Employers sometimes help employees cover costs of relocating themselves and immediate family for work.
If you pay or reimburse an employee’s relocating costs, the payment may be tax-free if they are relocating to:
- start employment with you
- stay with your company but start a new role at a new location
- stay in their current role but move to a new location.
Relocation expenses will generally only be tax-free if the employee’s home is a substantial travelling distance from the new workplace.
Only expenses that are on our list of eligible relocation expenses can be reimbursed tax-free. The payment must reflect the actual cost. Costs must be incurred before the end of the tax year after the employee relocates.