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Employee Moving Expense-What is covered?

Employee Moving Expense-What is covered?

Employee Moving Expense-What is covered?

We have recently hired an electrical engineer and as part of his hiring package offered to cover moving expenses up to a maximum of $10,000.00.  He moved in July with his family following him the last week of September.  In addition to asking for a cashier's check to pay the moving company (which is something we agreed to pay), he submitted his apartment rent for July, August and September.  He also submitted his mileage for driving from Texas to NM and his meals while traveling-which is also fine.  He flew back to TX to drive with his wife and 22 yr. old son last weekend for the permanent move.  The house they purchased has not closed resulting in their rental of a storage unit for their furniture, etc.

Where do you draw the line on the definition of "moving expense"?  Do we pay also for mileage for driving the wife and 22 year old son's vehicle?  Their house sold in TX so there is no mortgage payment until their new home closes-do we continue paying for their apt. rent?  What about storage of their furniture?  I believe after paying 3 month's apt. rent, mileage for our employee and the mover's $6,000.00 bill, that we have met our obligation.  He also is submitting his air fare for flying back to Houston to drive them to NM because his son had a nightmare about a car accident during the move and wanted "Dad" to accompany them.  We're out about $7,200.00.  And yes, we should have defined our definition of "moving" expense.  I feel we've met our obligation.  What are your experiences and what have your employers covered?

RE: Employee Moving Expense-What is covered?

You did define the extent of the "moving expenses" in the $10,000 ceiling.  Coinsidering the importance of this new employee to your firm, I would chalk it up to experience and, as you suggest, be more definitive the next time.

I would also put a marker in his personnel file, particlulary if you feel you have been taken advantage of.  Could be of use in the future.

Mike McCann
McCann Engineering

RE: Employee Moving Expense-What is covered?

If your only qualification was a $10k max and he hasn't hit that yet, anything just inside of zany could be considered a moving expense.  Next time, though, consider laying out more specifics.

The moving van (and packing) is reasonable, as well as any flights, gas, mileage, food, etc.  A lease break fee is reasonable if agreed upon beforehand (I received a similar package at my current position).

Up to this point, things seem fine.  Personally, I would have expressed concerns for anything that went past this point.

Closing costs, storage fees, etc. are also reasonable if agreed upon beforehand.  Air fare back just because the able-bodied adult son has the willies is pushing it.

Dan - Owner

RE: Employee Moving Expense-What is covered?


Just trying to connect the dots a little bit. Is this engineer the same one that has come up in your thread: thread784-197593: Sexual Innuendos-How to Stop!!?

In some ways a learned lesson for next time. But do try to remember that one bad seed isn't representative of all of us. Not everyone will try to take advantage of kindness, but unfortunatly you've found someone who does.

Wes C.
No trees were killed in the sending of this message, but a large number of electrons were terribly inconvenienced.

RE: Employee Moving Expense-What is covered?


The IRS gives you a standard to judge by, but you have an opportunity to show him that he's a valuable addition.  You can pay $10k for a happy employee, or $5k for a pissed off one.

IMO you shouldn't have promised $10k if you weren't prepared to spend $10k.


RE: Employee Moving Expense-What is covered?

3 months of rent seems like a reasonable maximum, after 3 months he is no longer moving he is 'moved in'. It is not your companys fault that it has taken so long to settle.

The international company that we transferred with gave us 1 month to find a place, anything after that was our problem.

You really need to have a policy defined.


RE: Employee Moving Expense-What is covered?

Lots of expenses can be considered legitimate.  One company I worked for gave us an allowance for drapes, curtains, etc., reasoning that the new house needed items we would not have needed if we had not moved.  They also covered cost of applications for new drivers licenses, dog licenses, etc.  And since some of that is considered taxable income, the company bulked up the reimbursement to cover the taxes.
The movement of all household goods should be considered a reimbursable expense IMO.  Since this person has a family, all their goods have to come too.
Rental and storage need to be considered in light of the local housing market.  Here in the SF Bay area, I bid on 14 houses before I "won".  Then the sellers demanded free rent for two months after closing.  3 months apt rent may be reasonable in that case.
I think $10k is not unreasonable for a move.  In the long run, the difference is minor.
Have you sat the employee down and let them know you now consider him moved, and expense time is over?  Maybe he's waiting for someone to tell him stop.
Obviusly, you now know you need to define your company's idea of expenses.

RE: Employee Moving Expense-What is covered?

I hope you have something in your contract that says he owes the money back (prorated, if so desired) if he decides to leave the company before a set period of time... nothing like getting company 'A' to pay for the move only to start work at company 'B'.  I've seen it happen, and the profanities expressed afterwards by company 'A' are not pretty.

Dan - Owner

RE: Employee Moving Expense-What is covered?

According to that IRS page, if I'm reading it right, you need to sort out how much of his moving expenses would have been deductible and how much wouldn't have been, and report those amounts separately on his W-2.

No good deed goes unpunished.


Eng-Tips policies:  FAQ731-376: Eng-Tips.com Forum Policies

RE: Employee Moving Expense-What is covered?

Moving expenses are usually spelled out in the contract - at least it was the last time I moved. They listed those items that are covered, as well as a maximum total amount. Beyond that, I was on my own.

Some of the things covered:
- the moving company moving my stuff
- 5 days in hotel, with per diem for family, either side
- airline tickets for family

They also provided a relocation service where I was able to fly out for 1 week to look for a home with a professional relocator. I would fax them my preferences for a home (own or rent) and they would line up 4-8 visits while I was there to determine what I would like. This way, when I moved, the accomodations was already covered.

The conditions, and what is covered, I am sure varies - and I made my move many many years ago.

They cover drapes now?  Wow.

"Do not worry about your problems with mathematics, I assure you mine are far greater."   
Albert Einstein
Have you read FAQ731-376: Eng-Tips.com Forum Policies to make the best use of Eng-Tips Forums?

RE: Employee Moving Expense-What is covered?

Ashereng-they cover whatever you can negotiate for...

RE: Employee Moving Expense-What is covered?


I was coming from the otherside.

"Do not worry about your problems with mathematics, I assure you mine are far greater."   
Albert Einstein
Have you read FAQ731-376: Eng-Tips.com Forum Policies to make the best use of Eng-Tips Forums?

RE: Employee Moving Expense-What is covered?

I would look at IRS Form 521 - Moving Expenses (www.irs.gov/publications/p521/) to see what is allowed.

Also, you haven't mentioned the cost of - and lost billings from - the time he took off for his move.

RE: Employee Moving Expense-What is covered?

Would you make the same move for the same money?
I have moved a few times and wouldn't do it again for that money.
I have had some generous moves where where the employeer even paid for house hunting trips, real estate fees, mortgage differential etc. And I naver made money on any of them. When you consider all the cost there are things you never get back or never expected.  You wind up cleaning the garage and thowing away things you might have to buy again.  There's the half used boxes of cereal you throw away etc. etc. It all adds up to money you never expense.
When you relocate someone your changing their life totally not just renting their body for 40 hrs a week.  If your going big time learn the rules and customs.

RE: Employee Moving Expense-What is covered?

Yes, this does happen to be the same employee we have had the sexual innuendo problems with.

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