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What is Relocation Bonus?
There are changing business requirements which may require some employees to relocate also. In this relocation process, they incur some cost which is bear by the company and is known as relocation bonus.
The term relocation bonus may assume many names.
It is an amount company gives to an employee based on many factors such as:
- Higher cost of living.
- The expense to find a house.
It is given to an employee who has got a transfer to a new location or to an employee who is a new joiner.
The relocation bonus can either be reimbursed by the current or new employer when you submit the related documents and receipts.
How Much Relocation Package in the USA?
There is a reimbursement of $2,000 to $100,000 offered to a candidate to cover expenses related to relocation. The amount is paid with the first payroll after applicable tax deductions.
How are Relocation Bonuses Taxed?
The taxes are exempt on relocation allowance from certain taxes arising due to additional expenses incurred by relocating to a new place which may be costlier.
It has to be noted that sometimes if the accommodation is extended for more than 15 days it can be taxed.
When is the Relocation Bonus Paid?
Relocation bonuses sometimes are paid upfront to the employee such that the employee has a budget to shift. Relocation bonus can also be paid with the first payroll tax and all the applicable taxes are deducted. It entirely depends and vary from company to company policy.
Also, See: Moving Expense Reimbursement
