Common Relocation Expenses and How Employers Help

Common Relocation Expenses and How Employers Help

Your search for the ideal candidate to fill a position in your company is over, and they are ready to start. However, they don’t live in your location, and they will need to relocate before starting the job. Your new employee may have to relocate from their state or city to come and work for you.

For this reason, you need to have an employee relocation plan to help offset the relocation expenses. Employee relocation allows organizations to move new hires, interns, or existing employees to a new location for work purposes. This gives the employer the freedom to outsource the best candidates from other cities and states, thus increasing the talent pool.  

Unfortunately, relocation comes with expenses. Read on below to understand the common relocation expenses and what employers can do to help offset these expenses:

What Is the Cost of Relocating?

Are you looking to relocate an employee from their current location to your office’s location? Relocating an employee who owns a home can be pretty expensive. The costs may run up to $71,000 and more.

However, relocating an employee who is renting a house is less expensive. The costs are often less than $24,000. Below are the main employee relocation expenses:

House Hunting Costs

The employee will need to look for a new place to live in your area. Ensure your budget for several trips before their moving date. The company should pay for travel expenses and accommodation during these trips.

Remember also to factor in allowances to cover other expenses such as food. House hunting in a new city or state can be pretty exhausting and stressful. Consider giving your employee some downtime during their house-hunting trips.

Real Estate Costs

If the employee lives in their own home, consider the fees for selling their old house and purchasing a new one. You will also incur leasing fees if they are renting. If your employee is looking to purchase a new house, use this checklist to help them find the right house.  

Travel Costs

On the final moving day, your new employee will need to travel with their whole family and pets. Expect to pay for the travel expenses, including their airfare and transport from the airport to their new accommodation.

Moving Costs

Moving costs is one of the significant relocation expenses. Your employee will need relocation assistance from a moving company. The company will pack up and transport the employee’s belongings to the new location.

Ensure your budget for moving costs. The costs depend on the content of their house and the distance the items have to travel.

Temporary Housing

When moving from one state or city to another, the house may not be ready for a few weeks. Thus, your employee will need short-term accommodation at a rental property or a hotel. Ensure you also budget for this and take into consideration the size of the family.

Relevant Documentation

Visas and work permits will be required if your worker is relocating overseas. You will also need to organize these documents if you bring in a new hire from a different country into the US.

What Should Be Included in the Employee Relocation Package?

Job relocation is costly and stressful for the employee. Thus, your company should provide the employee with everything they need during relocation. Below are essential things that you should include in the employee relocation package:

  • Packing services
  • Insurance coverage and moving company fees
  • Home-selling expenses
  • House-hunting trips and expenses during those trips
  • Temporary housing
  • Auto travel reimbursement
  • Temporary storage for employee belongings
  • School relocation assistance for the employee’s children

The company should cover all the expenses that may be included in the process of relocation. It should also consider the living situation of the employee primarily if they haven’t found a house yet. House hunting may take a while, especially if the employee has a family.

Types of Employee Relocation Packages

There are different kinds of employee relocation packages that organizations may utilize. This will help you better structure your relocation packages. Below are the types of relocation packages companies offer employees:


This relocation package gives the relocating employee a lump sum of money to help with the relocation process and moving expenses. The employee will be responsible for managing the money.

 They will use the money to hire a moving company, pay for insurance, and all other necessary expenses. The organization will determine the amount of money to give the relocating employee based on the approved budget.


A reimbursement relocation package dictates that the moving employee pays for all the relocation expenses. The employer gives them back a specified amount after they settle into the new city. 

This allows the company to cover almost all moving expenses incurred by the employee. However, the employee needs to keep all receipts related to the relocation to ensure they get reimbursed.

Third-Party Relocation

 This relocation package refers to when the organization hires a third-party company to help the employee find the right moving services, storage, and transportation options. Here, the organization does not have any direct involvement in the relocation process.

Direct Billing Package

This type of package is closely related to lump-sum and reimbursement relocation packages. The employer will directly bill all relocation aspects, including the moving services for their employee.

Expatriate Assistance

This package is specifically tailored for employees who are moving to a company in a different country. The organization will cover costs beyond relocation and moving. 

The company will help the employee and their family get work visas and pay for trips to find housing before relocation. It may also assist the employee with cultural assimilation after they have moved.

Now You Know How to Offset Employee Relocation Expenses

Relocating is not an easy process. Your employee will need to find a new house to live in, uproot their lives, and move to a new city. They will also need money for the moving process.

Understanding the above relocation expenses will help you better support your employee financially during relocation.

Did you like this article? Check out other posts on our website for more informative tips.