March 2, 2024

What Is a Relocation Fee?

A umzugsvergilch is a sum of money that an employer offers to cover the costs of

moving for work. Companies often offer these packages to attract new hires or

transfer employees, and the amount of money can range from a few thousand

dollars to nearly $100,000. Generally, high-level executives receive the most

comprehensive packages.

The most common expenses covered by a relocation package include temporary

housing allowance, home buying assistance and selling assistance, and moving

costs. Typically, employers cover up to 30 or 90 days of short-term housing while the

employee searches for more permanent accommodation. This can be in hotel rooms

or in corporate housing.

Some companies will also pay for house-hunting trips to the new location. This is

particularly useful when the new location is a long distance from home and can be

expensive in terms of transportation, lodging and food. Depending on the size of an

employee’s family and the amount of household goods they have to move, the cost

of these travel expenses can be significant.

Most relocation packages will also cover the cost of shipping household items to the

new location. However, it is important to remember that many items may not be

able to be shipped due to weight or size restrictions. In addition, some items may

need to be professionally cleaned before they can be shipped to avoid damage. It is

therefore advisable for employees to contact a reputable shipping company before

they move to find out what items will and won’t be covered by their relocation


When negotiating a relocation package, it is often helpful to compare industry

competitors’ packages. This can help employees understand what types of coverage

areas they should be aiming for and highlight any issues that are not being

addressed by their current employer.

It is also a good idea to ask an employer what their timeframe for the relocation is

and how flexible they will be in case the employee is unable to buy or sell a property

within this timeframe. In addition, employees should discuss options such as

temporary storage and rentals, if necessary.

It is also important for employees to consider the tax implications of their relocation

package, as different options will have varying tax consequences. For example, if an

employee opts to take a cash payment for their relocation package, this will likely be

subject to income tax. However, if an employee chooses to use their package to

cover the costs of moving and housing, this will be tax-free. For this reason, it is

often a better option for employees to choose to use their relocation package to pay

for services rather than cash. This way, the money is more flexible and can be used

to cover any unforeseen expenses that may arise during the process.

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