Lump Sum Relocation Packages

4 Apr 2015

Lump sum relocation packages offer benefits to employees and employers alike. For employers, it is not only easier to control costs with lump sum packages, but administration of these packages is also much simpler. For employees, it places more control over the relocation in their hands and allows them to shop around for the most cost-effective relocation options. These are four primary types of lump sum relocation packages you may want to consider.

Fixed Lump Sum Relocation Programs

These packages acknowledge that the moving expenses are the same for employees at all levels of experience within the organization. As such, the relocation package involves the same lump sum payment for entry-level employees as it does for executive-level employees.

Variable Lump Sum Relocation Programs 

These packages are unique to different employees and/or transferees according to standards the company establishes. These standards may include any of the following.

  • Relocation distance
  • Renting vs. buying
  • Size of families
  • Level of responsibility within the organization
  • Salary level
  • Typical relocating costs
  • With variable lump sum relocation programs, there isn’t a one-size-fits-all employees plan and the employer sets the parameters.

Partial Lump Sum Relocation Programs

Employers can offer a lump sum payment for some of the relocation expenses and then reimburse the remaining expenses upon submission of receipts and supporting documentation. The employer decides which expenses are covered under the lump sum portion and which will require receipts for reimbursement. Typically it is recommended to reimburse the employee for non-taxable relocation expenses such as final move and household goods shipments.

Managed Lump Sum Relocation Programs 

These programs allocate a lump sum amount of funds for relocation expenses and then require employees to use third-party relocation management companies to handle the logistics of the move. This plan allows businesses to keep the required paperwork and administration of the move low, while giving employees the expertise of a professional relocation management company to facilitate the large and small details of the relocation.anatomy-1