What should an employee relocation package include?

Relocating to a new country is an exciting yet daunting experience, especially when it comes to navigating the logistics of your move. For foreign professionals relocating to the United States for work, one crucial aspect to consider is the relocation package offered by your employer. 

A “relocation package” is a set of money, benefits, and/or support commonly offered by employers to ensure a smooth move for their relocating employees.

In this article, we will explore what you can typically expect from an employer relocation package in the U.S., including compensation, services, and other perks, along with how—and when—to negotiate with your employer.

What’s included in relocation packages:

Relocation packages are commonly offered by companies who are relocating employees from abroad, but different employers offer a different mix of compensation, services, and other perks.

Here’s an overview of some of the most common things included in a relocation package to the U.S.

Moving costs:

Most relocation packages will cover the costs of moving you and your personal belongings from your current location to the new one. 

In addition to covering transportation costs like flights or rental cars, this often involves hiring a moving company or a professional relocation service to handle the logistics of packing, shipping, and unpacking your belongings in your new home. 

Companies may also include a variety of other miscellaneous expenses, such as:

• Costs of storing personal property before moving into a permanent new home

• Cleaning services at the new home

• Internet installation, utility hook-ups, and other moving-related expenses.

Temporary housing:

It is also very common for employers to offer relocating employees temporary housing, either through a corporate apartment, an AirBnb allowance, or some other temporary arrangement. 

Standard policies across industries typically include at least 2-4 weeks of temporary housing. However, this time period is often one of the easier items to negotiate, since companies typically have open inventory or can provide significantly discounted rates on short-term housing options. 

Home sale or lease-breaking penalty assistance:

Employers may provide marketing and sales support to sell your home or reimburse you for money lost on a quick sale, especially if you are relocating on a tight timeline. If you are renting, employers may even pay contractual penalties for early lease terminations.

Other relocation services:

Companies will often connect relocating employees to their preferred third-party “relocation service providers”, which are organizations that specialize in helping people and families transition to a new location smoothly.

These organizations can assist with tasks such as:

• Finding longer-term local housing

• Choosing a new bank account, phone plan, credit card, and other essential products

• Helping an employee’s spouse find a new job through employment assistance programs

• Familiarizing you with other local amenities in the community 

For those moving from international locations, a relocation service provider or other third-party agency will commonly help with other items to ensure a smooth international move, such as:

• Visa and immigration support for both the employee and their family members

• Language and cultural training to get assimilated to the new country

• Support in selecting schools for employee’s children

Types of relocation packages

Relocation packages are typically offered as a “lump sum”, a reimbursement of expenses, or some combination of the two.

Lump sum

With a “lump sum” type of relocation package, often called a “relocation bonus”, your company will grant you a sum of money to use as you see fit in your move. They may or may not connect you with preferred moving companies, housing options, and relocation service providers, but ultimately you choose how and when you spend the money.

Note that “lump sum” relocation packages are treated as taxable income. Thus, employees will typically have taxes withheld from the bonus before receiving their net amount to spend. For instance, if the agreed-upon relocation package is $4,000, but expected income taxes (Federal, State, and FICA) is 30%, then $1,200 will be removed and the employee will only receive $2,800.

Some employers will do a “gross-up” on the relocation package amount in order to cover any expected income taxes. If you are offered a “lump sum” amount, make sure to see if this is an option when you are negotiating with your employer.

Reimbursement or Direct billing

In other cases, an employer will let their employee reimburse relocation expenses such as flights, moving fees, lodging, and more—or even bill these expenses directly to a company card. This reimbursement policy may come with certain stipulations, though, such as the specific service providers they can use or the amount of money that can be expensed. 

In some cases, you can negotiate some combination of these two approaches. For instance, you can reimburse flights and directly bill a moving company with your corporate card, but use a remaining “lump sum” of money to spend (or save) on things outside of a tightly defined reimbursement policy.

Negotiating your package:

If you believe that certain aspects of the relocation package are inadequate or missing, you have the right to negotiate with your employer. 

Like any other negotiations with your offer, this is best done after you have received your offer, but before you have accepted it.

Before entering into negotiations, it is important to conduct thorough research to understand the standard practices and benefits offered in your industry, seniority level, and region.

You can do this through a variety of channels, including:

• Contacting your company’s HR department about any documentation they have on relocation policies or benefits

• Discussing with peers at your company or similar companies in your industry

• Conducting online research on forums and websites like Quora and GlassDoor

• Consulting your recruiting firm, if you used one to connect with this opportunity

During negotiations, be clear about your must-haves and nice-to-haves, given your current personal and financial circumstances, and tailor your negotiations accordingly. For instance, if you are single and do not have many belongings, you may try to negotiate a higher “lump sum” amount with a “gross-up” in lieu of getting shipping and moving expenses reimbursed. Or if you have flexibility with your start date in the new location, see if you can get fully-covered corporate housing for longer than their standard offering for relocating employees.

Throughout these discussions, make sure to highlight the potential benefits that your employer may gain from meeting your requests, such as improved productivity or a quicker start time if move logistics and expenses are covered. 

The Takeaway

Relocating to a new city can be a stressful and expensive process, but a well-negotiated relocation package is a great way to ease some of those anxieties and costs.

At Nova Credit, we recognize that this relocation process gets even more complicated when moving to the U.S. from another country.

To address this, we developed the U.S. Arrival Map to compile 200+ companies, services, and resources to help with every step of your move—from finding immigration attorneys and shipping belongings to getting started with personal finance and finding local communities. If your company does not connect you with preferred relocation service providers, the “Relocation” tab of this directory is a great place to start.

Once you’ve moved, you may be able to use Nova Credit to use your foreign credit history from certain countries to apply for great credit cards, phone plans, and more products using your hard-earned credit history from back home—rather than needing to start from scratch as you build a U.S. credit history. 

Currently, Nova Credit serves individuals coming from Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, the Philippines, South Korea, Spain, Switzerland, and the U.K.

More from Nova Credit:

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Credit Cards to Build Credit

How to Pick a Cell Phone Plan in the U.S.

How to Choose a Bank Account in the U.S.

How to use your foreign credit history to get credit in the U.S