Simply put, employee relocation is when an employee, either new or existing, is moved from one location to another at the command of the company that they work for. This is generally done in order to assist in the opening of a new location, or for career development purposes. Employee relocation may also be referred to as global mobility or corporate relocation.
Relocation benefits are costs associated with moving to a new job that are incurred by the employee and paid for by an employer. Generally speaking, relocation benefits are paid to employees who are required to move to another location for work related purposes. Because relocating will cause significant expenses for an employee and their family, employees should expect their employer to pay at least a portion of the costs associated with their relocation.
The following are common examples of expenses that may be included by employer as relocation benefits:
- Moving expenses;
- Temporary housing costs, such as covering a hotel stay;
- Transportation costs, including costs associated with shipping property;
- Storage fees, if renting a storage unit is necessary;
- Real estate agent fees;
- Additional loans taken out in order to buy a house in the new location; and/or
- Assistance in paying for child care.
In terms of employee relocation rights, these are generally included in the employment contract. The terms of relocation may be outlined in the mobility clause, which states that the employee is required to relocate so long as the employer acts on the clause in what would be considered a reasonable manner. There are no employee relocation rights at the governmental level.
Am I Entitled to Relocation Benefits?
It is important to note that companies are not required to pay an employee’s relocation expenses. Even when such benefits are offered, there is frequently a considerable discrepancy associated with how much is covered or reimbursed. If an employer asks you to make an unexpected or drastic move, they may be more flexible with its benefits to compensate for opting out of an employee relocation package.
Many of the employers that do not provide relocation benefits packages for living expenses may offer a higher salary in order to compensate for increased living expenses. Or, they may offer a better comprehensive benefits package that includes:
- More vacation time;
- Improved health coverage; and/or
- Stock options.
When employers choose to offer an employee relocation package, the cost is generally dependent upon the employee’s current living situation as well as how recently they were employed.
Are Employers Required to Pay for Relocation Benefits? Are Relocation Expenses and Packages Employee Tax Deductible?
In short, no. There are no employee relocation laws in terms of state or federal laws governing the process of employee relocation. Employers are not required to pay for relocation expenses if the employee is relocated to another geographical location in order to fulfill a job, when the job is related to the employment. It is common practice for employers to notify the employee before they are hired, that the work may require travel or a possibility of relocation.
Are Moving Expenses Tax Deductible If Your Employer Doesn’t Pay
If your employer does not pay for your move, you will need to cover those costs yourself. In the past, workers could deduct moving costs on their tax returns. That is no longer the case for most people.
The Tax Cuts and Jobs Act of 2017 ended the moving expense deduction for most workers starting in 2018. The One, Big, Beautiful Bill Act of 2025 made this change permanent. This means most employees cannot deduct moving costs on their federal tax return, no matter how much they spend.
The one exception is for active-duty members of the U.S. Armed Forces. If you are on active duty and you move because of a military order for a permanent change of station, you may still be able to deduct certain moving costs. Starting in 2026, certain members of the U.S. intelligence community may also qualify.
If you do not fall into one of these groups, your out-of-pocket moving costs are not tax-deductible at the federal level. However, some states still allow a deduction for job-related moves. Check your state’s tax rules or talk to a tax professional to find out if your state offers any relief.
Does the 50-Mile Rule for Moving Expense Deductions Still Apply?
Before the 2017 tax law changes, workers had to meet certain rules to claim the moving expense deduction. These included a distance test (the new job had to be at least 50 miles farther from your old home than your old job) and a time test (you had to work full-time for at least 39 weeks in the first year after the move).
These tests no longer matter for most workers. Because the deduction itself is no longer available to most taxpayers, the distance and time rules do not apply. The only people who can still use the deduction are active-duty military members moving under official orders. Military members do not need to meet the distance or time tests to qualify.
If you are an active-duty service member, you can report your deductible moving expenses on IRS Form 3903 and attach it to your Form 1040. You cannot deduct expenses that were paid or reimbursed by the government.
Are Relocation Benefits Negotiable?
Successful negotiations are possible, and they can be influenced by your position in the company as well as your unique family or medical issues. However, company policies or resources may also impose limits on your negotiating power.
Generally speaking, relocation packages are negotiable. Also, an employer is more likely to agree on a relocation package that provides an advantage to them as well, even when doing so costs more for the employer.
How Can I Prepare a Relocation Benefits Package That Suits Me?
As the whole purpose of relocation benefits is to negotiate and receive benefits that address your needs, you should feel confident discussing these needs with your employer and asking them to provide what you require. Some examples of ways in which you can determine what kind of relocation benefits package suits your needs include, but may not be limited to:
- Determine What Assistance is Typical: Ask other people in the company that have been relocated in order to determine what types of relocation benefits and assistance they received;
- Develop Mutually Beneficial Ideas: Many companies are willing to provide relocation benefit packages when those packages also fulfill their needs. Your employer may be more willing to negotiate a deal that provides some sort of advantage for both sides;
- Focus On Your Interest: Essentially, you should focus on prioritizing your needs when negotiating. Determine what financial assistance you would need in order to relocate you and your family, considering expenses for moving as well as expenses that might occur in the future because you are in a different location; and/or
- Get The Agreement In Writing: Once you and your employer have come to an agreement on your specific relocation benefits package, ensure that the agreement is in writing. It should also provide all of the details and negotiations that were discussed by both sides.
Discussing any issues with your employer and reviewing your employment contract could help remedy any confusion. Additionally, if you are unable to resolve the issue, an employment attorney can help settle your dispute.
Do I Need a Lawyer?
If you are being asked to relocate for your job, and would like to negotiate a relocation benefit package, you should work with an experienced and local employment lawyer. Because there are no laws governing relocation and associated subjects, an area attorney will be best suited to helping you understand how best to proceed given your state’s labor laws.
Your attorney can help you negotiate a suitable benefit package, or review your current offer in order to determine if everything is legal. Your employment lawyer will also be able to represent you in court as needed.
