Lump Sum Moving Service Defined

A lump sum relocation package is a great employee benefit. It’s an amount of money allotted to new employees who are either relocating to start a new job, or existing workers moving to a new company location.

These types of packages help to pay for expenses like packing, transportation of belongings, and unpacking. But, they may also pay for temporary lodging before staff members find their perfect home, or house hunting trips before moving day. They may even cover the closing costs of buying or selling a home, or breaking a lease.

Benefits of Lump Sum Moving Services

Why would employers essentially pay extra for workers to move? In most cases, these packages create a smooth and fast transition. That means, workers can get back to work and into the swing of things more quickly. It’s also a wonderful employee benefit that can help with retention in the company.

Lump sum moving packages also allow employees to make their own decisions regarding the move, because they do all the booking of moving services themselves. The business itself doesn’t help at all, except for giving the money. That means the workers themselves can choose what services they need and how to best spend the allotted money.

Taxes and Lump Sum Relocations

One important consideration is who will bear the tax burden – the employee or the business. If the company pays the money to the employee directly, the employee will have to pay income tax on it because as of 2017, relocation expenses are no longer tax deductible for individuals. If the company reimburses the employee’s expenses after the fact, the employee does not have to pay taxes on it as income. Some businesses prefer the latter option as well because it allows them to see exactly how the money was spent.

Lump Sum Relocation Packages

How do businesses and their teams decide on how much money to spend on a move? The average relocation package lump sum is around $20,000 for renters, and around $60,000 for homeowners.

One option for a sum is to give a flat fee to all workers regardless of status, and they have to figure out how to make the move work within that budget. However, most businesses go with a variable lump sum model. This takes into account how far the person is moving, whether they are a renter or homeowner, how many people are in the household, and the person’s position at the company. This means that the amount of money given will be different for each employee, but will be appropriate to their needs.

Other Options

Some businesses choose to provide direct relocation packages instead. This is when the business itself organizes everything for the employee. Some prefer it this way because then the worker does not have to deal with the details of the move and can focus more on their work. This is especially relevant for homeowners who may be distracted from work by trying to sell a home in a slow market, resulting in multiple trips back to the previous location after the move.

Whichever package a business decides to offer employees, Fleet 53 has great relocation options including full packing and unpacking, interstate moving, military moving, and vehicle hauling. Contact us for help with your corporate relocation!