Employee Relocation Costs: What Employers Actually Pay
A relocation cost stack for HR: household goods from $1,688 to $25,200 by home size and distance in our model, packing labor, and the lines only policy sets.
Published September 24, 2026 · 7 min read · By My Fast Movers
The only line in an employee relocation you can price from a model before the offer goes out is the household-goods move, and it runs from $1,688 for a studio at 500 miles to $25,200 for a five-bedroom home at 2,800 miles with full-service movers in our published model. Everything else in the package is a policy decision, and the biggest of those decisions, the gross-up, multiplies all the others.
This guide builds the stack in that order: the modeled line, the labor line, the policy lines, the tax treatment, and a policy template you can adapt.
Line one: household goods, by home size and distance
Interstate movers price on weight and distance. Our model uses home size as the weight proxy, and the published range runs from 10% below the midpoint to 20% above it, because moves overrun more often than they come in under. Full-service movers, transport and loading and unloading, no packing:
| Home | 500 miles | 1,500 miles | 2,800 miles |
|---|---|---|---|
| Studio | $1,688 – $2,250 | $5,063 – $6,750 | $9,450 – $12,600 |
| 1 bedroom | $2,025 – $2,700 | $6,075 – $8,100 | $11,340 – $15,120 |
| 2 bedrooms | $2,250 – $3,000 | $6,750 – $9,000 | $12,600 – $16,800 |
| 3 bedrooms | $2,588 – $3,450 | $7,762 – $10,350 | $14,490 – $19,320 |
| 4 bedrooms | $2,925 – $3,900 | $8,775 – $11,700 | $16,380 – $21,840 |
| 5+ bedrooms | $3,375 – $4,500 | $10,125 – $13,500 | $18,900 – $25,200 |
Two things to take from the table. Distance is linear: the 1,500-mile column is three times the 500-mile column, to rounding, for every row. And home size is a multiplier on top of that, so a four-bedroom transfer at 2,800 miles ($16,380 – $21,840) is not a little more than a two-bedroom one ($12,600 – $16,800); it is $3,780 – $5,040 more.
If you hire into the same few offices repeatedly, price the routes you actually use on the state moving cost pages and put those numbers in the policy as caps, rather than a single national figure.
Line two: packing labor
Corporate moves are almost always packed by the mover, and packing is billed by the packer-hour. Using the $40–$50 per mover-hour rate from our local model, and assuming crews and hours as follows, packing adds:
| Home | Assumed crew × hours | Packer-hours | Packing labor at $40–$50 |
|---|---|---|---|
| Studio | 2 × 3 | 6 | $240 – $300 |
| 1 bedroom | 2 × 4 | 8 | $320 – $400 |
| 2 bedrooms | 2 × 6 | 12 | $480 – $600 |
| 3 bedrooms | 3 × 8 | 24 | $960 – $1,200 |
| 4 bedrooms | 4 × 8 | 32 | $1,280 – $1,600 |
| 5+ bedrooms | 4 × 10 | 40 | $1,600 – $2,000 |
The crew and hour assumptions are ours, not the model’s, so treat the right-hand column as arithmetic, not a quote. Materials are on top; unpacking, if the policy includes it, is billed the same way at fewer hours.
Put the two lines together and a three-bedroom transfer at 1,500 miles is $8,722 – $11,550 for goods and packing ($7,762 – $10,350 plus $960 – $1,200). That is the number a lump sum has to clear before it pays for a single night of housing.
The lines only policy can set
None of the following has a model price, because none is a moving service. Each is set by the employer, and each moves for a reason you can name.
- Temporary housing. Days multiplied by an extended-stay rate at the destination. The driver is the number of days you allow; an owner who has to sell needs more than a renter.
- House-hunting trip. Airfare, lodging, a car, and meals for the employee and a spouse, for one or two trips. Driven by the city pair and the season.
- Final travel. The one-way trip on the start date, with lodging if it takes more than a day. Driven by distance and family size.
- Home sale assistance. Real-estate commission and closing costs on the origin home, sometimes a loss-on-sale payment or a guaranteed buyout. This is the largest policy line for homeowners and scales with the home’s price, not with the distance moved.
- Lease break. The termination fee on the origin lease, driven by what the lease says.
- Miscellaneous allowance. A flat amount, often expressed as a fraction of monthly salary, for deposits, licenses, and small purchases.
- Relocation management fees. If you outsource the move to a relocation management company, it charges a fee per file plus a share of the services it manages. Ask for the fee schedule separately from the service costs so the two are not blended.
- Gross-up. Not a service, but the line that multiplies the others. See below.
Tax treatment: it is all wages
IRS Publication 15-B (2026), the employer’s guide to fringe benefits, says that P.L. 119-21 permanently eliminates the exclusion for qualified moving expense reimbursements from employee income for tax years after 2025; the exclusion had already been unavailable since 2018. The only exception is an active-duty member of the Armed Forces moving under a permanent-change-of-station order. For everyone else, whatever you pay, whether to the employee or to a mover on the employee’s behalf, is wages: report it, withhold on it, and pay employer payroll taxes on it.
That is the reason gross-ups exist. If the policy promises to cover the move, the employee receives the move minus withholding unless you add the tax. At an assumed combined 30% withholding rate, the gross-up multiplier is 1 ÷ 0.70, or about 1.43. Delivering the $8,625 midpoint of the three-bedroom, 1,500-mile row net costs $12,321 gross ($8,625 ÷ 0.70), of which $3,696 is withheld. The 30% is an illustration; use the employee’s actual rates or a supplemental-rate method and say which in the policy.
Budget the gross-up as its own line. A policy that lists the moving cap but not the tax on it understates the program by the multiplier.
A simple policy template
A workable relocation policy fits on two pages. The structure below is the one most mid-size employers end up with.
| Tier | Who | Structure | Usual components |
|---|---|---|---|
| 1 | New graduates, early career | Lump sum | Final travel, miscellaneous allowance |
| 2 | Professional level, renters | Capped reimbursement or direct bill | Household goods, packing, final travel, shorter temporary housing, lease break |
| 3 | Manager and above, owners | Direct bill (managed) | Everything in tier 2 plus house-hunting trip, longer temporary housing, home sale assistance, spousal support |
Then set four rules that apply to every tier:
- Caps come from the table. Set the household-goods cap per tier from the home-size row and the distances you actually transfer people across, and revisit it yearly.
- Gross-up is stated. Say whether benefits are grossed up, by which method, and whether the lump-sum tier is included.
- Repayment is written. State the period, whether it prorates monthly, whether it applies to the gross or net amount, and that it is triggered by voluntary resignation or termination for cause only.
- The mover is checked. If you contract a carrier, verify its FMCSA operating authority and safety record using the six checks, insist on a binding estimate after a survey, and keep the bill of lading on file. The largest interstate movers page shows fleet size and safety ratings for the carriers most corporate accounts use.
The corporate relocation hub covers the process from the employee’s side, which is worth reading before you write the policy they will read.
Questions people ask
How much does it cost a company to relocate an employee?
The household goods move is the only line with a model price: from our published model, full-service movers run $2,588 – $3,450 for a three-bedroom home at 500 miles, $7,762 – $10,350 at 1,500 miles and $14,490 – $19,320 at 2,800 miles, plus packing labor. Temporary housing, travel, home-sale help and the gross-up are policy lines with no model price, and the gross-up multiplies everything else.
Are employer-paid moving expenses taxable to the employee?
Yes. IRS Publication 15-B (2026) says P.L. 119-21 permanently eliminates the exclusion for qualified moving expense reimbursements from employee income, with an exception only for active-duty Armed Forces members moving under orders. Whether you reimburse the employee or pay the mover directly, the amount is wages: report it, withhold on it and pay employer payroll taxes on it.
How is a relocation gross-up calculated?
Divide the intended net benefit by one minus the assumed withholding rate. At an assumed combined 30% rate the multiplier is 1 divided by 0.70, about 1.43, so delivering $8,625 net costs $12,321 gross, of which $3,696 is withheld. State the method in the policy, whether a flat supplemental rate or a year-end true-up.
What should a company relocation policy include?
Tiers by level and by owner or renter, the structure for each tier (lump sum, capped reimbursement or direct bill), caps for the household goods line taken from a model or from real route quotes, a stated gross-up method, and a written repayment clause with its period, proration and triggers. Two pages is enough.
Should a company use a lump sum or a managed move?
Lump sums suit early-career hires with little to move; managed moves suit anyone with a household, because the employer carries the overrun and gets its negotiated carrier rates. A lump sum that is smaller than the priced move pushes the hire toward self-loading and often into a worse start.
How this was written. Every cost figure in this article comes from the same published model that powers the calculator, so it cannot disagree with the tool. We do not operate trucks and nobody pays us for placement.