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How to Relocate During the Rush Moving Season

Tips for Staying Ahead of Peak Moving Season

The middle of May until about Labor Day weekend marks the peak moving season in America. During these months, moving companies and relocation specialists see substantial increases in those looking to relocate. During this time, thousands of people try to get their families moved into their new homes as quickly as possible. Many factors come into play, but the primary two are summer weather and summer vacation. It’s tough to argue that it’s much easier to move when the weather is great. Additionally, summer break is an ideal time for those moving as a family to get the kids settled into their new home before the new school year kicks off. 

When relocating for work, it is not always up to the transferee when their household goods move can take place. Many employees have a firm “report to work” date that drives their relocation timeline. It could also come down to their relocation policies and the benefits that are provided to them by their employer. 

When it comes to summer moves, it is best to get ahead of the busy moving season. Here are some tips on how to get a headstart.

The Advantages of Planning Ahead

With so many Americans moving within this tight timeframe, there are several advantages to getting a head start on this rushed window: 

  • Less stress: staying ahead of the curve when it comes to moving can help alleviate some of the stress that comes with moving. If everything is planned out, it helps assure that things will go more smoothly.
  • Cost savings: if you can book ahead of time, or move out before the busy season, moving companies are more likely to work out better pricing with both customers and suppliers. 
  • Time: while relocating dates are not always up to the transferee, trying to get a jumpstart on the process can help assure the transferee’s household goods and vehicles can be transported, by the moving company, on dates that work for them. 
  • Flexibility: If dates, costs, or anything else needs to be changed or canceled, having time to do so is key.

What to Do If Moving Dates Are Not Up to the Transferee

Moving for a new job or promotion does not always give the transferee the power of when to plan for a move. Oftentimes, relocators might be forced to ship out during the peak moving season. When this happens there are some options, first off it is highly recommended to work with a relocation services company. Employers who have built out stable relocation policies typically already have these services available and many relocation companies provide moving employees with relocation coaches to aid the move. If the employee does not have access to such services, they should review their company’s relocation policies and offer letters to understand what moving costs may be covered. 

Work with the Best to Avoid Stress

Moving is a stressful process just to go across town, but relocating to a new city and state can be an extremely complicated process, not to mention doing so during moving companies’ busy seasons. Working with an experienced relocation service company can do much more than just getting your household goods from point A to point B, they can assist in real estate needs and other relocation services. Connect with GMS today to discuss how we can help move employees and their families in a safe, timely fashion.

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What Is Tax Gross-Up & How Do You Calculate It?

How to Handle Tax Gross-Up Methods When Relocating

The relocation process can be hard to understand. Relocation policies and rules may seem like insurance terms that don’t always make sense to those who are utilizing the policies. Tax gross-up is one of the more common aspects of a solid relocation policy offered by companies to employees. 

Tax gross-up (when it comes to relocation terms) refers to money that an employer can add to an employee’s payroll records to help offset federal ,state, OASDI or Medicare taxes. These taxes come into play as the majority of moving expense reimbursements, or payments to service providers on the employee’s behalf, are seen as taxable income to the employee in the eyes of the government. 

In simplest terms, tax gross-up is a benefit included in an employee’s relocation package, and there is no right or wrong way to calculate it. Employers can add as much as needed to make the relocation policy appealing for the employee to relocate. However, payroll withholding is a requirement and companies should remit payroll taxes on taxable relocation expenses. The calculated amount of tax gross-up is used to pay a solid portion of the required payroll taxes on that company’s payroll. 

How Should Relocation Tax Gross-Up Methods Be Applied on Policies?

Global Mobility Solutions advises our clients to keep gross-up simple, allowing employees to understand the method used and verify the amount. Also, GMS cautions companies from telling transferees that they can completely avoid any tax liability resulting from their move. Instead, companies should refer to tax gross-up as a “tax assistance” program. This way relocating employees do not get the impression that they will be “made whole” and avoid paying taxes altogether.

The Different Methods of How to Calculate Tax Gross-Up

There are a few different tax gross-up methods that companies can utilize when it comes to helping employees. Here are some of the more common methods used for relocation policies:

Inverse Supplemental: Tax on Tax

This is the most common method to calculate tax gross-up. This method uses the current Federal and State supplemental rates for calculation. This method is the easiest to administer and explain to relocating employees.

Typical methodology includes:

  • Federal Rate: Supplemental Rate (currently 22%)
  • State Rate: Supplemental rate of applicable payroll state
  • OASDI: 6.2% up to the applicable annual cap
  • Medicare: 1.45% + Surtax when applicable

Total to be added – 34.65% assuming a 5% State. But remember that this is also taxed so it is a complex situation that GMS can help with.

Marginal Rate: Tax on Tax

This calculates the employee’s estimated taxable income before receiving the relocation expense reimbursement and then compares the estimated taxable income to the IRS Tax Tables. The tax table rate is then used to determine the tax assistance amount. The tax rate will not change for the expense and therefore is not blended.

While this method provides for additional tax protection by considering the employee’s actual income level, it will typically add to the gross-up cost for the company.

Typical methodology includes:

  • Federal Rate: Based on the higher annualized actual salary. Includes company source income only
  • State Rate: Supplemental rate of applicable payroll state
  • OASDI: 6.2% up to the applicable annual cap
  • Medicare: 1.45% + Surtax when applicable

Flat Rate

This method determines a fixed percentage to be used in the tax-assistance calculation. This option does not take deductions, exemptions, or child credits into account.

Client Directed

Because gross up is a policy decision, there are other methods available. If the methods above do not align with your objectives, we can work with you to create a custom gross-up policy that satisfies both your needs and those of your relocating workforce.

Questions Companies Should Ask When Selecting a Gross-Up Methodology

  • Why are we asking employees to relocate? Are we recruiting or downsizing? 
    • Downsizing may be saving jobs by offering employees an opportunity to relocate and remain employed with the company. Thus, a company may not need to be as generous. 
    • Recruiting may require a company to provide a more generous gross-up benefit.
  • What is the typical income of the relocating employee population?
  • What is the company gross-up philosophy?
  • Did the company request the employee to relocate or is relocation a mutually beneficial partnership?

GMS Can Help with your Tax Gross-Up Policies

At GMS, our financial services offer employees access to tools and technologies including gross-up calculators that our competitors don’t offer. On top of that, our financial team is qualified to help you implement a tax gross-up methodology that works best for your needs. Our team is always willing to field questions or concerns relating to our service offerings, including how to effectively utilize tax assistance policies for relocation programs. Reach out to GMS for any of your relocation-related tax needs.

We're Here to Help! Request a Courtesy Consultation

Are you ready to talk to a Mobility Pro? Learn how GMS can optimize your mobility program, enhance your policies to meet today’s unique challenges, receive an in-depth industry benchmark, or simply ask us a question. Your Mobility Pro will be in touch within 1 business day for a no-pressure, courtesy consultation.

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