CapRelo Blog

Which Mobility Expenses are the Highest?

Posted by Amy Mergler on Fri, Jun 09, 2017

High CostsIt’s crucial to know exactly where your money’s going to fully understand and manage your mobility costs. Statistics from 2015 research by Worldwide ERC® show the highest expenses are:

Real Estate Issues Can Bust the Bank

The largest employee relocation expense falls into the real estate category – typical employee relocation costs for renters are about $23,000, while they rise to an average of $90,000 for homeowners, and potentially much more than that if the employee is a top executive.

Very often in the relocation industry, you will come across talent who had the desire to move, but couldn’t sell their homes. Or they were offered lump sum packages that weren’t enough to cover closing costs. With the recent uptick in the housing market, it’s possible that selling will be easier. However, higher real estate prices also mean that employees need a larger budget if they want to purchase a home in the new location.

Reduce Costs without Delaying Home Sales

So how can you recruit and retain top talent who may feel tied to their region because of a house they can’t sell without taking a loss?

Compromise is an important word in the real estate industry right now. Sellers may have to compromise on their asking price, offer seller concessions or take other steps to ensure the fast sale of their home. Buyers must navigate a tricky mortgage approval process that could involve extra paperwork or delays that didn’t exist a few years ago.

However, no one’s compromising more than the companies attempting to relocate employees quickly and efficiently. After all, a quick home sale creates less stress for the employee, thereby improving the chances of employee retention following a move and contributing to a faster return to productivity.

Sold HouseThat’s why home assistance programs are frequently designed to generate fast home sales without much consideration of cost – the reasoning being that by providing solid support, you can make the home selling and buying process relatively quick and easy for the employee. Yet it’s important to bear in mind that each employee’s situation is different, and some employees might require more assistance than others.

Depending on the employee’s role in the company, as well as their personal situation, a good home assistance program could include anything from lease breaking or loss-on-sale assistance to bonuses for quick sales and guided home-buying tours at the destination. While the associated costs could add up, they’re nothing compared to the potential damages if you lose talent.

Whether you manage your own program or work with a relocation management company, you’ll need to find a balance between successful relocations and managing your budget to ensure you have a winning mobility program.

Tax Gross-Up Adds Up

Many employees are surprised to hear that expenses that aren’t deductible or excludable as relocation costs are taxable. To reduce the burden to the employee, your company can assume a certain portion of this tax liability. This is called grossing up, and it’s clearly a tool that can be used to persuade employees who may be reluctant to move. 

However, it’s also important to understand that the costs of grossing up can quickly add up. The larger the costs of the relocation, the larger the gross up, so only include tax gross up as a standard feature of your package if you’ve accurately calculated the maximum costs involved.


Delivery men loading a sofa in a truck - isolated over white.jpeg

Disorganized Moving of Household Goods Drives Up Costs

Ensuring that an employee’s possessions arrive at the destination intact and on time is critical to a successful relocation experience. However, when you understand all the variables that go into this endeavor, it’s easier said than done. Packing, storage, hauling and unpacking all involve labor and time. For a global move, there are more things to consider, such as customs and licensing.

The more aspects of household goods moving managed by one moving or removals company, the greater the chances of a successful relocation. While some employers try to cut costs by booking separate companies for the individual components of the move, this can easily lead to an uncoordinated, disorganized process that is also highly stressful for the employee.

An advantage to working with a relocation management company is that it can leverage the total volume of its clients with a network of suppliers for each client, which yields higher levels of service and competitive pricing.

Temporary Living Impacts Costs

In the event an employee needs temporary living before finding a long-term residence, many companies offer to either assist with or cover the costs of temporary living. These costs can involve anything from renting a home and furniture to covering the costs of Internet and home security.

Unfortunately, 34 percent of companies report that it’s difficult to find houses to rent. That means that depending on the location, temporary living expenses can have a significant impact on your costs. 

You can contain these expenses by working with a relocation management company or a broker to interface with local leasing offices to find suitable properties in the desired price range.

How Much Is Too Much for Miscellaneous Costs?

Many mobility packages contain a standard sum for miscellaneous costs, which can be used at the employee’s discretion. While that’s certainly the simplest way to approach miscellaneous costs, taking a case-by-case approach might be a more cost-efficient option because the costs will vary depending on factors such as:

  • The distance of the move
  • How many family members are moving
  • The method of transport to the destination
  • Costs of living at the origin and destination

For example, an employee moving from New York to London with a spouse and two children will have higher miscellaneous expenses than a single employee moving from Omaha to Detroit.

Family Assistance varies

Beautiful family with a dog - isolated over a white background.jpeg

Providing quality family assistance is essential to keeping your employee engaged. Moving is an emotional experience for both the employee and the family. It can have a negative impact on a spouse’s career, affect children’s academic performance and make the entire family feel isolated and unhappy.

Employees will have their own concerns that go beyond the broad strokes of finding a job for their spouse or determining whether the schools in the area are good.

Some employees have family members with special needs who need assistance both during the move and at the destination. Some may be used to an active social life, so they need assistance finding organizations or clubs to join. Yet others may be worried about their children adjusting to their new environment.

Because each employee’s needs are unique in this area, setting a flexible budget for family assistance could prove to be a better financial option than simply allocating the same amount to all employees. You may find that working with a relocation management company to provide family assistance on a case-by-case basis is a smart financial option.

A Guide to  Relocation Costs


Topics: global mobility, employee relocation expenses

Which Relocation Expenses Can Be Excluded from Income Tax?

Posted by Amy Mergler on Fri, Mar 10, 2017

TaxesRegardless of the distance or time of year, relocating for a job is an expensive undertaking. Fortunately, many employers have relocation packages in place that reimburse employees for some, or all, of their moving expenses. Some relocation expenses are excludable from income tax, while others are considered additional taxable income by the IRS.

Learn more about relocation and U.S. taxes in our free guide.

Excluded Moving Expenses

Qualified relocation expenses are not included in an employee’s income. They are paid directly to the employee or to third parties. Excludable expenses paid directly to the employee are noted on the employee’s W-2 form in box 12, while payments made directly to third parties on the employee’s behalf need not be reported on their W-2.

Excludable moving expenses typically fall into two primary categories, household goods and final move expenses. Below are some common costs related to these two categories.

Moving Household Goods

  • Packing and unpacking household goods at the original and new residences
  • Disconnecting, then reconnecting utilities for each home
  • Transporting pets from the original residence to the new location
  • Packing, crating and boxing supplies
  • Transporting personal vehicles to the new location
  • Storage expenses, usually for 30 to 90 days (depending on the policy and individual circumstances)
  • Insurance on the household goods

Final Move Expenses

  • Transportation expenses to physically move the employee and his/her family to the new residence
  • In-transit lodging for the family
  • Mileage expenses for employees traveling by car, but only the first $0.19 per mile in 2017 (varies each year) is excludable from income

To be excludable from income, the employee should take the most direct route to the news home.

Where to Find Information on Excludable Relocation Expenses

Visit the IRS website to find the most up-to-date information on excludable relocation expenses. Specific information on relocation expenses is outlined in IRS Publication 521, Moving Expenses.



Although this written communication may address tax issues, it is not a covered opinion as described in Circular 230.  Therefore, to ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments), unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.

Topics: relocation taxes, employee relocation, employee relocation expenses, relocation expense reimbursement, tax impact of relocation

Don't Confuse Relocation Reimbursement With A Bonus

Posted by Nicole Overholt on Thu, Mar 02, 2017

accounting-resized-600.jpgMany employers offer bonuses or lump sums to employees agreeing to relocate. While this is a welcome benefit, it's important to understand the difference between relocation reimbursement and bonuses. 

Bonuses and reimbursable moving expenses are additions to the employee's taxable income, requiring employers to also pay standard payroll taxes such as Federal, State and FICA.

Our article, Understanding Lump Sum Relocation Packages, will help you make the best decisions on relocation packages for your company.

Moving expenses & Relocation Reimbursement

Common moving expenses related to transporting the employee's household goods and personal possessions as well as the family’s final move include:

  1. Direct moving company costs for transporting household and personal goods.
  2. Packing and unpacking household goods and personal property.
  3. Storage costs for up to the first 30 days after the move.
  4. Insurance on the household goods.
  5. Transportation from the employee's primary origin residence to the new location. 
  6. In-transit lodging.


Employee bonuses are typically paid for one or both of the following reasons:

  1. Employer decides to offer a bonus as an incentive for the employee to agree to relocate.
  2. Employer recognizes that the cost of living is higher in the new location versus the employee's current area.

Bonuses as incentives or payments to defray increased cost of living must not be confused with reimbursing moving expenses that are the result of a job relocation. Bonuses, as one-time monetary payments for one of the noted reasons, are treated as additional taxable income. Usually, salary increases (which are more long-term in nature) are easier to understand and accept as taxable income, but what happens if the employee is then transferred to a lower cost of living location?

However, bonuses, even when generated by transferring an employee from one place to another, remain taxable income. Although these incentives or cost of living difference payments are related to the relocation, they are not eligible for income exclusion or tax deduction by the recipient.

Incentives or bonuses are taxable and subject to supplemental withholding regulations. Many companies choose to provide tax assistance (tax gross-up) to further entice an employee to relocation. This can add 45 to 70%+ to the total spent by the company. Management should adopt relocation reimbursement policies that take advantage of available tax benefits, while offering reasonable, equitable and fair relocation programs for their valued employees.

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Topics: relocation benefits, Corporate Relocation Costs, employee relocation expenses

Use Tiers to Avoid Exceptions in Your Corporate Relocation Policy

Posted by Rick Bruce on Thu, Apr 21, 2016

Tiered Relocation AgreementMany companies view a tiered corporate relocation policy as more work. It's true that your HR staff will have to take the time, and may enlist the help of a corporate relocation management company, to establish fair and appropriate tiers based on employee salaries or job levels and set the benefits offered in a corporate relocation package within each tier. But once that's done, a tiered policy actually decreases the work required by the HR staff or corporate relocation management firm.

Find out more about how tiered relocation packages can save you time and money in our free article.

3 Ways Tiered Relocation Polices Can Make Relocation Easier

Here are some ways a tiered corporate relocation policy makes individual relocation or group moves easier.

  1. Eliminate the need to negotiate every employee relocation package individually and/or reduce exceptions to your policy. If you don't have a corporate relocation policy at all, you'll find yourself reinventing the wheel with every employee relocation. Having a one-size-fits-all policy is better than having none, but you may be faced with so many exceptions to the policy, it's like creating a new policy every time you relocate an employee.

  2. Reduce resentment (or lawsuits) when employees discover differences in relocation packages. (And they will!) Remember, in the corporate world, nothing stays secret for long. When employees find out about exceptions made in corporate relocation policies, they'll resent their co-workers who negotiated a better package. If you upset the wrong employee and the exceptions can't be justified, you might even face a lawsuit, along with a drop in company morale and a sense of distrust amongst employees.

  3. Improve your retention rate for relocating employees. Faced with the above scenarios, you have a few choices if you want to keep good employees with a relocation package that gives them what they need. A tiered relocation policy where the tiers are clearly defined based on employee levels or salary sets the standard and reduces exceptions. Like a good employee handbook, it makes the process more cut-and-dry, and permits you to keep more employees happy with less work in the long run. That doesn't mean a tiered policy will completely eliminate exceptions to your corporate relocation policy, but it helps.

Save Time & Money Using Tiered Relocation Packages

Topics: Tiered relocation packages, employee relocation expenses, Buyer Value Option

The Trade-Offs of Using Lump-Sum Relocation Packages

Posted by Rick Bruce on Wed, Jan 16, 2013

v--crs-kristins-blog_posts-blog_photos-falling_money_around_person-resized-600.jpgMore and more businesses have been favoring lump-sum relocation packages for employees in recent years. After all, they are cheaper than just doing a regular relocation - right? Unfortunately, the truth of the matter is not always so cut-and-dry.

One thing about lump-sum packages that is easy to overlook is the fact that, like many other "discount" programs, they can cost more than they save in the long run. While this isn't necessarily true in every case, it happens more often than anyone would like; how do you know if it's true of what you offer your employees? Let's take a look at some of the trade-offs and explore how it all adds up (or doesn't).

Our free guide will help you understand lump-sum relocation packages.

How a Lump-Sum Relocation Policy Saves Money in the Short Run

Lump-sum relocation packages obviously have their advantages. Otherwise, none of us would ever use them! When employers favor them, they do so because:

    • They have a lower front-end cost.
    • They seem to be an easy, "hands-off" way to manage employee relocation.
    • In some cases, lump-sum relocation packages provide greater flexibility to employees.
    • They eliminate the chance that you'll buy an employee's home, only to be stuck unable to sell it in the current housing market.
    • Lump-sum packages put less strain on Human Resources.

It's true that a lump package will help any business with front-end costs. But what about the longer term costs? They are often easy - and dangerous - to overlook.

The Hidden Costs of Lump-Sum Relocation Packages

The biggest trade-off with lump-sum packages is what you get back in employee satisfaction and loyalty. Making a move is always a stressful procedure, even when it involves a better position at the end of the tunnel. Even the smallest thing you do (and don't do) for your relocating employee during this time will have more impact than it would under less stressful, more routine circumstances.

Probably the biggest drawback in today's economy is that each employee is left to take care of home sales on his or her own. Unless you live in a select few markets, this is likely to double or triple the stress your employee feels about their move.

This often translates to increased frustration or even bitterness towards you as an employer--especially if your relocating employees know anyone whose employers provided them with AVOs, BVOs, or other buy-out options.

Another prospect looms even larger for most employers: the difficulty of working with an employee who is trying to sell his or her old home. At the very least, this takes time and energy away from your employee's vital functions.

At worst, a slow home sale could result in a disappointed employee who moves back to their original location, leaves at a critical moment, or stirs large amounts of discontent with your other employees.

When it comes down to it, a lump-sum employee relocation package often represents moderate initial savings. But a more well-handled employee relocation policy is actually an investment: an investment in your employee's loyalty and productivity, as well as an investment your business's future.

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Topics: Home Selling and Purchase Assistance, employee relocation expenses, lump sum package

Moving Expenses Not Excludable from Income

Posted by Nicole Overholt on Tue, Jul 24, 2012

Some moving expenses are not excludable from an employee's income per IRS regulations. Failing the distance or time test still renders all moving expenses either not excludable or non-deductible. However, thoroughly understanding the basics of both IRS moving tests and regulations helps individuals and companies comply with federal law and minimize negative tax consequences.

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The IRS considers some moving expenses, regardless of your performance on the distance or time tests, as non-excludable from employee income. The following expenses, although directly related to relocation and moving, are not excludable from income, when reimbursed to relocation employee or paid on their behalf by the employer.

  • Lump sum and other general expense allowances.
  • Meal expenses related to the move.
  • Costs to find a new home.
  • Expenses for temporary housing during or immediately after the move.
  • Penalties and fees, e.g., early lease termination.
  • Rental tours and assistance
  • HHG storage costs, after the first 30 days after the move.
  • Incidental expenses for buying a new home. (This item does not include mortgage points, property taxes, loan prepayment penalties or two mortgage payments, the interest portion of which is tax deductible when taxpayers itemize deductions.)
  • Conveyance taxes and fees charged when selling or buying a home.
  • Final move by car mileage reimbursements over $.23 per mile (2012).
  • Income tax professional assistance to properly account for the move.
  • Sales costs of selling the old home, including real estate commissions and closing costs.*

* Should the employer have a home purchase program for transferred employees, it may qualify under IRS Revenue Rulings 72-339 and 2005-74. Employers should attempt to structure their relo program to receive more favorable tax treatment for their employees and the company. To qualify for this treatment, there should be two valid sales. One will be from the employee to the employer and another from the employer (home owner) to a qualified buyer.

To fulfill IRS requirements the key factor is the fairness or arm's length nature of the transactions. The employee's current home should be appraised by at least two independent certified appraisers. The employer then buys the home for the average of the two appraisal values. After deed transfer, the employer sells the property to a qualified buyer, without input of or control by the employee. The employer pays all related selling and closing costs, but the employee receives no taxable income. Additionally, the employer is not responsible for giving the employee additional income, tax withholding duties or employer payroll taxes.

Employer relocation programs should address these non-excludable moving expenses. Companies do not face mandates as to the features of their relo policies, but senior management and HR should be aware of prevailing IRS regulations and the programs offered by their primary competition for talent.

A Guide to  Relocation Costs

Worthy employer goals involve minimizing the transferring employee moving stress level, eliminating unplanned negative tax consequences, for employee and employer, and maintaining budgetary control. Attracting and retaining talented executives is challenging. Reasonable relocation programs help achieve this and overcome this challenge.

Topics: Corporate Relocation Costs, employee relocation expenses

Moving Expenses Excludable from Income

Posted by Nicole Overholt on Tue, Jul 17, 2012

People_Moving.jpgControlling moving expenses is a priority for both individuals and corporations. Executives and HR departments must thoroughly understand the definitions of qualified, excludable, deductible and non-excludable moving expenses. Two major categories dominate the excludable expense category: Household Goods (HHG) and Final Move expenses.

Find out more about relocation and U.S. taxes in our free guide.

Household Goods (HHG)

This is the most detailed and well-defined excludable expense group. These costs are usually excludable from an employee's income per current IRS regulations. Excludable expenses include costs related to transporting HHG and personal property from a relocating employee’s current home to his/her new home. These expenses include, but are not necessarily limited to the following list.

  • Estimating the value of all HHG and personal possessions to be moved.
  • Packing/unpacking the HHG and personal items.
  • Crating, where necessary, some HHG.
  • Cost of disconnecting and reconnecting necessary utilities.
  • Transporting household pets.
  • Packing supplies, e.g., cost of moving boxes.
  • Gratuities given to the movers.
  • Shipping vehicles from the old to the new home.
  • HHG storage costs, up to the first 30 days after the move.

Final Move Category

Relocating employees traveling from their former house to their new home incur a variety of expenses, many of which are excludable from income. Should your transferring employee opt for a diversion from the most direct and shortest route to the new home, e.g., a three month world cruise, excludable expenses during the "extra" travel in addition to a direct trip do not qualify. Final move expenses excludable from the relocating employee's income include the following items.

  • Transportation costs to move the employee and the employee's family.
  • Temporary lodging, e.g., hotels, for the employee and the employee's family.
  • When the employee travels by car, the first $.23 per mile (2012) that is employer-paid.

Depending on the distance the employee is traveling, these costs can be substantial, particularly when hotel charges are involved. As long as the employee passes the IRS "distance test," these expenses are excludable from income.

Distance Test

Should your employee fail the distance test, the above items become moot. Employees must pass the distance test before excludability becomes a factor. Faithful to its history, the IRS (and therefore, the U.S. Congress) has minimum distance limitations to qualify for excludable moving expenses.

To quote the IRS, "your new workplace must be at least 50 miles further from your old home than your old job location was from your old home. . ."   Relocating employees must first pass this test to become eligible for excludable and/or deductible moving expenses.

While most experienced HR veterans understand this regulation, many employees endure confusion with this regulation, or at least, the wording thereof. The bottom line is that the employee's new workplace must be 50 miles further from the old home was to the former workplace. For example, assume the transferring executive commuted 22 miles one-way to the former workplace from the old home. Were the relocating employee required to commute 100 miles each day from the old home to the NEW workplace, the noted moving expenses are excludable from the executive's income. These costs should also be deductible by the employer, when paid or reimbursed on the employee's behalf.


Free All-Inclusive Guide  Relocation and U.S Taxes


Although this written communication may address tax issues, it is not a covered opinion as described in Circular 230.  Therefore, to ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments), unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.

Topics: Corporate Relocation Costs, employee relocation expenses, executive relocation package

What if a Pay Cut is in Order During A Relocation?

Posted by Joseph Torres on Tue, Feb 07, 2012

In rare cases, when an employee relocates, market conditions and cost-of-living in the new location warrant a pay cut. This may be necessary to keep the transferred employees' salary in line with existing employees at the location, to avoid legal and ethical issues, and to maintain company morale.

What happens if a pay cut is necessary during a relocation?If the amount of pay cut would be very small, it's better to keep employees at the current rate of pay. You may also consider freezing the individual's salary until market conditions and/or performance show a raise is warranted.

But, if a pay cut is necessary, there are ways to soften the blow with a generous relocation assistance package.

Follow These Steps to Ensure Employee Satisfaction

When breaking the news of a pay cut to transferred employees during relocation assistance package negotiations, follow these steps to ensure employee satisfaction after the relocation.

  • Explain your reasons carefully, sharing market rates, CPI, and any other figures that factored into your decision.
  • Work out a time frame to renegotiate salary.
  • Point out the intangible benefits to the relocation, including lower cost-of-living, larger home, or cultural benefits, such as being close to museums, the arts or good schools
  • Point out work-related benefits to the relocation, such as increased opportunities and room for advancement
  • Offer relocation incentives or retention bonuses as part of relocation assistance packages
  • Offer tax gross up in your relocation assistance packages
  • Offer loss-of-sale benefits on a home as part of relocation assistance packages

Creative relocation assistance packages can make many employees feel better about a move, even if the move requires a pay cut or pay freeze.

A Guide to  Relocation Costs


Topics: Corporate Relocation Costs, employee relocation expenses, Buyer Value Option, employee transfer


Posted by Jim Retzer on Mon, Jan 09, 2012

house-question-2.jpgBefore you begin setting domestic relocation policies or revamping your existing relocation policy, it's important to find out what's most important to your employees. You'll probably discover that home sale, spousal support, and finding a good neighborhood and a new home at a fair price rank near the top of the list for many mid- and top-level employees.

Domestic relocation policies are broken into a few main categories based on how much involvement the employer has, and how much of the burden of managing relocation is placed on the employee. Any type of program may use tiers to determine either how much money the relocating employee will receive (in the case of lump sum reimbursement policies) or what expenses are covered in a direct reimbursement or managed package. Let's look at the pros and cons of each type of domestic relocation policy.

Learn more about developing relocation policies with our free guide.

Lump-sum relocation policies

In a lump sum relocation policy, the employer issues a single check to cover the employee's moving expenses. The burden is on the employee to list and sell his home (either on his own or with a real estate agent), line up household goods movers, help his spouse find a job, and even organize his own scouting trips. The employer has no say as to how the lump sum package is spent.

The benefit to this type of domestic relocation policy, of course, is it's easy for the employer. The employee handles all the stress of selling his home, buying a home, and moving. It may take a long time for the employee's home to sell, dragging out the move to the detriment of the employer. And it may take longer for the employee to return to full productivity; managing a household move can be a full-time job in itself, especially if it involves placing children in new schools.

If the lump sum allocated for domestic relocation is not generous, the employee may want to cut corners, choosing lower quality service providers. This will make the move even more stressful and cause an even slower return to productivity. Many employees who find the relocation process stressful leave the company within the year, and the employer is back to square one, recruiting (and possibly relocating) new talent.

Direct reimbursement relocation policies

In a direct reimbursement relocation policy, employees are reimbursed for each item that is part of their move. In many cases, the employer, or a relocation firm acting on behalf of the employer, will offer assistance with lining up service providers, including real estate agents and household goods movers.

The employee will pay expenses out of pocket, but will submit receipts and be reimbursed. Expenses must be “grossed up” so the employee does not lose out or incur a tax liability from his domestic relocation package.

This type of relocation policy can work well, especially if the employer has a hand in lining up service providers. Employees don't feel a burden to stretch their dollars, and can be assured good service to sell their house quickly and move with less stress.

Managed relocation policy

In these type of domestic relocation policies, the employer or a corporate relocation firm handles every aspect of the move for the employee. Virtually all the employee has to do is pack his boxes and be available on moving day. The employee doesn't actually receive any money, so tax gross-up isn't required. The employer can work with the relocation firm to assure relocation service providers offer the best service available, resulting in a happy employee who can get back to work faster, with less stress.

Managed and direct reimbursement relocation policies may be more challenging for the employer to manage, but that's where a corporate relocation firm can help. In the end, you may save money and keep your key talent happier. If an employee is worth moving, he's worth keeping—and worth keeping happy!

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Topics: employee relocation expenses, corporate relocation program, domestic relocation, executive relocation package

What are Your Biggest Employee Relocation Costs?

Posted by George Herriage on Thu, Nov 03, 2011

employee relocation costsHave you ever considered the items that are your biggest employee relocation costs? An employee relocation expense can be broken into one of several categories:

  • Household goods and people and pet moving
  • Temporary housing
  • Scouting/recruiting tours
  • Expenses related to spouses, children or elderly parents
  • Real estate expenses (buying and selling a home)
  • Miscellaneous expenses (utility turn-on, lease-break costs, licensing, etc.)

Find out more about developing relocation policies with our free guide.

Real Estate Issues can Bust the Bank
In our experience here at CapRelo, the largest employee relocation expense falls into the real estate category. This is evidenced by the fact that typical employee relocation costs for renters are about $18,000, while they rise to an average of $60,000 for homeowners -- and much more than that if the employee is a top executive with a jumbo mortgage on his home.

Reduce Employee Relocation Costs without Delaying Home Sales
So how can you recruit top talent who may feel tied to their region because of a house they can't sell without taking a loss? Loss-on-sale incentives are one option, but this can backfire and increase your relocation costs while still leaving a frustrated employee if the home takes a long time to sell.

A home sale bonus if the relocating employee uses real estate agents and other professionals, such as home stagers, recommended and approved by your relocation company can expedite the home sale for a low-stress relocation and a faster return-to-productivity.


Topics: relocation benefits, relocation management services, employee relocation expenses

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