Industry

Relocation Bonus vs. Relocation Package

In today’s job market, it is difficult to find a qualified person who is based in the same city or even in the country where the headquarters are located. For this reason, it is very common for companies to look for a workforce abroad or relocate existing talents worldwide. Previously, we discussed the importance of relocation and how it can benefit companies and assignees

Various advantages and special offers are available to encourage people to move overseas, such as relocation packages with covered services or relocation bonuses. It is vital to understand the difference and choose the option that fits both—a company that relocates people and assignees that are going on a journey. 

What’s the difference?

In the case of a one-off relocation bonus, the employee is responsible not only for flights, accommodation, etc. but also for the taxation of the relocation allowance. If the employer chooses not to receive any tax support (gross), a percentage of the employee’s total bonus is calculated to offset the relocation bonus to be paid to the tax office. But this is only a small difference. The relocation bonus is a one-time payment, whereas the package consists of dozens of services. 

Relocation packages may include:

  • Assistance in buying/renting accommodation
  • Moving to the final destination and back
  • Transporting household goods 
  • Tax compliance assistance
  • Assistance with the relocation of family members and pets 
  • Choosing schools/kindergartens for children

Not every company can offer a comprehensive relocation package. The cost depends on the specific employee situation, their agreements with management, the size of the family, the size of the property, and much more. Also, some services may not be part of the moving packages. For this reason, some companies go the opposite way with a relocation package and offer a relocation bonus instead, with no accompanying benefits, which also may be called cash assistance/entry bonus/lump sum.

It is difficult to say which option is better because it’s a situation when one size doesn’t fit all. Basically, the more assistance you give assignees with their package, the less stressful it will be for them to relocate. On the other hand, if a one-time relocation bonus is significantly higher than the approximate estimated moving cost, the assignee might feel entitled to more and be happier with extra money. 

Service providers for international relocation  

Relocation services are often provided by an external relocation management company, but sometimes the company’s own relocation departments are responsible. In both cases, the work is carried out by specialists on-site, predominantly by phone and email, and using excel tables and Google files. This may be followed by a big amount of problems, as relocation information is stored in different places, which causes confusion and errors. 

Even a small detail might become a big issue when relocating people abroad: for example, visa non-compliance can cause a company a ban for issuing business visas from certain countries. In addition, problems can be caused when it comes to important flight details or the tough process of looking for accommodation in a foreign country. 

Easy management with Clearmove

Considering all said above, relocation isn’t easy to manage. At least, if you’re not using modern technologies. A recent option that has appeared on the relocation market is a special software helping assignees with relocation, such as Clearmove. For further information, in this article, we discussed how AI and technology can help Global Mobility. 

Clearmove, a cutting-edge technology, helps HR departments to streamline the process and avoid human mistakes. For assignees, it can help with keeping all the data in one place and an opportunity to communicate with relocation managers in the same application. Moreover, Clearmove uses a network of trusted suppliers to ensure a smooth process. This kind of software helps move people abroad way faster and with less stress. 

Interested in our revolutionary software? Contact us, and we will provide you with more details. 

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