Relocation Package
What is Relocation Package?
A bundle of benefits and allowances provided by an employer to support an employee moving to a new location, which may include moving expenses, temporary housing, travel, and settling-in support.
Relocation packages are designed to ease the logistical, financial, and emotional burden of moving to a new location for work. The scope and value of a package typically depend on the assignment type, employee seniority, family size, and the home-to-host country corridor.
Common components include household goods shipping, temporary accommodation, destination orientation services, school search assistance, spousal or partner career support, language and cultural training, and lump-sum settling-in allowances.
Organizations are increasingly moving toward flexible or core-flex relocation models, where a baseline package is provided with optional add-ons that employees can choose based on their individual needs. This approach balances cost control with personalization and employee satisfaction.
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Frequently Asked Questions
What does a typical relocation package include?
A typical relocation package includes household goods shipment, temporary housing, home finding trips, lease break or home sale support, immigration and visa fees, tax preparation assistance, language and cross-cultural training, school search, and a miscellaneous allowance for incidental costs. Senior assignments often add ongoing housing allowances and cost of living adjustments throughout the assignment period.
Why does a strong relocation package matter?
A strong relocation package matters because moving an employee internationally or across regions involves significant disruption and cost. Inadequate packages lead to assignment failure, delayed productivity, and family stress that drives early returns. Well-designed packages get employees and families settled quickly, allowing the assignee to focus on business outcomes rather than logistics.
What is the difference between a relocation package and an assignment package?
A relocation package supports a permanent move where the employee transfers fully to the new location, with benefits front-loaded and time-limited. An assignment package supports a temporary move with ongoing allowances such as housing, cost of living adjustments, and tax equalization that continue throughout the assignment. Relocation ends when the move completes; assignment compensation runs for years.
Related Terms
Total Assignment Cost (TAC)
A comprehensive calculation of all direct and indirect costs associated with sending an employee on an international assignment, used to assess ROI and inform policy decisions.
Cost of Living Adjustment (COLA)
A compensation supplement given to assignees to account for differences in the cost of goods and services between their home and host locations, ensuring their purchasing power is maintained.
Balance Sheet Approach
A compensation methodology for international assignees that aims to keep employees financially 'whole' relative to their home country, by separately tracking income, taxes, housing, and goods and services costs.
Tax Equalization
A compensation policy designed to ensure that an employee on international assignment pays no more or less tax than they would have in their home country, with the employer absorbing any difference.
Hypothetical Tax (Hypo Tax)
A notional tax withheld from an assignee's paycheck under a tax equalization policy, representing what they would have paid in taxes had they remained in their home country.