How Much is the Average Relocation Package? - Earthrelo
How Much is the Average Relocation Package? - Earthrelo
  • February 18, 2021


Finally, you’ve got that dream job you’ve wanted your entire life. It’s got everything you need, except there’s one little problem. It’s located in a completely different city, which means you’ll have to relocate. However, for your career in the long-term, it’s worth it. Now comes the fun part. It’s all about learning how to get the best relocation package you can get. With relocation costs sometimes reaching as high as the tens of thousands, you’ll need to know how much the average relocation package is. Together, we’ll look at what a relocation package should include and how to build an employee relocation package that will ensure you a stress-free success.

What Should a Relocation Package Include?

Your average relocation package may do more than you think. It isn’t only just moving your household objects, but also includes a full pack and insurance. Believe it or not, but most companies will also add on fantastic perks such as temporary housing, relocation bonuses, and even loss-on-sale protection if you’re planning on selling your home. Refer to the checklist below to see if your package will include these multitude of benefits:

  • Packing and unpacking all items
  • Moving your car
  • Moving your exercise equipment
  • Temporary housing
  • Relocation bonus
  • Loss-on-sale protection
  • Moving coordination
  • Storage
  • Spousal employment assistance
  • Rental assistance 
  • Travel allowance
  • Pre-move visit

While these perks sound nice, not every company will be as generous. Packages can greatly vary depending on many factors, such as if you’re a homeowner or renter and whether you have a family. Not only that, but companies go about different methods in getting your package to you. Sometimes, you might need to work with a set moving coordinator or in the worst case, you’ll be required to plan the entire move yourself. Luckily, if you can familiarize yourself with the different types of packages now, you can set yourself up for success so that you don’t have to pay a single cent of your own.

1. Reimbursement: This is the highest amount that a company will pay you back for any moving expenses. Be sure to diligently track what you spent.

2. Lump-Sum: This is a big payment that you get only one time, and the amount is already predetermined through your negotiations when you build an employee relocation package with the company. Be sure to budget and spend it well because you don’t get anymore.

3. Direct Billing: The company will go ahead and pay for all or some of your costs directly, and they will usually handle the moving services, so you don’t have to deal with anything. This method could also be combined with the above two.

4. Third Party Relocation: This is when your company will leave all the relocation package stuff to an outside company, usually a relocation services broker, that will handle all your needs and services.

In general, most companies won’t strictly stick to one method but will mix them up to your needs and the services you want. If you know the terms, you can be prepared for whatever method you’re thrown into.

What is a reasonable or average relocation package?

While a reasonable relocation package depends on your circumstances and a variety of factors, statistics offer an insight into what an average relocation package should look like. According to a 2016 report by Worldwide ERC, the average relocation package costs between $21,327 and $24913 for renters and between $61,622 and $79,429 for homeowners.

What is a reasonable relocation package for a newly hired worker?

Luckily for new hires, companies usually can arrange for higher relocation packages because they don’t have to pay the hire as much of a higher salary. According to Worldwide ERC, a 2015 report revealed that companies spent an average of $71,803 in 2014 for newly hired homeowners and $23,766 for newly hired renters.

How much should a lump sum relocation package be?

For a flat lump sum, you should expect typically between $1,000 and $7,500. According to Dwellworks, employees across the nation receive an average lump sum of $7,200.

How to Build an Employee Relocation Package

How to Build an Employee Relocation Package - Earthrelo
How to Build an Employee Relocation Package

Now that you know a general overview of what a relocation package should include and what a reasonable relocation package should look like, it’s time to get to work and build that perfect package. You’ll now have to bring out those negotiation skills so that you can get the best package possible. Let’s look at the steps.

Use Your Voice

You’re all ready for your relocation and you’re bustling with excitement at the prospect of working at your dream job in your fabulous new city. Your company has gotten everything probably already taken care of for you, right? Wrong. Never just assume that your company will offer you a relocation package that has already guessed out the assistance for your needs. You must be direct in knowing what you want and most importantly, asking for it.

This is imperative because you don’t want to be faced with relocation on your own. Moving can get extremely expensive and the stress is intensified if you don’t have enough assistance at your hands. In the workplace, never get too shy about using your voice and asking for help. If you do your research correctly, you’ll be surprised at what you can usually get out of a good negotiation. Remember, both you and your company want the relocation to be successful and for you and your family to have a good experience. Both of your interests are in the same place, so you’ve got nothing to lose and everything to potentially gain!

Know Your Stuff Well

You know all too well of that divide between your personal and professional life, so don’t assume that your employer will know what services you need or even how big your family is for that matter. That’s why you should really take the time to look over what you have, assess your needs, and suggest them during your negotiation meeting. Be sure to also research the costs of your services so you can have a good sense of the total relocation package cost. Don’t shy away from saying what you want — even though you might not get it, there’s a good chance you could.

What are the Corporates Thinking?

Even though companies want you to have a fantastic moving experience, they really want to spend as little as they possibly can. However, they also see relocation packages as good recruiting tools, so whatever policy or precedent they have regarding relo packages could really affect what type of talent in the market they find. That means if you’ve got a competing job offer that comes with a better relocation package, mention it. The company you want to work for might match that package or even raise it to attract you. Ultimately, the company cares about its reputation, so it’ll try to do the most to have you work for them and not a competitor. Another leeway you can privy into is your base salary. If it’s not as high as you want it to be, the company may be able to make it up for you in your relocation package if you don’t ask for a higher salary. That’s because the relocation package is a one-time expense rather than an annual salary.

Get Negotiating

Companies always care about ROI or return on investment. Because they’re spending a lot of money on you, they ultimately want to see you benefit their company in the long run. In saying this, make sure to emphasize how your moving will be beneficial for the company and how it’s a win-win for both sides. Wording is especially important. If there are extra services that you want, try to word your sentences in a way so that your contribution and benefit to the company comes first. Concise, clean, and rational sentences always win the day, so make it as easy for your company as you can to make a case for a higher relocation package for you. You can do this!

How to Build an Employee Relocation Package Checklist

  1. Be brave and use your voice to ask for help.
  2. Really research and assess your situation so that you take care of all your projected needs and services. Be sure to keep costs and prices on hand to help you determine a final amount.
  3. Learn some corporate psychology so you can be prepared for the type of things that they’ll look out for when you make your negotiation talks. Remember that they use the relocation package as a recruitment tool and that you can bring in competitor relocation packages for comparison. Your low base salary can also be used to get you a higher package. 
  4. Lastly, it’s time to make your case. Emphasis throughout the discussion on how you will benefit the company in the end and use precise wording to get what you want.

Beware the Fine Print

With such a big move, there’s always a few risks that you could potentially run into if you don’t pay attention when building your employee relocation package. Companies always use their lawyers to add in policies with protections in case you run into troublesome situations, so be sure to look out for a few things in the fine print before you finally accept a relocation package.  

Payback Timing

You might assume that the company will give you the money for your lump sum payment immediately after you cut the deal, but that’s not always the case. Sometimes, the payback timing of a company can even take place after the move or even take half a year! Most companies will send out the payment during your first paycheck, but you don’t want to play it too safe. If a company does decide to pay you much later, you could lose a large portion of your savings or be in big debt for a good while.

Payback Clause

When your company is giving you so much money to help you move, it means that they really want you and only you to work for them. They don’t want you to use their relocation package to leap over and then suddenly go work for a competitor. That’s why these companies might have payback clauses built into the relocation package. It’s just a clause that requires you to sign a payback agreement where if you leave the company to go work for another within a set amount of time, like a year or so from the start of your new job, you’ll have to pay back the entire or partial cost of your relocation. According to the Worldwide ERC, almost 86% of companies have a payback clause.

Unapproved Expenditures

Even if you get a big sum of money, it doesn’t necessarily mean that you can start contacting any service you want to move whatever you want. Usually, you’ll have to look at the approved expenditures policy to see what’s an approved expense and what’s not. For example, it may not be allowed for you to contact a special service and ship over your live pet lion. All in all, do your due diligence, see what you need, and do some extra negotiating if need be.

Taxes and the IRS

You might think you can forget about taxes, but when it comes to building an employee relocation package, you unfortunately don’t get that luxury. Did you know that lump sum payments are considered technically earned income, so you’ll still have to pay income taxes for it? The best situation you can have is one where the company will bill directly for the moving services, so you don’t have to worry about taxes. However, it’s most likely that the company will give you the lump sum pre-tax. It always doesn’t hurt to ask for the sum post-tax. Either way, be sure to take taxes in account when you calculate your spending. That way, you can deduct moving expenses in your tax return.

To know more, Contact our experts today! Earth Relocation (Earth Relo) is a leading Moving and Relocation Company in the USA that provides one-stop solutions for all your moving needs. We provide services in New York, Connecticut, Maryland, Ohio, Washington DC, Arizona, Massachusetts, Texas, Georgia, North Carolina, Florida, Pennsylvania, Michigan, Virginia and more.

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