If you need or want these considerations to be part of your final relocation package, you may need to negotiate the terms of the agreement.
What Should You Do When Negotiating a Package?
Just as you may negotiate your salary and benefits when discussing a transfer or new hire offer, you have the right to discuss your needs when it comes to your employer-paid moving expenses. Schedule a specific meeting for this negotiation, preferably in person.
Take steps to prepare for the meeting in advance. Request a moving estimate, make a list of projected other expenses, and research the cost of living in the area you’re moving to.
Once you come to an agreement, have the terms put down in writing.
How Does the Financial Aspect of Relocation Packages Work?
Relocation packages may be paid out differently, again depending on company policy and how you will need to use the funds. Financial options are usually:
- Direct billing where your company contracts moving professionals on your behalf
- Lump sum arrangement where you can budget the total coverage as necessary
- Reimbursement arrangement where your report your moving expenses after you pay them
- Third-party billing where your employer outsources your moving needs to unaffiliated professionals that you may choose
Research whether or not your type of job relocation package is tax deductible and how to report this amount on your return. You can learn more about how tax law applies to employer-paid moving expenses in our previous blog, “How Tax Cuts and Job Act Affects Moving-Related Tax Deductions.”
When it comes to moves, especially moves fully or partially covered under job relocation packages, no two situations are exactly 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.
As you approach the complex prospect of relocating for work, partner with the experienced national network of moving agents at Wheaton World Wide Moving to simplify the process.