Who Pays for What When Relocating for Work?
Moving is a time-consuming project, and it comes with its share of hassles and expenses. Fortunately, if you’re relocating for work, your new employer may ease the expense (and the stress) by including a variety of moving expenses in your relocation package.
Previously, tax deductions were allowed for certain moving expenses as long as you met specific requirements (like starting the new job within a year after moving and starting a new job that is a certain distance away from your old primary residence). However, that deduction will not be available for the 2018 tax year for anyone except members of the armed forces.
Before you call the moving company, make sure you know which expenses are covered by your employer and which you will have to take care of on your own. Your moving benefits may vary depending upon the job and the company (the higher the salary and the bigger the company, the more you are likely to get), but here are some of the covered expenses you might be able to expect or negotiate for:
This includes the cost of hiring a moving company and, perhaps, the cost of transportation or putting certain items in storage. Moving from Miami to Georgia, for example, isn’t as expensive as moving from Miami to Peru; your new company may keep that in mind when making your relocation offer. In some cases, the company might reimburse you for the cost of the international moving company you choose; in other cases, they might give you a set amount and you may have to make up the difference. A long-distance move has more considerations (and is naturally more expensive) because it’s not so easy to go back-and-forth, so the relocation package should be higher than what you might expect with a move spanning a shorter distance.
It might not be possible to find a new home by the time you need to report for your job. In this case, your employer may pay for temporary housing until you find your permanent home.
Your company may help sell your current home or pay the closing costs of buying a new home. If you rent your home and have to break a lease to make the move, the company might pay the penalty for you.
If your family is unable to move when you do, perhaps because of the children’s school schedules or your spouse’s current job, your new employer might pay for your trips to visit them until they can join you in your new city. In other cases, they might help your spouse find a new job. You might also get help with school fees, childcare, or even finding the right school for your kids.
The money your company gives you to pay for your moving costs may be considered taxable income. You should discuss this with your accountant. If that is the case, your employer may give you a slightly higher amount to cover the cost of the taxes.
If you find yourself in a position to negotiate for your relocation benefits, this Monster article suggests being clear about what’s important to you and where you need assistance. After all, if some of the hassles of the relocation are taken care of (such as finding child care, selling your old home, moving your vehicles, helping your spouse get a job, and managing what may be a higher cost of living in your new city), you’re better able to focus on your new job. Some larger companies may have set relocation packages, while others are able to negotiate to accommodate your needs.
After you know how your employer will help, you’ll have a better idea of your out-of-pocket costs. From there, you may be able to adjust your final out-of-pocket cost depending on the services you need: insurance, packing, storage, and more will impact the price of moving.
Planning your upcoming relocation? Contact your local international movers today for a free estimate.