Employee Relocation: The Rules for Success in 2025

Employee relocation is an important part of doing business today, but it needs to be handled delicately. This is everything employers should know to ensure a human touch.

By Alex Schulte

31 March 2025

More employees are on the move—and for different reasons.

There are digital nomads crossing borders and state lines. Hybrid workers hot-desking a few days in the office. Go-getting executives on secondment to branch offices.   

Some are moving by choice, with 44% of companies expecting an increase in permanent voluntary relocations. But these are usually ‘lifestyle-conscious’ moves to countries with lower living costs. In other words, the company doesn’t financially reimburse such decisions.

These ‘lifestyle’ relocations are often great for digital nomads and young people, and companies support them because they’re a great way to retain talent. Some even sponsor digital nomad visas.

One thing remains the same: employees remain hesitant about company-mandated relocations.

And no wonder. Uprooting one’s life takes a toll, with stress, anxiety, and social isolation inflicted on the employee. The stats speak for themselves: 70% of relocated employees say they would have benefited from more support during their relocation.

That’s why relocation policies are changing.

Far from merely offering financial incentives, nearly half of all companies plan to increase investment in mental health and well-being programs.

Companies are also tightening their purse strings. After all, relocating costs a king’s ransom in 2025. HR teams are more closely selecting certain employees for such moves, prioritising only the most essential people.

But how?

This article shows you how to relocate employees successfully in 2025.

Let’s begin by asking:

What is Employee Relocation?

Employee relocation is when an employer moves a staff member to a new city, region, or country for work. This could be a short-term assignment or a permanent move, and it comes with its own logistical, financial, and legal challenges.

Why Relocate Employees?

There are many reasons companies relocate employees, including:

• Filling skills shortages in different branches.
• Moving operations to cheaper locations for tax or cost-saving benefits.
• Sending experienced employees abroad to train new teams.
• Reassigning staff after a merger or acquisition.
• Transitioning remote workers into office-based roles.

Relocating employees can be essential for business growth, but it’s not without risks.

Types of Employee Relocation

Employee relocations vary based on duration, destination, and risk level. Each type requires different levels of support and planning.

So, what are the risks? Let’s break them down.

The Risks of Employee Relocation

1. Tax Risks

Double taxation

If an employee spends a certain amount of time abroad—typically 180 days—they may become liable for tax in their home and host country. Some countries, like Switzerland, tax individuals after just 90 days, while South African residents cease to be taxpayers after 330 days abroad. A Double Taxation Agreement (DTA) can help offset these costs, but it’s crucial to check the local regulations.

There are other considerations, as we’ll explore later. For example, covering an employee’s relocation costs can have significant tax implications for employers and employees.

Permanent Establishment risk

An individual or company may unintentionally create a Permanent Establishment (PE) in another country if an employee conducts business activities there. For example, a UK aircraft maintenance worker stationed at a German airport was ruled to have created a PE simply by using an on-site locker! This could trigger unexpected tax liabilities for the employer.

2. Retention risks

While many employees dream of working abroad, personal circumstances often get in the way of expat relocation. Challenges like family commitments, cultural differences, and isolation can lead to dissatisfaction and high turnover rates. A poorly planned relocation can push an employee to quit rather than move.

Supporting existing employees during the relocation process can mitigate stress and maintain workforce morale, which can (sometimes) make it a more cost-effective solution for employers than hiring and training new staff.

3. Legal risks

Breach of contract

If an employment contract doesn’t explicitly mention relocation, employers still can’t force employees to relocate. You may face legal trouble if:

• The contract states remote work.
• There’s no mobility clause.
• The mobility clause is too vague (e.g., in the UK, it must specify a geographical radius).

Unreasonable requests

A relocation request must be deemed reasonable, meaning:

• Employees get ample notice.
• Justification exists (e.g., business expansion, not just cost-cutting).
• Compensation is offered where necessary.

Some countries have strict rules, like the Netherlands, where forcing an employee to move somewhere with a lower standard of living can be deemed unreasonable and lead to legal disputes.

Discrimination risks

Relocation requests must not discriminate against employees based on personal circumstances. For example:

• A remote worker caring for an ill family member.
• Working parents whose child would have to change schools.
• A spouse who is unable to obtain a visa for the host country.

Now that we’ve covered the risks, how can employers relocate employees successfully?

In short, offering a relocation allowance to help cover or assist with the costs associated with relocation.

You can kill two birds with one stone: reduce the burden on employees and provide a tangible financial benefit.

Relocation Costs for Employees

Before we get into that, let’s look at staff relocation costs. Here’s a rough estimate of common costs:

• 🏠 Selling a house: £5,000 (UK)
• 📦 Moving possessions overseas: $1,000 – $10,000 (US)
• ✈️ Travel to new location: $200 – $2,000
• 🚘 Car shipping: $400 – $5,000
• 🔐 Storage fees: $100 – $300 per month

As you can see, they run high. With such high relocation expenses, a solid relocation package is a must.

But why? Let’s go over the reasons.

Employer Responsibilities

Companies have a duty of care to support employees through the relocation process, including:

Sponsoring and paying for visas.

Covering moving expenses.

Minimising family disruption (e.g., schooling support for children).

Failing to do so isn’t just unfair—it could make the company vulnerable to legal consequences.

What Should Employee Relocation Packages Include?

Companies typically provide different employee relocation packages based on the employee’s role and location. Packages often include:

• Moving expenses (transporting belongings).
• Temporary housing costs.
• Relocation bonuses.
• Family support services (e.g., school placement for children).

A generous relocation policy is essential for hiring and retaining the best people.

Additional Support

• Financial Assistance: Amazon provides lump sums between $20,000 and $40,000 for relocations. Some companies opt for reimbursement models.
• Housing Support: Google offers temporary housing for relocating employees.
• Travel Expenses: Includes flights and pre-move visits.
• Family Support: Companies may cover school placement fees and language training.
• Spousal Employment Assistance: Many companies offer spousal employment assistance to help the spouse of the relocating individual find suitable employment, ensuring a smoother transition for the entire family.

The Employee Relocation Process

1. Establish a clear relocation policy

Get everything in writing; you don’t want to be accused of favouritism. Ensure the policy covers:

• Employer obligations.
• Duration of temporary support.
• Covered expenses (and for how long).
• Family considerations.
• Compliance with home and host country laws.

A detailed relocation policy is essential.

It ensures complete compliance with tax regulations, clarifies the covered expenses and budget limits (and who pays for what), and facilitates a smooth transition for relocating employees.

2. Review the employment contract

• Does it specify remote work?
• Does it have a mobility clause? If so, what does it say?
• Are there legal risks involved?

3. Address potential challenges

• What costs will be involved?
• Will the employee be at risk of double taxation?
• Would local hiring be a more cost-effective solution?

4. Communicate the move

Speak openly with the employee about the relocation package and ensure they’re willing to move.

5. Coordinate the move

This includes:

• Organising temporary housing.
• Handling visa issues.
• Assisting with moving logistics.
• Finding schools for children.

6. Arrival & settlement

Once employees arrive, check in regularly. Are they settled? Is their housing suitable? Then, integrate them into the new workplace.

What’s on Employees’ Minds When It Comes to Relocation?

Relocating for work isn’t just about a new job title or a fresh office space—it’s a major life upheaval. And for employees facing a move, the concerns go far beyond their career.

🏡 Housing. Finding a suitable home in an unfamiliar market is often the most stressful part of the entire process.

💰 Financial. Can they maintain their current standard of living in a pricier city? Will the cost of moving strain their budget? 

🥳 Social. And what about their social life? Leaving behind a strong community and support network can be daunting.

For international relocations, these concerns multiply. A new culture, an unfamiliar language, different social norms—it’s a lot to take in.

Older, more established employees often hesitate the most. With deeper roots—homeownership, family commitments, long-standing friendships—picking up and starting over isn’t easy.

What makes relocation even harder? 

• Poor planning. When companies fail to provide clear guidance or set unrealistic expectations about a new role or location, employees feel lost. 
• Miscommunication. Bad communication between HR, relocation management teams, and the employee can turn an already stressful experience into a frustrating one. 
• A poor relocation package. Failing to cover key costs or address specific needs may leave employees feeling unsupported from the start.

Then, there’s the often-overlooked factor: the spouse or partner. If they’re unhappy, the entire relocation can fall apart. That’s why offering support for the whole family, not just the employee, is so crucial.

The human side of relocation: supporting employee well-being

Relocation isn’t just a logistical move—it’s an emotional upheaval. Employees face stress, anxiety, and even grief as they leave behind familiar places and social circles. Loneliness, culture shock, and uncertainty can take a toll, affecting productivity, engagement, and job satisfaction.

70% of relocated employees say they needed more support. Companies are taking note, with nearly half (49%) planning to increase investment in well-being initiatives. Why? Because employees with strong mental health support adjust faster, experience less stress, and stay productive.

The solution? 

• Offer professional counseling, resilience training, and Employee Assistance Programs (EAPs). 
• Support families with childcare, schooling, and spousal job assistance. 
• Flexible work options and regular check-ins can also ease the transition.

Above all, open communication and a supportive culture are key. With the right resources, employees don’t just move—they thrive.

Visa and Immigration Considerations in Employee Relocation

Visa and immigration compliance is essential for avoiding legal headaches and ensuring a smooth transition. Here’s what you need to know:

1. Get the right visa

Different roles, nationalities, and durations require different visas. Get them right, or you’ll be uncompliant. 

For example:

👷 Work visas – Essential for legal employment in the host country (e.g., H-1B in the U.S., Skilled Worker visa in the UK).

🏢 Intra-company transfer visas – Ideal for multinational employees on temporary assignments.

🏠 Temporary residence permits – Often linked to work visas for extended stays (e.g., Spain’s Visado Nacional).

👪 Family/dependent visas – Necessary for relocating spouses and children.

2. Avoid legal risks

Immigration laws are strict, and non-compliance can lead to fines, visa rejections, or even deportation. Here’s how to stay on top of it:

✅ Keep documentation in check – Valid passports, employment verification, financial records, and travel itineraries are must-haves.

✅ Track timelines – Monitor visa expiration dates and renewal deadlines to prevent costly lapses.

3. How to mitigate those risks

Reduce delays and compliance risks with these best practices:

🔹 Partner with experts – Immigration consultants and legal advisors streamline applications.

🔹 Use tracking tools – Automated systems and AI travel assistants help monitor visa and permit deadlines.

🔹 Conduct pre-departure checks – Ensure all paperwork is in order before travel.

Make Relocation A Bedrock of HR

The best advice we can give you is to view employee relocation as part of a wider HR strategy. Employees want to travel. But they also want to move to destinations for a better lifestyle.

By tailoring your strategy to fulfill those needs—and by offering the right incentives, financial renumeration and ensuring 100% compliance—you can make relocation a painless process.

If you do it well, you’ll never have a problem with retention. In today’s competitive job market, providing competitive relocation packages is crucial for attracting and retaining top talent.

Planning an international relocation? Chat to one of our experts today—we’ll help you get your employees 100% compliant.

Frequently Asked Questions (FAQs)

How can I cut relocation costs?

Offer a lump sum instead of reimbursing expenses one by one, negotiate moving discounts, and provide temporary housing. Encourage employees to declutter before moving and plan relocations during off-peak seasons for better rates.

How much does it cost to relocate an employee?

Costs vary. Domestic moves range from $2K to $84K, while international relocations can exceed $100K due to visas, housing, and cultural training. Packages are often tailored to budget and employee needs.

Can an employer force an employee to relocate?

Not unless the contract says so. If relocation is required, refusal may lead to termination, but many companies offer incentives like salary bumps or moving support to ease the transition.

Are relocation expenses tax-deductible?

In the US, all relocation reimbursements are taxable by the IRS and only active-duty military members qualify. Some relocation expenses up to £8,000 are tax-exempt in the UK. These must be identified as qualifying costs.

What relocation costs are qualifying costs in the UK?

The most usual qualifying costs for tax-exempt relocation expenses in the UK include:

• Physical removal of possessions
• Insurance of belongings
• Storage
• Travel expenses
• Relocation company’s management fee.

Do companies have to pay for employee relocation?

No legal obligation, unless stated in a contract. However, many businesses cover moving costs to attract and retain talent, offering anything from basic support to full-service relocation packages.

How long does employee relocation take?

Domestic moves usually take 2–3 months. International relocations? Six months or more, factoring in visas, housing, and cultural adjustments. Flexibility helps ensure a smooth transition.