A relocation package typically covers the household move, temporary housing for a limited period, and travel. It rarely covers a loss on selling a home, a spouse's lost income, or a lease break. The decisive question is tax: for tax years beginning in 2026 employer-paid relocation is taxable wages for civilian employees, so a package is worth its headline figure only if the employer grosses it up.
The tax change most people have not caught up with
The headline figure is not what arrives. Employer-paid relocation is taxable wages for civilian employees, which changes the arithmetic before you have packed anything. It appears on your W-2, it is withheld against, and most people discover this after accepting.
A $20,000 package is worth $20,000 only if the employer grosses it up. Grossing up means the employer pays the tax created by the benefit as well as paying the benefit itself, so the amount reaching you is the amount you were quoted. Without it, a five-figure package can land a third smaller than the number in the letter.
The letter will not say so, because the letter quotes the gross figure and the shortfall appears months later in a payslip. This is the single most consequential question about any relocation package and it is one sentence to ask. Everything else on this page is secondary to it.
What is usually in
The household goods move, packing, transit insurance and storage for a limited period. Travel for you and your household to the new location. Temporary housing, commonly for thirty to sixty days while you find somewhere permanent.
Sometimes a miscellaneous allowance covers the costs nobody itemizes, which is genuinely useful because those costs are real and unpredictable. For senior or international moves the package often extends further: home sale assistance, a destination services provider to find housing and schools, and shipment of a vehicle. Ask which tier of package applies to your level rather than assuming the standard one.
What is usually out
A loss on selling your home, which in a falling market can be the largest single cost of the move. A spouse or partner’s lost income, which is frequently the largest real cost of any relocation and is almost never covered by anything. A lease break penalty at the origin.
Then the smaller exclusions that add up: pet transport, and the difference between what your furniture is worth and what replacing it costs. None of these is unreasonable to raise. They are excluded by default rather than by policy, and a specific request with a figure attached is a completely different conversation from asking whether the package could be bigger.
Lump sum against managed
A lump sum hands you a figure and leaves all the logistics to you. A managed move engages a relocation company that arranges everything and bills the employer directly. The two suit different situations and neither is universally better.
Lump sums favor people moving light, moving locally, or willing to spend a weekend organizing it themselves, because anything you underspend is yours to keep. Managed moves favor households, long distances and anybody who cannot take the time off work. The risk in a lump sum is that it was quoted against a professional-move cost you never see, and it can be spent before the actual bills arrive.
The clawback
Almost every package is repayable if you leave within a stated period, commonly twelve or twenty-four months. Read whether it pro-rates across that period or is all-or-nothing at the boundary, because the difference is enormous. At month eleven of a twelve-month all-or-nothing clause, the difference is the entire amount.
Read also whether the trigger is resignation only or any separation whatsoever. A clause requiring repayment after a layoff turns your relocation package into a debt at the worst possible moment, which is a genuinely bad outcome. It is also negotiable, using the same argument as a signing bonus repayment clause: you should not owe money for a departure you did not choose.
The gross-up question decides the size
Ask directly whether the package is grossed up, and whether that covers the whole of it or only part. Some employers gross up the managed portions and not the lump sum, which is the arrangement most likely to surprise you. The part you receive as cash is precisely the part that gets taxed.
If the answer is no, the honest comparison is the package multiplied by roughly one minus your marginal rate. Quoting that number back is frequently what gets a gross-up added to the offer, because it makes visible a shortfall the employer was not deliberately creating. Most of the time nobody had run the calculation from your side.
Get the exclusions in writing before you accept
Relocation terms usually arrive in a separate document after the offer letter, and sometimes after acceptance. That sequencing means the terms get settled at exactly the point where you have the least leverage in the entire process. It is not a trick and the effect is the same as if it were.
Ask for the relocation policy alongside the offer rather than after it. If it genuinely is not ready, ask for the three or four specific items you care about to be confirmed in the offer letter itself. That request is small, reasonable, and almost always granted when made before you have said yes.
Home sale assistance, and what it actually is
Home sale assistance appears in senior packages and covers several quite different things depending on the employer. At its simplest it reimburses estate agent fees and closing costs, which is useful and straightforward. At its most generous it includes a guaranteed buyout, where a relocation company purchases the property if it does not sell within a defined window.
Those two are not remotely equivalent and both get described with the same phrase. A buyout removes the risk of carrying two properties, which is the single largest financial danger in any relocation involving a home you own. Ask which version applies, what the window is, and how the buyout price gets determined. The valuation method is where the value of that benefit actually sits.
The four questions
Four questions, all answerable in a single email. Is it grossed up, and all of it or only part. Does the clawback pro-rate, and does it trigger on any separation or only on resignation. How long is temporary housing provided, and what happens if the sale or the lease takes longer than that.
And finally, what is explicitly excluded. Every one of those four changes the value of the package materially, and none of them is an unusual thing to ask. The relocation package is one of the few parts of an offer where precise questions reliably make it bigger, because most of what is missing was never refused. It was simply never raised.
Common questions
Is relocation assistance taxable?
Yes, for civilian employees it is taxable wages and appears on your W-2. The package is worth its headline figure only if the employer grosses it up.
What does grossed up mean?
The employer pays the tax the benefit creates as well as the benefit, so the amount reaching you matches the amount quoted. Without it a package can land a third smaller.
What is usually not covered?
A loss on selling your home, a partner's lost income, a lease break, pet transport, and the gap between what your furniture is worth and what replacing it costs.
Lump sum or managed move?
Lump sums favor light, local or flexible moves — anything you underspend is yours. Managed moves favor households and long distances.
Do I have to pay it back if I leave?
Usually within twelve or twenty-four months. Check whether it pro-rates and whether the trigger is resignation only or any separation, including layoff.
Can I ask for excluded items to be added?
Yes. They are excluded by default rather than by policy, and a specific request with a figure attached is a different conversation from asking for more.
When should I ask for the relocation terms?
Alongside the offer, not after it. Relocation documents usually arrive separately and later, which settles them when you have least leverage.
How do I compare a package that is not grossed up?
Multiply it by roughly one minus your marginal rate. Quoting that figure back is often what gets a gross-up added.