What Employers and Employees Should Expect
Employee relocation is a strategic investment that supports business growth, talent development, and workforce flexibility. Whether relocating an employee domestically or internationally, understanding the full scope of relocation costs is essential for employers and employees alike. Reviewing common relocation costs helps organizations create realistic budgets, design effective mobility policies, and deliver a positive relocation experience.
Housing and Pre-Move Expenses
One of the most significant cost areas in a relocation program involves pre-move and housing-related expenses. For homeowners, this often includes real estate commissions, home marketing costs, appraisals, inspections, and potential loss-on-sale assistance if market conditions are unfavorable. Employees may also require temporary housing while their home is listed or while searching for a new residence. Renters can incur expenses such as lease break penalties or forfeited security deposits, which are often addressed within corporate relocation policies.
Household Goods and Moving Costs
Household goods transportation is another significant relocation cost and one that directly affects the employee experience. This typically covers professional packing and unpacking services, loading and transportation, and final delivery of household items. In some cases, short-term or long-term storage is required if there is a gap between move-out and move-in dates. The overall cost of moving household goods is influenced by distance, shipment weight, timing, and service level, making vendor management a critical component of cost control.
Temporary Living and Housing Support
Temporary living expenses are often needed when employees cannot move directly into permanent housing. These costs may include furnished accommodations, utilities, and, in some cases, daily living allowances. Temporary housing is essential in high-demand or competitive real estate markets, where securing a home can take longer than anticipated. While temporary living increases short-term costs, it provides stability and reduces stress for relocating employees.
Travel and Transportation Expenses
Travel and transportation costs also factor into most relocation budgets. These expenses generally include airfare or mileage reimbursement, lodging during travel days, and meal allowances. Some relocation programs also cover a pre-move house-hunting trip to help employees make informed housing decisions. Establishing clear guidelines around travel benefits helps organizations manage costs while supporting employee needs.
Destination Services and Onboarding Support
Destination services play a critical role in helping employees transition successfully into their new location. These services often include area orientation, rental or home-finding assistance, school search support, and help navigating local resources. While destination services add to overall relocation costs, they frequently shorten adjustment timelines, improve employee satisfaction, and reduce the risk of assignment failure.
Tax Assistance and Compliance Considerations
Tax assistance is another commonly overlooked but important relocation cost. Many relocation benefits are considered taxable income, which can create unexpected financial burdens for employees. To address this, employers may offer tax gross-ups or year-end tax reconciliation services to offset the impact. Although tax assistance increases employer spend, it supports fairness, transparency, and compliance within relocation programs.
Relocation Program Administration and Management
Administrative and program management costs are essential to a well-run mobility program. These include policy development, vendor coordination, compliance oversight, and employee counseling. Partnering with a relocation management company allows organizations to centralize these functions, improve visibility into spending, and ensure a consistent employee experience across all relocations.
Building a Cost-Effective Relocation Strategy
Reviewing common relocation costs enables organizations to make informed decisions, control expenses, and support employee success. With the right strategy and expert guidance, relocation can be both cost-effective and impactful. At GMS, we help organizations design mobility programs that balance financial responsibility with an exceptional relocation experience.
Christina Urrutia
Christina oversees Global Business Development for LATAM markets. Christina brings with her over 15 years of experience in helping clients build mobility solutions in a variety of roles such as Relocation Counselor, VP of Global Sales, Manager of Business Development and Strategic Partnership Manager. Christina holds key industry certifications including Global Mobility Specialist with a talent accreditation (GMS-T) and Certified Relocation Professional (CRP) designation from Worldwide ERC. She also holds a 120-hour English as a second language teaching certification (TESOL) and has completed over 400 class hours helping students achieve their fluency goals. Christina’s passion for Duty of Care and Employee Wellbeing has led to countless speaking engagements within the industry and has fueled her own networking group, Women of Global Mobility to inspire and encourage the growth of Women within the industry.
