What is a relocation package? Examples & best practices

Published

Jun 12, 2025

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Companies of all sizes now face more competition than ever to attract top talent, and it’s not just about salary. Offering a comprehensive benefits package, including employee relocation support, can often make the difference between securing a great candidate and losing them to a competitor.

Relocation packages help employees handle the logistics, costs, and emotional hurdles of moving for a new job, making the whole process smoother. They’re also a decisive factor in a candidate’s decision-making process. Moving for a new job is a huge commitment, and a solid relocation package shows that your organization values the employee and appreciates their decision. For employers, relocation benefits not only attract top candidates but also facilitate faster integration and long-term retention.

In this guide, we outline what relocation packages commonly include, their associated costs, and how HR teams can design them effectively. You’ll also learn about the different package types, best practices, and the hidden costs that can impact your budget.

What does a typical relocation package include?

Relocation packages are a company benefit that supports employees when they move for work, helping ease the process and reduce the financial and emotional strain that accompanies these transitions. While packages vary by company and industry, a well-designed plan makes relocation as seamless and stress-free as possible. Larger organizations generally offer more comprehensive packages, while smaller companies typically provide more modest support. Regardless of company size, most relocation packages include the following elements:

Moving expenses

Most companies' relocation packages cover the cost of moving household goods from the employee’s old residence to the new one. Depending on the budget, this may involve hiring professional movers, renting a truck, or shipping belongings to the new location.

Temporary housing costs

You may need the employee to be in their new location before they've had a chance to find permanent housing. By covering their temporary housing costs, whether for a hotel, serviced apartment, or other accommodations, you give them time (usually 30 days) to secure a long-term place to live.

Travel expenses

Travel expenses cover costs like airfare, train tickets, or mileage reimbursement for the employee, and in some cases, their family, as they relocate.

Home sale or lease break assistance

Companies may help cover realtor fees, associated legal expenses, or penalties for early lease termination when an employee needs to relocate on short notice.

Spousal job support

If an employee has a spouse or partner, you can provide career counseling, resume services, or job placement assistance for them.

Packing and storage services

Many relocation packages include professional packing and temporary storage services to help with the transition, ensuring the employee’s belongings are safely handled and stored.

Miscellaneous allowances

Employers can cover a variety of miscellaneous expenses, including utility setup fees, furniture rental, cleaning fees, and other relocation-related costs to help the employee settle in.

Relocation bonus or lump sum

Instead of (or in addition to) itemized reimbursements, you can provide a lump sum payment for the employee to use at their discretion. Note that in many jurisdictions, this is considered taxable income.

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How much is the average relocation package worth?

An employee’s role, industry standards, and a company’s policies mainly determine the value of a relocation package. Here’s a general breakdown:

Entry-level employees: Junior employees typically receive modest support, usually ranging from $5,000 to $15,000, often in the form of a lump sum or limited reimbursements.
Mid-level professionals: Can expect packages ranging from $10,000 to as high as $25,000. In some cases, the package includes a mix of reimbursed expenses and partial lump sum support.
Executives: Often receive comprehensive packages, starting around $25,000 and sometimes exceeding $50,000 or even $100,000 for C-suite executives. These packages can include additional coverage, including home sale assistance, premium temporary housing, and extensive family support.

Some companies offer employees the choice between a lump sum payment and itemized reimbursements. Lump sums provide employees with more flexibility, but they must manage their spending wisely. Reimbursements, on the other hand, involve more paperwork but ensure that eligible relocation expenses are covered.

The final amount depends on factors like the distance between locations, the cost of living in the new area, and the size of the employee’s family. Whether the employee rents or owns a home also plays a role in how much support the company needs to include in a relocation package.

Hidden and additional relocation costs to consider

Typical relocation packages cover many costs, but hidden moving expenses often catch employers and employees off guard. Knowing about these in advance helps prevent surprises.

Storage fees for personal belongings

Short-term storage fees are usually included in the average relocation package, but that may not be enough. If there’s a significant or unexpected delay between move-out and move-in, these costs can add up quickly.

School enrollment fees for children

Private or international schools sometimes charge enrollment or application fees that standard relocation benefits may not cover.

Licensing and testing fees for professionals moving states or countries

Professionals working in healthcare, law, or education often have to obtain new licenses or certifications in their new location, which may require paying additional fees.

Pet transportation costs

Moving pets, especially across national borders, can be costly and may require special arrangements, including quarantine, vaccinations, and health certifications.

Gross-up for relocation expenses

A gross-up is an additional cost where an employer adds extra money to a relocation payment to cover the employee’s tax liability. This increases the total amount paid, so the employee receives the intended benefit after taxes.

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Types of relocation packages

Most organizations use one or more of the following structures to manage the relocation process:

Lump sum

A lump sum package provides employees with a fixed amount of money to cover their relocation expenses. The employee decides how they use the funds, whether for hiring movers, temporary housing, or other relocation-related costs. Lump sum structures are easy for employers to administer; however, responsibility for planning, budgeting, and managing the move shifts to the employee. In the US, lump sum payments are usually considered taxable income, although employers can gross-up the payment to cover any taxes owed.

Reimbursement

Reimbursement relocation packages require employees to cover relocation expenses upfront and then submit receipts to the employer for repayment. By using this method, you can control relocation costs by repaying only approved expenses. However, using this method can result in cash flow problems for employees who must cover upfront costs. In many cases, reimbursement is used to cover specific expenses, such as travel, temporary living arrangements, or storage.

Third-party relocation service

Some organizations engage a third-party relocation service to manage the entire moving process for the employee. The service coordinates packing, moving, temporary housing, and in some cases, real estate assistance. Outsourcing relocation to an outside company reduces the burden on both the employee and the employer.

Direct billing to vendors

With direct billing, your organization contracts with moving companies, housing providers, and other vendors for relocation services and handles all the payments. In this scenario, the employee doesn’t pay anything upfront. They simply get the relocation support they need. This structure offers convenience for employees and helps employers negotiate better rates through bulk purchasing of services. Direct billing may be used in conjunction with other types of relocation packages.

Tiered packages based on seniority

Some companies offer different tiers of relocation assistance depending on the employee’s seniority. You might offer entry-level employees a basic lump sum or limited reimbursement option, while offering senior executives a more comprehensive package including premium benefits and higher limits. These kinds of packages help you align relocation costs with the employee’s role.

Expatriation packages

Companies use expatriation packages when an employee relocates internationally. In addition to covering the standard relocation expenses, these packages offer additional benefits, including securing work and residency visas, paid trips to scout out a new city, and even cross-cultural and language training.

Best practices for offering a relocation package

Managing employee moves and relocation packages can be overwhelming, especially if your organization handles a large volume of domestic and global transfers. However, following these guidelines can make the entire process smoother and easier on both you and your employees.

1. Start with a clear relocation policy

There’s no sense in reinventing the wheel every time you manage an employee relocation. The first step is to develop an employee relocation policy. These are structured frameworks that outline your organization’s strategy for relocating employees. It should outline eligibility, covered expenses, reimbursement limits, and the process employees must follow. Clear communication enables HR teams to set the right expectations and prevent misunderstandings down the road.

2. Customize packages based on employee needs

Not every employee’s situation is the same, and offering personalized relocation packages can greatly enhance their experience. Consider factors like family size, distance, and special requirements. Offering flexible options, such as lump sum payments, tiered packages, or personalized assistance, ensures that relocating employees are supported throughout their move.

3. Include tax implications and assistance

Some reimbursement packages are considered taxable income, so be sure to outline any tax liabilities to the employee. Consider offering assistance in the form of a gross-up (including the tax liability in the relocation package). Consulting with legal and tax professionals can help you avoid potential liabilities and ensure a legally compliant relocation process.

4. Use relocation management companies (RMCs) wisely

Relocation management companies are professional solutions that help businesses manage employee relocation. RMCs provide an array of services, including logistics, temporary housing, and immigration compliance. While these companies reduce your administrative burdens, it’s essential to select the right partner and clearly define the scope of services. Review the relationship regularly to ensure it aligns with your organization's needs and budget.

5. Communicate the offer transparently

Clearly explain the relocation package, including what’s covered, what’s not, and any deadlines or requirements. Regular updates and dedicated support channels can help employees navigate their move with confidence and ease. Providing a dedicated point of contact can help prevent misunderstandings and resolve problems more efficiently.

6. Track relocation costs and ROI

Keep an eye on all relocation expenses and assess their impact. By tracking costs and measuring ROI, you can justify your relocation program, spot inefficiencies, and make data-driven decisions for future employee relocations.

7. Ensure legal compliance for cross-state/international moves

Relocating employees across state lines or internationally involves complex legal considerations, including specific visa requirements, professional licensing and certification standards, and labor laws. Work with your legal and HR teams to ensure compliance with local and international regulations, and stay up-to-date with relevant laws, immigration requirements, and tax regulations to prevent costly mistakes.

8. Partner with a global HR provider

For companies with a worldwide footprint, partnering with a global HR provider, like Rippling, can simplify cross-border relocations. These partners offer expertise in local laws, cultural integration, and logistical support, making international moves smoother and more efficient.

You can also explore alternative solutions such as Employer of Record (EOR) and Professional Employer Organization (PEO) services. These solutions offer a flexible and compliant approach to hiring internationally and managing remote workers.

9. Centralize relocation workflows

Using digital tools and platforms can help you simplify employee relocations by centralizing workflows and automating tasks such as document management, expense tracking, and communication. Cloud-based relocation management systems help HR teams stay organized and provide relocating employees with easy access to critical information. This approach reduces errors, speeds up response times, and provides better visibility into the relocation process.

10. Provide ongoing support post-move

The relocation process doesn’t end when the employee arrives at their new location. Relocated employees can experience significant stress during their transition. Support for their mental and physical well-being, such as access to counseling services, cultural training, or family support programs, can help your talent adjust and thrive in their new environment.

How Rippling can simplify employee relocation

Rippling is an all-in-one solution that streamlines the entire employee lifecycle, with seamless employee onboarding, payroll, benefits, and location-based compliance, ensuring that employees are supported every step of the way.

With Rippling’s Global HRIS, integrated payroll, and automated workflows, HR teams can easily manage employee relocation while ensuring compliance and consistency.

Rippling’s benefits administration software ensures employees maintain coverage during transitions, while built-in tools support policy enforcement, helping you stay aligned with local requirements and internal standards.

Unlike other solutions that require multiple integrations, Rippling’s unified platform provides a comprehensive approach to managing teams, no matter where they are or where they’re going.

Relocation package FAQs

How does relocation assistance work?

Relocation assistance helps support employees who are relocating for a new job, whether they're new hires or transferring within the company. A relocation package, sometimes called a job relocation package, typically includes financial assistance to cover moving costs, such as hiring professional movers or a moving company, packing and unpacking services, and travel expenses.

In many cases, the employer will either directly pay for these moving services or reimburse the employee after the move. Whether you're opening a new office, transferring staff, or bringing in talent from out of town, offering relocation assistance ensures a smoother transition and demonstrates that your company values its people.

How much should employees be paid for relocation?

Relocation costs can vary widely based on several factors, including whether the employee is a renter or homeowner, the distance of the move, family size, and the position level. On average, moving expenses can range from $5,000 all the way up to $100,000 and beyond, to cover moving services, temporary housing, travel costs, and other related expenses.

What is a good lump sum relocation package?

Many organizations offer lump sum relocation packages because they’re flexible and easy to administer. A good lump sum relocation package is dependent on the employee’s situation and role. Often, this is a negotiated amount. If the relocation is local, $5,000 to $10,000 may be fair compensation. For executives and larger moves, consider budgets of $20,000 to $80,000 and above.

Is a relocation bonus taxable?

Yes, in most cases, a relocation bonus is taxable. It is treated as taxable income and subject to federal, state, and payroll taxes, just like regular wages or bonuses. You may have to include additional compensation (a gross-up) to cover any tax obligations that the employee is responsible for.

What’s the difference between a relocation allowance and reimbursement?

A relocation allowance (also called a lump sum or bonus) is a fixed amount paid upfront to help cover moving expenses. Employees manage how to spend it and may keep any leftover funds. But if the money runs out, they’re still responsible for any unpaid relocation expenses.

A relocation reimbursement occurs when employees cover their relocation costs and are subsequently repaid by the employer for eligible expenses, typically after submitting receipts.

Both are usually taxable as income unless specifically excluded by local tax regulations.

What should employers consider when offering a relocation package with a job offer?

When extending a job offer that requires a candidate to move to a new city or new location, it’s important to proactively outline the relocation package. Consider covering the cost of moving, including airfare, moving costs, temporary renting expenses, and potential lease break fees.

Be clear about which expenses you’ll pay directly and which you’ll reimburse. Candidates often appreciate support with securing a lease or taking travel days for home-finding trips. Offering a comprehensive package makes relocating less stressful, while also helping you successfully hire top talent.

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