A lump sum relocation package is one of the most widely used ways to support a relocating employee. It is simple to administer, gives employees choice and helps organisations keep relocation costs predictable.

The challenge lies in setting the right amount. Too little, and the employee may struggle to cover the move. Too much, and the organisation spends more than it needs to. This guide explains how to calculate a lump sum relocation amount and structure a policy that works for both sides.

What is a lump sum relocation package?

A lump sum relocation package is a single, fixed payment an employer gives a relocating employee to cover the cost of their move. The employee then decides how to spend it, whether on movers, temporary housing, travel or other moving costs.

Lump sum vs managed vs core-flex relocation

Lump sum, managed and core-flex are the three most common ways to structure relocation support. The table below compares them.

Area	Lump sum	Managed	Core-flex
How support is given	Fixed cash payment	Services arranged and paid by the employer	Core services plus a flexible budget or menu
Employee choice	High	Lower	Balanced
Cost predictability	High	Varies by move	High for core, controlled for flex
Administration	Low	Higher	Moderate
Best suited to	Early-career and simpler domestic moves	Senior and international moves	Organisations wanting control and flexibility

For a full breakdown of how core-flex relocation works, see our guide on our core-flex relocation programmeand for a full breakdown of how relocation policy types are structured across the programme, see our guide on types of relocation policies.

How to calculate a lump sum relocation amount

Calculating a lump sum relocation amount means estimating the realistic cost of the move and adding an allowance for tax where the payment is taxable. The following factors have the biggest influence.

1. Move distance and household size

Move distance and household size drive the cost of shipping household goods. A single employee moving a short distance needs far less than a family moving across the country.

2. Destination cost of living

Destination cost of living affects temporary housing, deposits and settling-in costs. Cost-of-living data from providers such as AIRINC and ECA International helps organisations set amounts that reflect real local prices.

3. Temporary housing and travel

Temporary housing and travel cover the period between leaving the old home and settling into the new one. This includes flights or mileage, short-term accommodation and meals during the move.

4. Tax gross-up considerations

A tax gross-up is an additional payment that covers the tax due on a relocation payment, so the employee receives the intended net amount. Whether to gross up a lump sum is a policy decision, and organisations should confirm the treatment with their tax adviser.

Average lump sum relocation package ranges

Average lump sum relocation package ranges vary by employee level, move distance and location. Benchmarking data from WERC and AIRINC is the most reliable way to set ranges for your organisation.

How to structure a lump sum relocation policy

A well-structured lump sum policy sets clear rules on who qualifies, how much they receive and when the money is paid.

1. Eligibility tiers

Eligibility tiers group employees by level or move type and assign a lump sum amount to each. Common tiers include early-career, mid-level and senior, with separate amounts for renters and homeowners.

2. Payment timing

Payment timing sets when the employee receives the lump sum. Many organisations pay before the move so employees can book movers and housing, while others pay in instalments.

3. Repayment agreements

A repayment agreement sets out when an employee must return some or all of the lump sum, for example if they leave the organisation within a set period after the move.

For a detailed guide on how repayment agreements work across global mobility programmes, see our guide on repayment agreements in global mobility.

Pros and cons for employers and employees

Lump sum packages offer clear benefits and a few trade-offs.

For	Benefits	Considerations
Employers	Predictable cost, simple administration	Less visibility of how funds are used
Relocating employees	Freedom to choose providers and spend	Responsibility for planning the whole move

Supporting employees who receive a lump sum

Supporting employees who receive a lump sum helps them use the payment well and settle in faster. Self-service tools, move guides and access to vetted suppliers give employees confidence without adding administration for HR.

How MovePlus supports lump sum relocation programmes

MovePlus helps organisations design lump sum policies that are clear, scalable and aligned with destination-specific considerations. MovePlus offers self-service options for employees on lump sum packages, alongside full-service support where needed.

Through the MOVEPLUS™ platform, HR and mobility teams can capture relocation-related financial data, track approvals and gain visibility of lump sum spend and trends across the programme. For more on the platform, see our comprehensive mobility management platform.

Get in touch to discuss how MovePlus can support your programme.

Frequently asked questions

1. Is a lump sum relocation payment taxable?

In most cases, yes. In the US, relocation payments are generally treated as taxable income. In the UK, some qualifying relocation expenses may be exempt up to a set limit. Organisations should confirm the treatment with their tax adviser.

2. What is a typical lump sum for a domestic move?

A typical lump sum depends on employee level, household size and move distance. Benchmarking data from WERC and AIRINC is the best guide for setting amounts.

3. Can a lump sum be combined with managed services?

Yes. A core-flex policy combines core managed services, such as household goods shipment, with a flexible budget or lump sum for other costs.

4. Who decides how a lump sum is spent?

The relocating employee decides how to spend the lump sum, within any guidance set out in the organisation’s policy.