You’re facing a familiar challenge: a key employee accepted a transfer to your Pittsburgh office, and now HR needs to handle the move. The questions come fast. What should the relocation package include? How much will this actually cost? And why is everyone suddenly talking about “tax gross-ups”?
If you’ve been through this before, you know that corporate relocation packages aren’t just about moving boxes. They’re about keeping talented employees happy while managing costs and staying compliant. When done right, corporate relocation packages Pittsburgh companies offer become powerful retention tools. When done wrong, they create frustrated employees and budget overruns.
What Corporate Relocation Packages Actually Include
Corporate relocation packages typically cover the expenses employees face when moving for work. The specifics vary widely, but most packages address similar core needs.
Standard packages cover moving company services for household goods, transportation costs for the employee and family, temporary housing during the transition, and sometimes home sale assistance. More comprehensive packages might include spouse job search support, school search assistance for children, and cultural training for international moves.
The real question isn’t what could be included—it’s what should be included for your specific situation. A junior employee moving from an apartment needs different support than a director relocating a family with school-age children.
The Tax Treatment Reality Every HR Pro Should Know
Here’s where it gets complicated. Since 2018, the Tax Cuts and Jobs Act changed everything about how relocation benefits are taxed.
Before 2018, qualified moving expense reimbursements weren’t taxable to employees. Employers could deduct them as operating expenses, and employees didn’t pay taxes on the benefit. Those days are gone.
Now all relocation benefits are considered taxable income to the employee, whether you’re reimbursing expenses, paying vendors directly, or providing a lump sum. That $5,000 moving benefit? It shows up on the employee’s W-2 as additional income. They’ll pay federal income tax, state income tax (in most states), and FICA taxes on that amount.
This creates a problem. You’re trying to help employees relocate, but suddenly they’re facing an unexpected tax bill. A $5,000 lump sum in the 32% tax bracket nets the employee only $3,400—losing $1,600 to taxes.
Most competitive employers solve this with tax gross-ups. You increase the relocation benefit to cover the taxes, so employees receive the full intended amount. That same $5,000 benefit grossed up costs the company $7,352, but the employee gets the full $5,000 after taxes.
It’s more expensive, but it protects the goodwill you’re trying to create. Nothing undermines a relocation package faster than an employee discovering they owe taxes on their “benefit.”
Lump Sum vs. Managed Relocation Programs
You’ve got two main approaches to structuring corporate relocation packages Pittsburgh businesses use most often.
Lump Sum Packages
You provide a fixed amount of money—say, $10,000—and the employee manages their own move. They choose the moving company, book their own travel, and handle the logistics.
The advantages are clear. Costs are predictable and controlled. Administration is simple. Employees have flexibility to spend money where they need it most. Some will spend less and pocket the difference, which they see as a bonus.
The downsides matter too. Employees bear all the responsibility and stress. Quality varies based on their vendor selections. And you’ll still need to gross up for taxes, which increases the actual cost.
Managed Programs
With managed programs, your company (often through a relocation management company) coordinates services directly. You book the moving company, arrange temporary housing, and handle logistics. The employee participates but doesn’t manage the process.
These managed services are taxable to the employee based on the value of benefits provided, but you maintain quality control and can often negotiate better vendor rates through volume contracts.
The choice often comes down to employee level. Entry and mid-level employees often prefer lump sums—they’re simpler and feel like money in hand. Senior executives and employees with families typically prefer managed programs—they don’t have time to coordinate a complex move while starting a new role.
Building a Tiered Package Strategy
Smart companies don’t offer the same package to everyone. They build tiers based on employee level and move complexity.
A typical three-tier structure might look like this:
Entry Level ($3,000-$7,000 lump sum): Covers moving company for apartment-sized household goods, one-way flight, and 5-7 days temporary housing. Assumes minimal belongings and simpler logistics.
Mid-Level ($10,000-$20,000 managed or lump sum): Covers full household move, family transportation, 30 days temporary housing, and basic home-finding support. Addresses family needs without executive-level services.
Senior Level ($25,000-$50,000+ managed program): Comprehensive support including household goods shipment, home sale assistance, spouse career support, school search services, and up to 90 days temporary housing. Removes relocation stress entirely.
These ranges vary by geography—moving to Pittsburgh from across the country costs more than a local transfer within Pennsylvania. High cost-of-living areas require larger packages than more affordable regions.
Choosing Your Moving Partner in Pittsburgh
When you’re ready to select a moving company for corporate relocations, you’ll want a partner who understands business needs, not just residential moves.
Look for companies with dedicated corporate relocation coordinators who can work directly with your HR team and transferring employees. You need reliable communication, transparent pricing, and the ability to handle both local Pittsburgh moves and long-distance relocations.
Professional moving companies assign devoted Relocation Managers responsible for smooth operations, working closely with clients and specialist team members to ensure satisfaction. This coordination matters when you’re managing multiple employee relocations or handling executive-level moves that require white-glove service.
Ask potential moving partners about their experience with corporate accounts, their claims process for damaged items, their insurance and liability coverage, and whether they can accommodate your specific timing needs. Many businesses need flexibility around start dates and temporary storage options.
Volume matters too. If you relocate employees regularly, negotiate corporate rates. Many Pittsburgh moving companies offer preferred pricing for business accounts that generate consistent work.
The Real Cost of Getting This Wrong
I’ve seen companies try to save money with bare-bones relocation packages. The employee accepts the role, struggles through a stressful DIY move, arrives frustrated, and spends their first month settling family issues instead of focusing on work. Sometimes they don’t stay long.
Relocation packages are investments in employee retention and productivity. Companies should consider relocation an investment in employee loyalty and productivity, as well as an investment in the business’s future. A well-structured package pays dividends through faster onboarding, higher satisfaction, and better retention.
The employees most likely to relocate for your opportunity are often your highest performers—the ones with options. They’re evaluating your company culture through this process. A generous, well-managed relocation package signals you value them. A chaotic, insufficient one sends the opposite message.
Building Your Pittsburgh Relocation Policy
Start by benchmarking. What are similar companies in your industry offering? Talk to your finance team about realistic budgets. Then build a clear policy that you can apply consistently.
Document your tiers, what’s included in each, eligibility requirements, and repayment clauses if employees leave within a certain timeframe. Many companies require employees to repay relocation costs if they leave within 12-24 months.
Partner with a reputable Pittsburgh moving company that understands corporate needs. Test the process with your own transfers before rolling it out widely. Gather feedback and refine.
And always, always address the tax implications upfront. Include tax gross-ups in your budget planning. Nobody wants surprise tax bills derailing what should be an exciting career move.
