CapRelo Blog

What Is a Typical Domestic Relocation Package?

Posted by Amy Mergler on Fri, Nov 04, 2016

question-mark-box-2.jpgA strong relocation package will help attract and retain top talent. But what is a typical domestic relocation package?

For more information on what to include in a relocation package, download our free guide.

A typical relocation package will usually include the following features:

  • Packing, transporting and unpacking household goods.
  • Storage of furnishings and other goods if necessary – usually for up to two months, until a residence is available.
  • A managed home sale program that allows for non-taxable expenses on the sale of the home.
  • House-hunting expenses incurred in looking for a new home: transportation, lodging, meals and in some cases, childcare so the kids can stay home (and out of the way) while the parents can house-hunt in peace. (According to the Illinois-based search firm Witt Kiefer, companies are increasingly encouraging families with younger children to leave them home, and reimbursing them for the expense, while looking for a new house.)
  • Temporary living accommodations for the employee, such as short-term rentals. Note that not all companies pay for the cost of feeding and housing families in addition to the employee, so this needs to be clarified at the outset, although family assistance is increasingly becoming the norm.
  • Miscellaneous expenses, usually in the form of an allowance (miscellaneous expense allowance, or “MEA”), to cover smaller but necessary costs such as driver’s license fees, pet registration and licenses, cleaning services at the new home, utility hook-ups and other move-related expenses. The allowance usually amounts to one or two months’ base income, minus taxes.

Additional covered services, especially if an overseas transfer is involved, may include:

  • loss-on-sale allowance in the event your present home sells for less than its purchase price (a not-uncommon situation since the Great Recession)
  • Spousal job assistance in the new location
  • School location assistance for school-age children
  • Trips home for those in longer-term temporary housing, usually limited to one every 30 days.

Hard-to-move items such as boats, large vehicles, horses or playground equipment are not normally covered reimbursable items. Unless the employee anticipates returning to the original area within a short period, it may be more cost-effective to simply sell anything that can’t be moved or stored.

Many third-party relocation firms offer additional concierge-type assistance with locating quality schools for the employee’s children, handling all aspects of real estate transactions, spousal employment issues, moving the employee’s household furnishings and other goods, all transportation and temporary lodging for the employee and family, both for house-hunting as well as the final move.   

The takeaway

With relocations on the rise, companies are offering more inducements to their transferees, making moving easier and less expensive, with savvy companies turning to third-party relocation management firms to ensure a smoother transition.

Topics: relocation packages, standard relocation package

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