calculating employee relocation costs with phone

Which Relocation Expenses Should I Cover for Employees?

Posted April 3, 2017 by Kristin Hoppe in Running a Business 101
Employee relocation packages can get expensive for companies — but they also help recruit talent. Learn more about relocation assistance options.

You’ve found the perfect candidate. She has all the necessary experience, a stunning portfolio, and her values align well with your company culture. There’s just one snag — she lives in a different state. Or, perhaps, even a different country altogether.

And here enters the dilemma: If your company is competing for the best talent out there, how far should you go to snag someone who would require relocation?

According to a study by Aires, 94% of companies provide some sort of relocation assistance for employees who purchase a home in their new destination. Even providing partially for relocation expenses has its benefits. In doing so, you may pull from a more competitive pool of talent, or provide the basis for a more diverse pool of applicants.

We’ve broken down a few relocation package options, so you can decide what’s best for your company.

Relocation Package Options

Pay a Flat Rate

Some companies decide to offer a flat rate when employees request relocation assistance. In fact, 13% of organizations place a cap on the cost of relocation. This makes sense — your company will be able to predict and control relocation expenses upfront.

If your company goes this route, the lump sum might come as part of the job offer. In this case, whichever number is decided on would cover whatever array of moving expenses, from storage to moving vans, the employee decided to put it towards.

Pay Per Item

According to CapRelo, a standard relocation package may include the following features:

  • Full packing and unpacking services
  • Moving company service with insurance coverage
  • Home sale or lease-breaking penalty assistance
  • A house-hunting trip
  • Temporary housing
  • Transportation to the final destination
  • Miscellaneous moving expenses

In this case, your company can mix and match features to find a relocation offering that works best, such as pack and unpack services and temporary housing. Whichever you decide, make clear what is included to the employee in the job offer, so there isn’t any confusion.

Pay the End Expense

If you’re having a hard time predicting total costs, or want to fully cover your employee’s move, your company may opt to pay for all end expenses with the proper reimbursement receipts.

However, doing so might run the risk of expenses reaching far past what you expected, which could cause some tension between you and your new employee. If you do decide to go this route, consider setting expectations in writing — including upwards limits of relocation expenses and clearly defined accounts of what is covered and what isn’t — that your company is willing to pay.

Learn how to hire and manage employees in a new state.

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...Or Just Go Remote Instead

If the costs of relocating an employee sound like too much of a headache, consider whether your new employee could do her job well remotely. According to a survey conducted by Justworks and SquareFoot, 60% of employees believe remote work has a positive impact on their teams.

Whether a remote employee fits your team’s needs depends on a variety of factors, like whether all of her work will be done on a computer, or if she’ll be in a management position.

If you do decide to take the path of a distributed team, these articles might be of help:


Whether you decide to offer your new employee a comprehensive relocation package, just decide to reimburse some expenses, or go remote entirely, Justworks is here to help. Justworks is a payroll and HR company, and we can help you administer payroll and payroll taxes in different states — along with giving access to high-quality benefits. You can learn more about us here.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.