.png){kind=small}
Chat with us now!
Send Email!
What is a Relocation Bonus?
Changes in business requirements may require some employees to relocate. In this relocation process, they incur some costs, which the company bears, and this is known as a relocation bonus.
The term relocation bonus may assume many names.
It is an amount a company gives to an employee based on many factors, such as:
- Higher cost of living.
- The expense of finding a house.
It is given to an employee who has a transfer to a new location or to an employee who is a new joiner.
When you submit the related documents and receipts, the relocation bonus can be reimbursed by either the current or the new employer.
What is a Relocation Package in the USA?
A candidate is offered a reimbursement of $2,000 to $100,000 to cover relocation expenses. 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 must 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 are sometimes paid upfront to the employee, such that the employee has a budget to shift. Relocation bonuses can also be paid with the first payroll tax, and all the applicable taxes are deducted. It entirely depends on and varies from company to company’s policy.
Also, See: Moving Expense Reimbursement
