How to design an employee relocation package

Companies move people across borders every week. A well-built employee relocation package decides whether that move succeeds or stalls. This guide covers what to include, what to budget, and which rules apply to employers.

What is an employee relocation package?

An employee relocation package is the set of benefits an employer provides to move a worker to a new location. It usually covers travel, shipping, housing, immigration, and tax support. Employers use it to remove the personal cost and risk that a move places on the employee.

Packages differ by seniority, distance, and family situation. Therefore, most employers build tiers instead of one fixed offer.

What does an employee relocation package usually include?

Most packages combine four blocks: the physical move, settling-in support, immigration, and financial protection. Together, they form the backbone of corporate employee relocation.

• Travel and shipment of household goods
• Temporary accommodation and home-search support
• Visa, work permit, and municipal registration
• Tax advice and host-country payroll set-up
• Social security registration, including an A1 certificate for temporary EU postings
• Language training, school search, and partner career support

Family support is often the weakest block. However, a partner who cannot work creates a real retention risk.

How much is the average relocation package?

No reliable single figure exists for the average relocation package. Costs depend on distance, family size, housing market, and property ownership. A junior domestic move may cost a few thousand euros. A senior international transfer costs far more.

So instead of chasing an average relocation package benchmark, price your own scenarios. Model three moves: a single renter, a couple, and a family of four. Then add the tax gross-up, because many benefits count as taxable pay.

Three relocation package models compared

Model	How it works	Best for	Main risk
Lump sum	Fixed cash amount; the employee manages the move	Junior roles and short-distance moves	The employee overspends or skips key support
Core-flex	Fixed core benefits plus a flexible allowance	Most corporate employee relocation programmes	Needs clear rules on what the flex covers
Fully managed	The employer arranges and pays for each service	Senior and complex international moves	Highest cost and administrative load

Which tax rules shape an employee relocation package in the Netherlands?

Dutch rules let employers cover extraterritorial costs tax-free in two ways. You either reimburse actual costs, or you apply the expat scheme. That scheme currently allows up to 30% of wages tax-free for five years. From 1 January 2027, the rate drops to 27%. This applies to employees who joined the scheme from 1 January 2024.

Conditions are strict. The employee must have lived over 150 kilometres from the Dutch border. That must hold for 16 of the 24 months before hiring. Employers must also apply within four months of the start date, as Business.gov.nl confirms. So tax planning belongs in the offer stage, not in onboarding.

Does an employee relocation package need to cover immigration?

Yes, for anyone who needs permission to work. Immigration is the one part you cannot flex. Salary thresholds are fixed in law, so the offer must clear them first.

In the Netherlands, the 2026 gross monthly threshold is €5,942 for applicants aged 30 and over. For applicants under 30 it is €4,357. A reduced criterion of €3,122 applies after an orientation year. These IND amounts exclude holiday allowance. Recognised sponsors also file faster. Our guide on IND recognised sponsor status explains that advantage.

How do you write a corporate employee relocation policy?

Write the policy before the first move, not during it. Define tiers, eligibility, spend caps, and exception approvers. Then document repayment terms for an early resignation. Clear rules stop case-by-case negotiation, where corporate employee relocation budgets lose control.

• Set tiers by role level, distance, and family size
• Name one policy owner and one approver for exceptions
• State what the company pays directly and what it reimburses
• Agree the tax treatment of each benefit before you publish
• Add a clawback clause with a clear time limit
• Review the policy annually, because thresholds and rates change

What goes wrong in corporate employee relocation?

Three failures repeat. Employers underestimate the tax gross-up. They start immigration too late. They treat each move as a one-off instead of a policy. The first two cost money. The third costs credibility.

A fourth risk sits underneath. Without a local entity, you cannot legally employ someone or run payroll. An employer of record closes that gap. It becomes the legal employer, while you keep control. Our overview of global mobility services shows how the pieces fit.

Build your employee relocation package on compliance

A strong employee relocation package removes risk from both sides. It protects your new hire from unexpected costs. It also protects you from missed permit deadlines, misclassification penalties, sick pay liability, and retroactive tax collection.

Octagon has enabled cross-border talent movement since 1987, across the Netherlands, Italy, France, Germany, Cyprus, and the UK. As a recognised IND sponsor and employer of record, Octagon handles contracts, payroll, permits, and the expat scheme. Meanwhile, you keep full control over salary, benefits, and working arrangements. We carry the complexity, so your people stay at the centre of your growth.

Ready to design a package that holds up under scrutiny? Talk to Octagon Professionals.

Frequently asked questions

What is included in a typical employee relocation package?

A typical package covers travel, shipment of household goods, temporary housing, and home-search help. International moves add visa sponsorship, payroll registration, and tax support. Larger employers also fund school search, language training, and partner career help, then add a repayment clause.

How much does the average relocation package cost?

Published averages vary widely, so treat them with caution. Real cost depends on distance, family size, housing prices, and property ownership. A short domestic move sits at the low end. An international family move with tax gross-up sits far higher.

Is an employee relocation package taxable?

Often, yes. Many relocation benefits count as taxable pay unless an exemption applies. In the Netherlands, employers may reimburse extraterritorial costs tax-free, or apply the expat scheme instead. Rules differ per country and per benefit, so confirm the treatment before making the offer.

Can you relocate an employee without a local entity?

Yes, through an employer of record. The provider legally employs the worker in the host country and runs compliant payroll. You still direct the work, set the salary, and choose the benefits. This route avoids company registration, which takes several months.

What is the difference between a lump sum and a managed relocation package?

A lump sum gives the employee one fixed amount to spend as they choose. A managed package means the employer arranges and pays for each service directly. Lump sums cost less to administer. Managed packages give better control, compliance, and experience.