EMPLOYER TAX BRIEF
Reel in job candidates with a relocation package
Competition among employers for many types of employees remains fierce. For hard-to-fill positions, you might need to expand the search beyond your organization’s local geographic area. You may even have to offer financial incentives to lure applicants.
Although signing bonuses are an obvious choice, a strong relocation package could give you an edge in reeling in the best job candidates.
Costs to consider
When creating a package, it’s critical to establish a firm budget for the costs you’re willing and able to cover. Generally, relocation packages include coverage for moving services and transportation (such as airfare). But there are many other perks you could add, including:
- Packing and unpacking services,
- Storage expenses,
- Short-term housing, and
- Spousal employment assistance.
The size and shape of a relocation package tends to depend on an employer’s industry. The benefit you offer must be competitive with those of similar organizations in your area or it probably won’t give you the hiring edge you’re looking for.
Relocation expenses are currently deductible for the employer and taxable to the employee, similar to how bonuses are treated.
The TCJA eliminated the moving expense deduction for all employees other than active-duty military members. Keep in mind, though, that this TCJA provision is scheduled to sunset after 2025.
Going the extra mile
Nowadays, employers often have to go the extra mile to win over optimal job candidates — many of whom could live hundreds or even thousands of miles away. Our firm can help you decide whether a relocation package is a good benefits choice for your organization.