When companies require employees to move from one location to another, they often offer a certain amount of moving allowance and allocation to assist employees in moving their homes. There are many things can go wrong when relocating a business, however it doesn’t have to be difficult when employees are preparing themselves for a move. These details offer some information on what is, and is not, an appropriate moving expense.
Which employees qualify for moving expenses varies somewhat from company to company. In general, an employee must be full time and permanent to be reimbursed for their moving expenses. Some part time employees may qualify, depending on circumstances.
Most of the time, however, employees whose moving expenses will be paid will be full time employees, often salaried, who are making a permanent move. Moving expenses can also be covered for immediate family members who will be moving with the employee.
What Moving Expenses Can Be Covered?
In general, moving expenses must be approved before they are incurred to be covered.
Specifically, professional movers will often be covered, up to a certain dollar amount. In many ways, professional movers are preferred by most companies. These movers can make the entire process easier on the employee and their family, which maintains the employee’s productivity and training at work and reduces their stress on both ends of the move.
If an employee chooses to move themselves, companies will often reimburse a certain amount of the cost of the moving truck, fuel, and mileage amount that is submitted. Employees may also be able to provide receipts for moving supplies, like cardboard boxes, packing materials, and packing tape. Often companies will only reimburse for consumable materials; when employees purchase items like plastic crates and locks which can be reused, those will generally not be reimbursed.
Transporting a personal vehicle may also be covered.
When relocating to a new city, a number of expenses, such as hotels and meals during the move, are often not covered. Employees should speak to HR about their moving plans to have a clear understanding of what will be reimbursable. This will help them avoid expensive surprises. If human resources makes an exception to a rule or reimbursement policy due to extenuating circumstances, employees should get that exception in writing to avoid future miscommunication.
Some companies have contracts with specific local moving companies; employees may only be able to use these companies, or may receive a substantial discount when they use these companies to facilitate their move.
Can Certain Travel Expenses Be Covered?
Employees often need to travel to the new location to find appropriate housing. Whether they’re buying a new home, finding a new apartment, or checking out school districts for their children, they often need to physically visit a location; only so much research can be done online. Those travel expenses, both for the employee and a spouse or additional family member, can often be covered. The time spent in the new location may be limited; employees should also confirm what travel expenses can be covered. This time may also be combined with a work trip, depending on other factors.
Are Moving Expenses Tax Deductible?
Some or all of moving expenses may be tax deductible. Companies cannot give tax advice, however; employees interested in deducting moving expenses from their taxes should speak to a tax advisor or accountant.
Moving is a complex and stressful time for employees and their families. Having moving expenses paid, either through reimbursement or up-front payment, can help reduce the stress employees feel during these situations. This can improve the employee’s productivity and reduce the strain on the trailing spouse.
What Happens to the Employee’s Old Home
If employees choose to sell their old home, they may be able to have some expenses related to the sale reimbursed. For example, realtor’s fees, appraisal, and legal fees related to the sale might be reimbursed. Points required by certain loan types may also be reimbursed.
Again, employees should make sure that HR will approve expenses before assuming that they will be covered.
Purchasing a New Home
Similarly to selling a home, purchasing a new home can come with a significant amount of legal fees. Attorney fees, applications for credit and mortgages, cost of inspections, and so forth will often be covered by a company’s moving reimbursements; equipment and appliance installations and cleaning/repair costs generally will not be covered.
Specific Policies For Renters
Renters often have a lower cost for their overall moves; they often have fewer items to move and may have an easier time finding a new home. If they need to leave at a date that will cause them to lose their security deposit, companies may be able to reimburse that amount.