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:
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.
There are many reasons companies relocate employees, including:
Relocating employees can be essential for business growth, but it’s not without risks.
Employee relocations vary based on duration, destination, and risk level. Each type requires different levels of support and planning.
| Type | Reason | Risk Level | Requirements | What risk? |
| Permanent | Employee moves indefinitely for a long-term role. | Medium | Full relocation package | Retention problems, breach of contract |
| Temporary | Employee transfers for a fixed period. | Low | Travel and housing support | Discrimination |
| International | Employee moves across borders. | High | Visa handling, legal compliance, cultural training | Double taxation, Permanent Establishment |
So, what are the risks? Let’s break them down.
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.
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.
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:
Unreasonable requests
A relocation request must be deemed reasonable, meaning:
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:
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.
Before we get into that, let’s look at staff relocation costs. Here’s a rough estimate of common costs:
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.
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.
Companies typically provide different employee relocation packages based on the employee’s role and location. Packages often include:
A generous relocation policy is essential for hiring and retaining the best people.
Get everything in writing; you don’t want to be accused of favouritism. Ensure the policy covers:
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.
Speak openly with the employee about the relocation package and ensure they’re willing to move.
This includes:
Once employees arrive, check in regularly. Are they settled? Is their housing suitable? Then, integrate them into the new workplace.
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.
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.
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?
Above all, open communication and a supportive culture are key. With the right resources, employees don’t just move—they thrive.
Visa and immigration compliance is essential for avoiding legal headaches and ensuring a smooth transition. Here’s what you need to know:
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.
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.
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.
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.
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.
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.
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.
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.
The most usual qualifying costs for tax-exempt relocation expenses in the UK include:
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.
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.
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