Employees being relocated to new locations by employers may receive a lump sum employee relocation allowance to cover the cost of such a move. This payment allows employees to move their household and family on their own or seek the help of local corporate moving services or long distance corporate moving companies. To maximize this lump sum payment will require good management and the help of experienced corporate moving services that understand how such financial packages work.
Lump Sum Relocation Packages
A lump sum relocation package is an allotted amount of money that a company provides to employees when a corporate relocation is required. This amount of money is provided to cover any packing, moving, and storage expenses as determined and agreed upon by employees and employers, both working within the allotted amount. This is sometimes challenging and may require working with expert long distance moving companies who understand the limitations of such packages and can provide a comprehensive service for the allotted sum.
Payment of Lump Sum Relocation Packages
When employees receive lump sum relocation packages, how such benefits are paid is important. There are typically three ways in which moving benefits are provided:
Payment to the Employee As Cash – A lump sum paid to the employee is a simple way for employers to pay this benefit; however, employees are then required to file this amount as income that is compared to the actual moving costs. Any amount of money received that is over the actual cost will be listed as employee income and be subject to taxes having to be paid on that amount.
Direct Payment to Moving Company – When long distance and local corporate moving companies bill employers directly, the employee does not have to deal with paying the moving company for their services directly, which eliminates the problem of it being income subject to taxation.
Refunded to the Employee As An Expense – Submitting moving expenses for reimbursement avoids taxation and covers when moving companies are unwilling to direct bill an employer. The downside is that the employee must initially pay for their own move.
It is important for employees to understand the differences in these three methods before starting to search for the best corporate moving services.
Corporate Moving Companies and Lump Sum Relocation
The most experienced corporate movers understand how to plan a relocation move on a required schedule and can design a plan that meets the amount allowed by lump sum relocation packages. It is best to work with reputable corporate moving services that handle lump sum moves. This will avoid the dilemma of movers that provide a low estimate and then are ‘forced’ to charge extra for things not covered on the original contract.
For the most trouble-free company relocation, employees should find a corporate moving service that offers various options that work within a relocation package amount. Many long distance corporate moving companies and local corporate moving services are efficient at completing employee moves faster and less costly than other movers. Employees receiving some type of relocation benefit should always look into these services first when shopping for the best moving service to help them with their move!