Companies offer relocation packages to entice employees to move.
A relocation package should include everything you need to move comfortably.
Cost of living changes and state taxes affect relocation assistance.
You can negotiate and customize your relocation package.
You’ve worked hard, and your efforts have paid off! Now, your company has asked you to move and offered you a relocation package. If you’re not familiar with a company move, the details can be a bit overwhelming, but this relocation guide will help you learn the ins and outs of relocating for work.
Is Relocating the Right Decision?
This is a personal decision that only you can make with your family, as there are many factors at play unique to your situation. First and foremost, do you want to move? Is remote work an option, thus forgoing the entire process? Are the logistics of moving and any related costs too exorbitant? Before making any final decision, talk with your employer about relocation incentives and any other perks to keep you and your family happy with the move.
How Does Relocation Affect Your Family?
Moving is a big deal, particularly when relocating across the country or to another nation entirely. First of all, talk with your family to discuss any hesitations and outline the benefits of going ahead with the move, such as an increase in salary. Next, take the time to research, and even visit, the relocation site. Keep a few things in mind as you do so.
Look for opportunities for your partner - Resentment eventually forms if your partner sacrifices their career for yours. Look into any cool opportunities in the new city or area and make a list for them to peruse.
Check out the schools - Education is one of the most important aspects of raising children. Thoroughly research the area’s school system to make it is up to snuff, and pay attention to the part of the city you are likely to live in. While you are at it, check if there are plenty of kid-friendly activities to engage in near your new office.
Find fun stuff to do nearby - An easy way to convince your kids to embrace a move is to focus on the fun aspects of relocating. Is there a neat water park nearby, or nifty hiking trails? This isn’t bribery, per se, but children do react positively to the promise of fun.
Consider extended family - Will the move pull you away from extended family like grandparents, aunts, and uncles? On the other hand, will you be closer to them after moving? These are all things worth considering.
Does Relocating Help Your Career?
This is the big one, right? Relocating for a career is, well, for your career, so make sure the move acts as a big-time job boost. Consider the following career-related notions before finalizing plans to relocate.
Salary and cost of living - Research the cost of living in the relocation city and match it to your salary. Will the move make things harder, financially, or easier? Re-negotiate your salary with higher-ups if you are moving from a relatively inexpensive area to a big city with massive property values.
Advancement opportunities - Make sure relocating offers you plenty of opportunities for career advancement, even if the salary gets a boost. Look for educational initiatives that help to increase your skill levels and talk to your hiring manager about possible future raises and promotions.
Office culture - While visiting the area to look at schools and such, stop in at your future office to suss out the vibe. Office cultures vary wildly, even within the same company. Talk to colleagues to gauge their enthusiasm level for the office and. If you are starting with a new company, conduct thorough research on Glassdoor and related sites.
What to Expect in a Work Relocation Package
After your employer has approached you with the chance to move and you’ve decided to consider the option, they’ll probably sweeten the deal by offering a job relocation package. Depending on the company, your relocation package could contain any number of items, including the payment for a full-service move, temporary housing, and pre-move visits. Relocation packages are customizable, and you should negotiate with your employer for the best outcome.
Moving Coordination and Expenses
There’s a wide range of possibilities when negotiating moving expenses. For example, your employer might offer a full-service move that includes hiring a local moving company that manages everything from packing your belongings at your old address, driving it cross-country, and unpacking at your new home. Or, they could reimburse you for moving expenses like packing materials, a rental truck, and lodging. It’s possible that they also offer moving assistance like:
Fees for breaking a lease
New rental home fees
New home closing costs
Real estate agent commission
Moving across the country costs anywhere from $4,000 to $11,000 or more, depending on how much stuff you are transporting. In others words, this is not chump change, particularly when buying a new home is involved. Luckily, employer-based relocation packages tend to cover a sizable chunk of these costs to maintain employee retention rates.
The details differ from company to company, however, with some offering a large chunk of money upfront and others requiring receipts for future reimbursements. According to a study conducted by Worldwide ERC, a relocation services trade group, employers spend $21,300 to $25,000 to relocate renters and $62,000 to $80,000 to relocate homeowners.
It's one thing to think you can be happy living in a new community; it’s another to move there and thrive. Most employers will pay for you and possibly your family to travel to your new city once or twice before moving. Ultimately, they want you to be content and productive. It's less expensive to send you on a couple of trial visits before officially moving and later deciding the city isn’t a good fit.
Here are some things to look for during those crucial pre-move visits.
Quality of life: Check out local eateries, nearby recreation options, grocery stores, and every other aspect that makes up daily life.
Traffic checks: Perform a sample commute from the approximate location of your new home to the office. Is the traffic abysmal and will it impact your mental health or work productivity? Also, look into how bike and pedestrian-friendly the area is.
Schools: If you have kids, reach out to nearby schools and inform the staff that you are moving to the area and want to check things out. See if you can take a tour.
Experience the weather: The weather is a deal-breaker for some, particularly when moving to humid parts of the country like Florida or rain-soaked locations such as Seattle.
Although moving your home is likely the largest expense of a relocation package, most employers also foot the bill for travel expenses such as a rental car, airfare, dining, and lodging.
You might not find the perfect house to buy or rent before your first day at your new job. So, it's common for relocation packages to cover fees for temporary housing either in a hotel or in a rental home, including utilities.
Employment Assistance for Your Spouse
There’s a good chance your spouse has an opinion about your relocation. Employers know that getting the whole family on board with the move is beneficial for everyone, so they could offer your spouse job search assistance or help you find new schools for your kids.
There are many more details to consider for an international move beyond choosing a moving company, including how much you’ll have to pay out of pocket to adjust to your new country. An international relocation package should address any cost of living increases and many of the travel fees you’ll pay, including the following.
Property management (if you don’t sell your home)
Cultural training and immersion programs
It costs $20,000 on average to move from the United States to another country, but the total cost can range between $7,000 to $35,000
Run the Relocation Numbers
Each company’s relocation policies are different, so it’s important to research financial implications, like the local cost of living and tax laws, to prepare for their offer ahead of time. Some companies present a set amount of money to move; others expect you to show estimates and set clear expectations for what you’ll need for a successful move.
Cost of Living
If the area you’re considering is unfamiliar, it's time to conduct some research and learn about its economics, so you’ll know how to budget and potentially negotiate your relocation package. Try running your numbers through an online cost of living calculator to get a ballpark idea of what to expect.
Tax Laws and Regulations
Income tax laws vary from state to state and could affect your relocation package’s bottom line. Some states like Florida and Texas don’t have income taxes, and other states have high state tax rates. If your job requires licensing, you’ll also need to account for any professional fees for new or updated licensure, possibly including a new state driver’s license. Don’t forget, under the federal Tax Cuts and Jobs Act of 2017, moving expenses aren’t tax-deductible unless you’re serving in the active-duty military.
Prepare to Negotiate Your Relocation Package
Relocation packages aren’t one size fits all. Instead, you should talk with your employer about the services you feel are most important for a successful move and then consider negotiating to get your top priorities. For example, if your family needs a full-service moving company to help manage the stress of leaving their home, you could offer to start your new job sooner.
You could also negotiate:
A moving reimbursement or a lump sum payment: Both options here have advantages and disadvantages. Getting a lump sum upfront simplifies the entire process, but the sum may not cover the entire move. On the other hand, reimbursement checks come only after you spend your own money, despite allowing for a more exact figure.
Additional pre-move visits: It takes more than one visit to truly get a feel for a place, so negotiate with your employers so they pay for more than just one trip. If you have the option for multiple visits, you can relax a bit knowing that you don’t have to do everything in one go.
More time to move in before your start date: Moving is hard and time-consuming and there is always just one more, or 20 more, things to do. Negotiate for more time to settle in before officially starting work. Use this time to finish moving, sign kids up for school, experience local eateries, decorate your new home, and more.
A higher salary instead of a substantial relocation package: Best case scenario? You get both. If just one is on the table, however, think about going for a higher salary. After a few years, the higher salary will pay for your moving costs and your resume will have a higher baseline salary for future opportunities.
New job and location trial period: You may move and decide you absolutely hate the new area or even the new job. Make sure to negotiate a punishment-free trial period for both the new position and new location.