Free Relocation Pay Calculator: Take-Home From a Moving Package
A relocation package sounds generous until taxes come out. Enter the amount your employer is offering, the withholding rates, and what the move will really cost you, and see the estimated take-home and whether it covers the move.
It runs in your browser. Nothing you type is saved or sent anywhere. The numbers filled in below are a made-up example; change them to yours.
22% is the flat rate many employers use for bonuses and other supplemental pay.
Use 0 if your state has no income tax.
What the move will cost
| Cost | Amount, $ |
|---|---|
How is relocation pay taxed?
For most employees, money an employer pays for a move counts as wages. That includes a lump sum, a reimbursement, or the employer paying the movers directly. Federal law has treated these payments as taxable since 2018. The main exception is active-duty military moving under orders. Employers often withhold federal tax at the flat 22% supplemental rate, plus 7.65% for Social Security and Medicare, plus any state tax. So a $5,000 package can arrive as roughly $3,300 to $3,500. Withholding is not your final tax bill; your actual tax is worked out when you file.
How the math works
- Total withholding % = federal % + Social Security and Medicare % + state %.
- Take-home = package × (1 − total withholding %). If the package is grossed up, take-home = the package amount.
- Left over (or short) = take-home − the moving costs you list.
- Package needed to break even = your moving costs ÷ (1 − total withholding %).
Example (made up): a $5,000 lump sum with 22% federal, 7.65% FICA and 4% state withholding is 33.65% withheld, so about $3,317.50 lands in your account. The four costs in the example add up to $5,550, so the package is about $2,232.50 short. To net $5,550 at the same rates, the package would need to be about $8,365.
Lump sum, reimbursement or gross-up
Employers usually offer relocation help in one of three ways:
- Lump sum. You get a set amount, usually in a paycheck, and you spend it however you like. Taxes come out first, so what you see is less than the offer letter says.
- Reimbursement. You pay first and send receipts. The reimbursed amount is still usually added to your taxable wages, so check whether the employer withholds on it or adds it to your W-2 at year end.
- Direct billing or a gross-up. The employer pays the moving company directly, or adds extra money so the tax is covered. A gross-up is the closest thing to getting the full number. Ask HR which one you are getting. The wording in an offer is not always clear.
Costs people forget
A relocation budget is more than the moving truck. Common extras are a few nights in a hotel or short-term rental, meals on the road, shipping a car, utility deposits and setup fees, a new driver's license and registration, overlapping rent if your old lease doesn't end in time, and a lease-break fee. Add them to the table above so the shortfall number is honest. If you're moving out on your own for the first time, the moving out cost calculator covers the monthly side: rent, utilities, groceries and what to save before you sign.
Questions to ask before you accept
- Is the amount before or after taxes, and is it grossed up?
- Is it paid up front, in your first paycheck, or after receipts?
- Is there a clawback? Many packages must be paid back if you leave within a year or two.
- Does it cover temporary housing, house-hunting trips, or selling a home?
If the calculator shows a gap, you have a specific number to bring to the conversation. "The move costs about $5,550 and the package nets about $3,300" is easier to negotiate with than "it feels low." This is an estimate for planning, not tax advice. Your actual tax depends on your whole year's income, so check with a tax professional if the amount is large.
Save the gap in one place
The Sinking Funds Tracker ($5) shows how much to save per month and per paycheck for each goal, like a moving fund or a deposit, with progress bars. Works in Google Sheets and Excel.
Get the tracker on Gumroad – $5
We make this template, so take that into account. The calculator above is free to use either way.
Frequently asked questions
Is relocation pay taxable?
For most employees, yes. Since 2018, federal law treats employer moving payments and reimbursements as taxable wages. Active-duty military moving under orders are the main exception. State rules can differ.
Why is 22% used for federal withholding?
Many employers withhold federal income tax on supplemental pay, like bonuses and relocation lump sums, at a flat 22%. Your real tax is settled when you file, so you may owe more or get some back.
What does grossed up mean?
The employer adds enough extra money to cover the taxes on the package, so you net close to the full amount. Ask HR to confirm in writing.
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