What Is a Relocation Fee and What Types of Expenses Are Included in a Relocation Package

If a role has a umzugsvergilch attached to it, or there is an expectation that you will

relocate for the position, it’s important to understand what that fee is before

accepting the job. It’s also important to know what types of expenses your employer

is willing to cover as part of a relocation package.

A relocation fee is a lump sum an employer offers to help employees pay for specific

moving expenses. This amount is at the company’s discretion and may be used to

cover costs such as: selling their old home; buying a new one; real estate agent

fees; legal and mortgage application fees; house hunting travel expenses; temporary

housing allowance; and more. It’s important to note that companies that offer a

relocation fee are typically offering taxable expenses, unlike the non-taxable cash

allowances that were common when they first started to use relocation packages.

It’s also worth noting that the type of expenses that are covered can differ between

employers and even within companies. For example, some employers use third-

party vendors to manage the entire process, whereas others might only cover

certain expenses such as house-hunting airfare. You can ask the HR department

about what type of expenses are offered and how they’re handled.

In addition to the standard expenses that are usually included in a relocation

package, companies are increasingly offering additional benefits for relocating

employees. For example, some companies will cover the cost of a spousal

employment search, while others will provide language and cultural assimilation

training for employees who are relocating to another country.

Ultimately, the types of expenses that your employer will be willing to cover for your

relocation will depend on how far you are moving and what kind of support you

require. As such, it’s worth taking some time to research industry competitor’s

relocation packages so that you can prepare yourself for the negotiation process

ahead of time.

The most common and well-known expenses included in a relocation package

include house-hunting airfare; temporary housing; home purchase assistance;

selling and buying a new home; home move and sale costs; shipping household

goods; and mortgage application fees. Other expenses, such as the cost of breaking

a lease early or paying to store household items that aren’t being moved, may also

be included. It’s important to remember that these expenses are usually taxable and

may be higher than the cash portion of a relocation package. If you’re concerned

about the tax implications of these expenses, it may be worthwhile to seek out

professional advice.