Employee moving expenses explained

Moving for a business is overwhelming for both the employer and the employee. On their part, employers have several problems to deal with. Firstly, they need to think of the best way to make their employees willing to move. Secondly, the conditions they provide for the move must be such that their employees are still satisfied and willing to do their best for the company. Finally, if it is necessary to move the office too, the employer has to search for reliable office movers New York for the job. On the other hand, employees have their troubles. Many are not willing to start from scratch in a new place. They think about how the move will affect their family. Will the new home be appropriate? In the end, the employee moving expenses are a crucial factor too when making a decision.

Who pays for the employee moving expenses?

Mostly, employers are those who pay for the employee moving expenses. However, they aren’t obliged to do that. The decision is theirs completely.

It is important to know who pays for the employee moving expenses.
Mostly, employers are those who pay for the employee moving expenses.

How do employers regulate the employee moving expenses?

Employers can handle the employee moving expenses in several different ways. They can:

  • Pay all or some of the employee moving expenses directly
  • Reimburse the employee for all or some of the moving expenses
  • Offer a set amount for employee moving expenses
  • Offer a job relocation package

Paying for the employee moving expenses directly

When the employer decides to pay all or some of the expenses directly, employees are just observers of their move. They don’t have to worry about moving companies prices or dealing with rogue movers. Employers go through all the trouble of finding reliable movers and paying for the service provided.

Reimbursement for all or some of the employee moving expenses

With reimbursement, the situation is a bit different. The employee has to organize the move and pay for the expenses. Then, the employer reimburses the employee for the expenses.

Accounting procedure for reimbursement

There is a standard and inevitable procedure for employee moving expenses reimbursement. It includes the following:

  • The employee must provide all the receipts for all expenses within a reasonable period of time. So, don’t forget to take a good care of all the receipts.
  • When the employer gives the employee money in advance, the employee must return any excess money. Understandably, this should be done within a reasonable period of time.
Always save the receipts of the employee moving expenses.
For reimbursement, the employee has to provide all the receipts for all the expenses.

Providing a set amount for the employee moving expenses

Some companies have the policy to provide their employees with a set amount for the move. This amount is taxable to the employee as a benefit. Also, federal income tax must be withheld on the payment. Accordingly, some companies add an additional amount to the payment to help employees with the taxes they have to pay. To calculate the whole amount,  employers use gross up calculators. In the end, the employee isn’t at a loss after paying taxes.

Job relocation package

Job relocation package is always negotiable. Mostly, it includes the expenses for the following:

  • Finding a new home – The employers are willing to pay for your trip to the new location to find a new home. If you need to stay at a hotel for some reasonable time, the employer will cover those costs too.
  • Selling your current home and buying a home at the new location.
  • Searching for a proper job for your spouse or a partner.
  • Transportation – Employees sometimes move to their new location by car, train or airplane. Meanwhile, professional movers take their items to the new location by a moving vehicle. In this case, employers cover the expenses of transportation separately.
  • Temporary residential housing – It often happens that employees have to move, but their new home isn’t ready to move in. Then, employees and their families have to find an alternative for a while. Usually, they stay at a temporary furnished rental housing their employers provide and pay for. Alternatively, they can stay at a hotel, but it is more expensive and yet less comfortable. When it comes to their items, storage professionals are there to give advice and take care of them.
  • The move – Employers handle the costs of a moving truck and related expenses.
  • The packing and unpacking services. – The company fully covers the expenses of packing and unpacking your belongings. They send professional movers to your current address. You don’t have to know how to label moving boxes like a pro. They do it for you. Plus, they load them onto moving vehicle, unload them and, finally, unpack.

How to negotiate your job relocation package with the employer?

To make sure what your employer offers within a job relocation package, ask questions and clear away your doubts. Remember that employers don’t have to pay for any of the employee moving expenses. A job relocation package may include all the above-mentioned points, but some may be excluded as well. Furthermore, you should do some calculations and get a precise moving price. Then, you can provide your employers with the necessary information. In the end, get the details about a job relocation package in writing. This way both you and your company will be clear on expectations and coverage.

The deatils of a job relocation package in writing
Get details about the job relocation package in writing to be clear about expectations and coverage.

Tax-deductible employee moving expenses

Up to 2018, it was possible to deduct some of your job-related moving expenses from your taxes according to The Internal Revenue Service. However, there have been some changes in the law. The deductions for the employee moving expenses have been suspended until 2025. So, don’t expect any deductions until 2026.

Summary

The employee moving expenses aren’t a reason to worry when you move for a business. Your employer is most often the person who covers all these expenses. There several different ways to handle them, and your company will choose accordingly. Finally, you have a chance to enjoy the advantages of professional movers over DIY moving. Furthermore, your company handles the pre-relocation expenses as well. The only disadvantage is that starting from 2018, the employee moving expenses aren’t tax-deductible any longer. Nevertheless, we can do well this way too, can’t we?