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3. Don’t Flee from Tax Gross Ups
Unfortunately, per the IRS, employees must pay income tax on their relocation benefits. While most employers cover the cost of these taxes—via funds known as tax gross-ups—some employers do not, at their own peril.
Take the case of Carlos, a promising manager. His new employer didn’t believe in paying tax gross ups. However, it also did a poor job of communicating this to its relocating employees. Because this was Carlos first relocation, it wasn’t until his move was well underway that he realized he’d be on the hook for a cool $4,000 in taxes.
That led to some frantic back-and-forth between the employer and Carlos, who came close to pulling the plug. Ultimately, the employer made an exception and paid his tax gross up—but not before creating stress all around and casting a shadow over their relationship.
How to Flip This Script
There’s only one way to avoid this inevitable disaster: pay the tax gross ups. A good relocation management provider will help you cut relocation costs without cutting benefits, so your program will remain cost-effective—and competitive, too.
3 Horror Stories, 1 Lesson Learned
As you’ve undoubtedly figured out, there’s a moral to these relocation tales of woe. It’s not enough to mean well; you need an airtight relocation program, ideally managed by an experienced relocation provider that will guide you around the pitfalls.
If you have a relocation horror story to share, we’d love to hear it. And if you’d like help avoiding them in the future, give us a holler. (Metaphorically speaking, we hope.)