Learn the basic types of job relocation packages

Is your company relocating employees for the first time and needs to learn how to create job relocation packages?

Or are you an employee with a promising job opportunity that requires a move, but you don’t know what to expect in your work relocation package?

Navigating job relocation packages can be daunting for employers and employees. NRI Relocation is a professional relocation company with years of experience in job relocation assistance. Here, we’ll clearly break down what a job relocation package entails.

New job relocation assistance plays a pivotal role in employee compensation, benefits, and the decision to take a new role. We’ll explore the typical relocation expenses companies pay for in work relocation packages. We will also explain the different structures of job relocation packages.

Whether you’re an HR professional tasked with establishing a relocation policy from scratch or an employee trying to understand job relocation assistance, this guide is for you! Let’s dive into the basics of job relocation packages.

Job Relocation Expenses

There is no straightforward answer to which job relocation expenses a company will cover. The extent to which a company foots the job relocation services bill significantly varies. The company’s size, industry, budget, and organizational culture all impact corporate relocation spending. According to Zippia, 64% of people who moved for work received a job relocation packaged.

Some companies offer comprehensive job relocation packages that cover a wide range of expenses. Others provide a more limited budget that require employees to cover certain costs out-of-pocket.

Always Included Job Relocation Services

At a minimum, these are the job relocation expenses companies are expected to cover as part of a job relocation assistance:

Transportation & Travel

Compensation for transportation and travel expenses is a fundamental component of a job relocation package. Travel expenses include the cost of:

  • flights
  • car fuel
  • hotel accommodations
  • meals

    The company should cover the travel expenses to the move destination and trips before the move, such as home-finding trips or interviews.

    Transportation and travel benefits are not solely limited to the employee. The company should extend these benefits to the employee’s entire household.

    Understand the expenses a job relocation package covers

    Household Goods Moving

    Moving household goods is another critical component of job relocation packages. Job relocation assistance should cover the costs of relocating the employee’s belongings from their current residence to their new home.

    The extent of this coverage varies by the job relocation package level offered by the company.

    Higher-tier job relocation packages provide comprehensive moving services, allowing employees to move more belongings. Premium packages may also include higher-quality moving services, full-service professional packing and unpacking, and specialized moving services for valuable or delicate items.


    Tax Gross-Up

    Regardless of how relocation benefits are structured, their value is subject to taxation. Many companies incorporate a tax gross-up provision into their relocation packages to alleviate the financial impact on the relocating employee.

    NRI Relocation’s Corporate Relocation Tax Services

    A tax gross-up is essentially an additional financial allowance provided by the employer to cover the estimated taxes owed on the value of the relocation benefits. By including a gross-up, employers ensure employees are not burdened with unexpected tax liabilities.

    Often Included Job Relocation Services

    Companies commonly include these services in comprehensive job relocation packages. These relocation services are usually provided to management and executive-level employees. More comprehensive relocation support makes a new job or role offer more enticing and facilitates a smoother transition.

     Home Sales & Purchase Expenses

    The financial implications of buying and selling homes are significant, especially in competitive real estate markets. Companies often offer real estate services to assist employees with their corporate relocation.

    Home sale programs expedite a hassle-free sale of the employee’s current residence. These programs may cover closing costs, realtor fees, and home marketing expenses. These job relocation services alleviate the financial burden on the employee and create an easier transition.

    Similarly, home-finding services assist employees in the search for a suitable new residence. These real estate services include connecting employees with local real estate agents, housing market guidance, and valuable insights into desirable neighborhoods and communities.

    Some work relocation packages include real estate services.

    Rental Assistance & Lease Cancellation

    Many job relocation packages assist renters by providing Realtor services covering Realtor fees.

    If employees need to break their current lease due to the move, job relocation assistance may help with the fees for ending the lease early. This helps employees transition to their new location without extra financial stress.

    Temporary Housing

    Job relocation packages may include temporary housing for employees who need to start a new role or assignment before they move to their permanent home. Fully furnished corporate housing comes with all the basics, making transitions easier and more comfortable.

    Temporary housing is also handy for short-term relocations, like temporary assignments or training programs. This benefit gives employees a place to stay without the stress of finding housing.

    Types of Job Relocation Packages

    Understanding the types of job relocation packages is critical for both employers crafting a relocation policy and employees navigating the relocation process.

    A company’s relocation policy dictates the structure of job relocation packages. The policy may have different tiers based on factors like family size, seniority, and move distance, as well as the allocated budget and service inclusions. These job relocation package types determine how benefits are disbursed. Relocation benefits significantly impact employees’ overall experience.

    These are the four main types of job relocation packages and their implications for both employers and employees.

    Job Relocation Package Type 1: Full-Service Managed Corporate Relocation

    The full-service corporate relocation package is the most comprehensive and employee-friendly job relocation package available. In this option, the employer takes on the work and responsibility of managing all aspects of the relocation.

    The package includes the coordination of all relocation service providers, full guidance and support to the employee, and direct payment of all job relocation expenses. A human resources department will usually work with a corporate relocation company to facilitate these job relocation services.

    Full-Service is the best type of job relocation assistance because it minimizes the effort and expense required from the employee. The package offers a seamless transition that allows the employee to focus on their family and new role.

    Managed corporate relocation provides the fastest transition timeline and ensures consistent quality by using trusted service providers. This option also optimizes the company’s relocation budget by utilizing best practices, economies of scale, and benchmarking.

    Full-Service is the best type of job relocation package

    Overall, this comprehensive package provides a hassle-free and efficient relocation experience that prioritizes the relocating employee’s well-being and peace of mind.

     Job Relocation Package Type 2: Managed Corporate Relocation Services + Relocation Allowance

    A Managed Corporate Relocation Services + Relocation Allowance package combines relocation services for essential aspects like household goods moving with a relocation allowance provided as a lump sum. This hybrid approach aims to strike a balance between structured support and flexibility.

    By managing the core relocation services, the employer alleviates some of the employee’s relocation stress for the employee has confidence that the employee has the resources for a smooth transition.

    At the same time, the lump sum relocation allowance offers employees the flexibility to allocate funds based on their unique priorities and circumstances. For instance, employees can choose to prioritize services like pet relocation or focus on real estate fees if they have larger housing needs.

    Employees use miscellaneous allowance to pay for relocation expenses such as furnishing, pet transportation, travel, and more.

    However, this job relocation package option may not be as enticing as it includes fewer managed benefits and requires more move planning from the employee. If the relocation allowance portion of the package is too large, the company loses opportunities to optimize its relocation budget.

    Human resources departments usually rely on a corporate relocation company to facilitate this job relocation package type, and manage the relocation services.

     Job Relocation Package Type 3: Lump Sum Relocation Allowance or Bonus

    The lump sum relocation allowance or bonus package offers employees a fixed amount of money to cover their relocation expenses without the employer providing managed services. The lump sum amount is dictated by the relocation policy.

    While this job relocation package type requires the least amount of management from the company, it comes with inherent risks and challenges that can impact the relocation experience for both the employer and the employee.

    With no managed services in place, employees bear the responsibility of coordinating their relocation, which can be time-consuming and stressful. This lack of support may also be perceived as a lack of care from the employer, potentially affecting an offer acceptance or employee. Furthermore, without structured guidance, employees may be at risk of a negative move experience.

    From an employer’s perspective, this work relocation package type may result in a poor return on investment (ROI) for the relocation budget. Without the economies of scale or established relationships with service providers that come with managed relocation services, the lump sum allowance may not be utilized most effectively.

    Additionally, there’s no control over how employees allocate the allowance, whether they use the funds to optimize the relocation or simply pocket them, further diminishing the intended ease of transition the allowance is designed to provide.

    Job Relocation Package Type 4: Corporate Relocation Reimbursement

    In the corporate relocation reimbursement package, employers do not provide managed services, leaving employees responsible for planning and coordinating their entire relocation. Instead of receiving a lump sum allowance upfront, employees pay for relocation expenses and submit receipts for reimbursement, with caps set by the employer’s relocation policy.

    While this approach offers flexibility and ensures the allowance is used appropriately, it places a significant burden on employees to plan and execute their entire relocation, from sourcing vendors to managing logistics. Additionally, there is no control over the quality of the relocation process and the employee’s transition to the new job or location.

    From an employer’s perspective, budgeting for this job relocation package is challenging due to limited cost control and variability in reimbursement claims. The lack of predictability in expenses and potential quality inconsistencies make the corporate relocation reimbursement package a complex and risky option, complicating budgeting and financial planning efforts for both parties involved.

    certain moving expenses were tax-deductible prior to 2018

    Does Your Company Need Job Relocation Assistance?

    Navigating job relocation packages may be more complex than expected, but you don’t have to navigate this journey alone. NRI Relocation understands the challenges and nuances involved in crafting effective relocation policies and packages that cater to both employer and employee needs.

    Don’t let relocation hurdles prevent you from attracting and retaining top talent or keeping you from your dream job opportunity. Partner with NRI Relocation for expert guidance and personalized solutions that make relocation seamless and stress-free. Reach out now to get started!