Best-case scenario: you rent, so the move will cost you only $13,000 to $20,000. If you�re a homeowner moving yourself, you could be out $53,000 to $65,000. Whether it�s a big-ticket item like selling your existing home and buying another in the destination city, or the little ticket-items like getting a driver�s license in a new state, relocation costs quickly add up. That�s why it�s so important to negotiate for the biggest relocation package you can get when you�re considering taking an out-of-town position. �A company will never cover everything and it�s almost impossible to be made completely whole,� warns Lina Paskevicius, manager, consulting services for Cendant Mobility in Danbury, Connecticut.
If you�re going to work for a large corporation, you�ll likely find that benefits are tiered and the higher up the corporate ladder you go, the better your benefits get. �In today�s environment, there�s less negotiating,� says Fran Kastengren, a business development consultant with Runzheimer International in Rochester, Wisconsin.
So what does the Average Joe get? Paskevicius says a typical mid-level manger package for a homeowner would include the following reimbursement:
- Costs to sell the old home and buy a new one
- A 1% origination fee
- One six-day home-hunting trip
- For renters, the cost to break a lease and rent a new apartment and a four-day apartment-hunting trip
- Both renters and homeowners would get shipping for household goods, including packing, shipping and partial unpacking and temporary living expenses for a month or two (plus storage for your stuff), for those who can�t get into the new home right away
Soften Your LandingTo cushion the financial blow of moving, most companies offer a miscellaneous allowance to cover the endless fees you�ll pay when you move: utility hook-up fees; the tuition your child�s school won�t refund and the cost of getting new keys for the front door.
�In a mid-level manager, it will typically be one month salary for homeowners and a half month�s for a renter, but some companies treat renters and homeowners the same,� says Paskevicius, adding that there�s a trend toward companies capping miscellaneous allowances at around $5,000.
The Tax Man Cometh
Knowing that there�s no such thing as free money, you won�t be surprised to hear that Uncle Sam will expect to collect his share of your relocation benefits. An employer that moves a lot of people will likely structure the benefits in a tax-advantageous way, which usually means they pay the moving company and the real estate agents directly, instead of reimbursing you.
Be aware that a lump-sum payment for relocation expenses�offered by about 10% of companies�is taxable income, says Kastengren. Some companies give you extra money to pay the tax on the money they�re giving you � a task known in the relocation industry as �grossing up� the employee. And yes, your gross-up is taxable, too.
When Nothin� is What You�re Getting
What should you do if you�re negotiating with a company that wants you to move, but doesn�t offer relocation benefits? �Ask for the elements of the relocation that would be costly to absorb, such as household goods moving, home-sale and home-finding assistance at the new location,� suggests Anita Brienza, spokesperson for the Employee Relocation Council, Washington, D.C.
As for convincing the company to pay, �That depends on whether the individual is clearly the best person for the job,� she adds. �Companies are more likely to pay for relocation assistance if a lack of coverage impedes their ability to get the best candidate.�
Margery Marshall, president, Prudential Relocation, Newark, New Jersey, says you can also ask about freebies. 'Even if your company refuses to cover some or all of your relocation costs, inquire whether self-service resources are available, perhaps through the company's relocation services provider.�
�Today, many companies are able to leverage their relocation volume with their supplier network to offer rebates and discounts on move-related services,� Marshall says. �Even if the company is not picking up the tab, at least you'll find you have access to reputable and dependable resources, and better yet, you may save significant costs.�