Relocation Services Explained

You arrive at your workplace in the morning and your human resource manager calls you to their office. You’re handed a transfer letter requiring you to leave your regular place of work to a far away location, but you don’t know where to start. Don’t worry; there are the so-called relocation services. But what are they exactly? Defined, relocation services are the benefits provided by a relocation company to individuals in need of moving their homes as a result of various factors, including employment offers or job transfers.

There are two ways in which an employer can provide relocation services. In most cases, companies reimburse their employees for the full cost of home relocation. Another approach is where the employer provides a certain fixed amount of money deemed sufficient to cater for the moving expenses. As is the case with other kinds of employee benefits, relocation services are administered by different departments (e.g. finance department and human resource department) depending on the size of the company and its level of organization.

What It Entails

When relocation services are offered to employees, the employer may pay direct expenses related to relocation, including the following:

  • Fees associated with lease cancellation
  • Temporary housing or lodging expenses
  • Airfare
  • Mileage expenses
  • Expenses related to buying and selling a home, including closing costs.
  • Expenses associated with temporary storage of employee’s personal items (furniture, automobiles, etc.)
  • Shipping expenses

It is worth noting that benefits related to relocation may also include services that make the transition smooth and easy. These may cover such things as finding a new house, finding a job for the employee’s spouse, finding schools for their children, item packing and unpacking, and processing necessary documents (visa etc.).

In the event where an employer does not provide relocation services, the moving expenses may be deducted on income tax return. However, certain conditions, including the number of weeks an employee works in a year and the relocation distance.