Relocation Policy Compare — Plan A vs Plan B
Model two employer relocation policies side by side: lump-sum vs actual-expense reimbursement, temporary-housing days, and shipment weight limits. The report shows total offer value, estimated employee tax, after-tax take-home, and the gross-up an employer would need to make the employee whole — printable for your HR file.
| Measure | Plan A | Plan B |
|---|---|---|
| Total nominal offer value | $13,625 – $17,558 | $17,438 – $23,336 |
| Taxable portion (planning band) | $13,600 – $17,500 | $11,400 – $23,250 |
| Estimated employee tax (22–37% fed +5–13% state band) | $3,672 – $8,803 | $3,078 – $11,695 |
| Employee after-tax value | $4,823 – $13,886 | $5,743 – $20,258 |
| Gross-up needed for full after-tax value (planning band) | $13,764 – $5,030 | $11,538 – $4,216 |
A $10,000 lump sum is not $10,000 to the employee. At a combined 30% federal + state rate they keep about $7,000. A grossed-up policy costs the employer roughly $14,300 to deliver the full $10,000. Use the report to compare policies on after-tax employee value, not sticker price.
Why weight and temp housing change the math
A shipment weight allowance is usually the least visible line on a relocation offer. At the site's FMCSA/HHG linehaul benchmark, 7,500 lb of household goods is worth roughly $375–$860 in transport value — enough to swing a close comparison. Temporary housing is often the largest line: 45 nights at an extended-stay rate of $120–$250 a night is $5,400–$11,250. Both are estimated here with clearly labeled planning bands.
Frequently asked questions
Is a lump-sum relocation payment taxable?
Generally, yes. Lump-sum relocation payments are treated as wages and reported on the employee's W-2. The employee keeps the amount after federal and state income tax, plus payroll taxes. The tool uses a 22%–37% federal marginal-rate band plus the state top-marginal rate as a planning estimate.
Are relocation expense reimbursements taxable?
Often, but not always. Under the Tax Cuts and Jobs Act, most employer-paid moving expenses that were previously excluded are now treated as taxable compensation. When the employer pays a third party (like a carrier) directly, the value can still be non-taxable in many cases. The rules are nuanced — consult a tax professional.
What is a gross-up?
A gross-up is an extra payment the employer adds so the employee keeps the full intended amount after tax. For example, at a 30% combined rate, grossing up a $10,000 payment costs the employer about $14,300. The tool shows the planning band for each plan.
Should I offer a lump sum or reimbursement?
Lump sums are simple, predictable, and easy for employees to understand, but they are fully taxable and can be spent on non-moving items. Reimbursements tie the money to actual costs but create paperwork and can leave employees out of pocket. Many employers offer a hybrid. The right choice depends on the move type and the employee population.
Is this a quote or tax advice?
No. Every figure is a planning estimate. Tax implications vary by payment structure, state, and tax year. Have your compensation and tax teams (or a tax professional) review any final policy.
Related tools & guides
- Full relocation budget calculator — move plus first-year housing and tax deltas.
- Employee relocation guide — policy design, tax, and duty-of-care.
- Mover license check — verify any moving company before booking.