Moving for a job used to be routine. Now it's an expensive, negotiated part of the hire itself, and the difference between a well-structured relocation package and an improvised one shows up in whether the hire accepts the offer, when they start, and whether they stay past year two. Most companies under-invest in the mechanics of relocation and over-invest in the dollar amount, which produces packages that look generous but leave the employee stuck on moving logistics, temporary housing, or spousal career disruption. A good package solves problems the employee doesn't want to solve alone.
What a Relocation Assistance Package Usually Covers The core services fall into four buckets. Physical move costs, which include packing, transportation, storage, and insurance for household goods. Housing transition, which covers temporary housing during the move and sometimes home-sale support or lease-break costs. Travel for the employee and family during the move itself. And settling-in services like school searches, spousal career support, and area orientation.
Lump-sum packages hand the employee a set dollar amount and let them manage the move themselves. Full-service packages route everything through a relocation management company. Most companies mix both depending on role level.
How Tax Treatment Changed After 2017 Before the 2017 Tax Cuts and Jobs Act, qualified moving expense reimbursements were excluded from the employee's taxable income. That exclusion ended for moves through 2025, and the current rules carry into 2026: almost all employer-paid moving costs are taxable income to the employee.
The practical effect is that the headline relocation budget understates the real cost. A $30,000 relocation costs the employee roughly $9,000 in additional taxes (at a 30% combined rate) unless the employer grosses up the benefit. Gross-ups restore the intended value and add roughly 45% to the gross package cost.
What About Active-Duty Military Moves? The old tax exclusion survives for active-duty military members moving pursuant to military orders, which is the only remaining exception in the current code.
How to Structure a Package That Fits the Role Match the package to role level and distance. Local moves (within 50 miles) usually don't need a formal package; a lump sum of $5,000 to $10,000 covers most practical costs. Regional or cross-country moves for mid-level hires typically range from $15,000 to $40,000 in direct costs plus gross-up. Executive and international relocations often exceed $100,000 when full-service support, home-sale assistance, and gross-up are included.
Add a repayment clause. Most packages include a one-year or two-year repayment schedule if the employee leaves voluntarily within that window. Prorated repayment (100% in year one, 50% in year two, then none) balances protection for the employer with fairness to the employee.
Running a Relocation Program That Actually Retains the New Hire The program mechanics matter as much as the dollar amount. Assign a single point of contact (an internal mobility specialist or an external relocation management company) who owns the employee's experience start to finish. Build the package into the offer letter in plain language so the candidate knows what's included before they decide.
Support doesn't end at the truck unloading. Pair relocation with onboarding so the new hire's first weeks feel structured and welcoming, not dropped. Reference the IRS Publication 521 moving expense rules when setting up payroll imputation, and coordinate with compensation , employee benefits , and base salary discussions so the full package is visible in total-comp conversations. A relocation package that solves the move and the landing lands the hire.
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