Relocation Calculator

Quick answer: is relocation money taxable in 2026?

Yes, for almost everyone. Since 2018, employer-paid moving expenses — lump sums, reimbursements and even bills the employer pays directly — have been taxable wages for civilian employees. Public Law 119-21 (the 2025 tax law) made that permanent. The exceptions are active-duty military moving under permanent-change-of-station orders and, from 2026, certain intelligence-community employees moving for a change in assignment.

That's why a "$10,000 relocation package" is really worth about $7,035 in a state with no income tax — and less where there is one.

How to use the two calculators

• Lump sum after tax / gross-up (below the break-even calculator): enter the amount you're offered to see what you'd keep, or switch to “The take-home I need” to find the gross lump sum that covers your costs. Add your move costs to see whether you'd be left short, and your repayment period to see what you'd owe back if you left early.
• Break-even (top): with your take-home pay and living costs before and after the move, it shows how many months the move takes to pay for itself. Enter the relocation package there as its after-tax value.

The 2026 tax rules for moving expenses

What the 2025 tax law made permanent

The 2017 tax law suspended two things for 2018–2025: the moving expense deduction and the exclusion that let employers reimburse qualified moving costs tax-free. Public Law 119-21 made both suspensions permanent, so IRS Publication 15-B (2026) treats moving reimbursements as taxable for most employees.

Exceptions: military and intelligence community

Members of the Armed Forces on active duty who move because of a permanent change of station can still exclude qualified reimbursements and deduct unreimbursed moving expenses. The 2025 law extended this to employees and new appointees of the intelligence community moving because of a change in assignment, for moves in 2026 or later (IRS Topic 455).

States that still give a break

A few states didn't follow the federal change, so moving costs can still lower state tax:

• California — moving expense deduction on form FTB 3913.
• New York — keeps the pre-2018 deduction and the exclusion for qualified reimbursements.
• Pennsylvania — unreimbursed moving expenses on Schedule UE if the move is for the employer's convenience and the new workplace is at least 35 miles farther from your old home.

Other states have been reported as non-conforming; check your state's revenue department.

How a relocation lump sum is withheld

A lump sum is supplemental wages, like a bonus. When it's paid separately from regular pay, most employers withhold:

• 22% federal income tax (37% on supplemental wages above $1 million in a year);
• 6.2% Social Security, until your 2026 wages reach $184,500;
• 1.45% Medicare, plus 0.9% on wages above $200,000;
• state income tax at the state's supplemental rate, where it has one, plus state disability or paid-leave deductions in some states.

Withholding isn't your final tax. The lump sum is added to your income for the year; if 22% is more than your top bracket you'll get some back at tax time, and if it's less you may owe a little.

What a gross-up is and how to calculate it

A gross-up is extra money an employer adds so the lump sum still covers your costs after tax. With a single combined tax rate:

Gross = target take-home ÷ (1 − total tax rate) = lump sum to pay

Example: $10,000 take-home with 22% + 7.65% + 5% state = 34.65% → $10,000 ÷ 0.6535 = $15,302.22.

Employers use different methods. In WHR Global's 2025 benchmark, 75% of lump sums were tax-assisted; among methods, 39% used a marginal-rate gross-up, 30% an inverse (supplemental) method and 22% a true-up after the tax return.

How much should a relocation package be?

Lump sums are usually set by job level, a fixed tier or distance. A renter moving a one-bedroom apartment needs far less than a homeowner selling a house, so compare offers with your own costs rather than averages.

What a move actually costs

Estimates vary widely with distance, home size and season: HireAHelper's 2026 booking data puts a local full-service move at about $1,167 and a long-distance move of a 2–3 bedroom home at $533–$4,569, while This Old House cites $1,400–$8,000 or more for out-of-state moves. Then add what people forget:

• Overlapping rent or a lease-break fee, and security deposits.
• Travel, temporary housing and meals while in transit.
• Car registration, a new driver's license and utility connection fees.
• Lost income for a partner who changes jobs.

Repayment agreements (clawbacks)

Most relocation money comes with a repayment agreement. Graebel's 2026 benchmarks show most terms run 12–24 months, and the most common structure (56%) is a two-year declining scale: full repayment if you leave in year one, less in year two. Repayment is usually triggered by resigning or being fired for cause.

Example: a $10,000 lump sum with a 12-month prorated agreement means owing $5,000 if you leave after 6 months.

Negotiating a relocation package

1. Price your move first with real quotes, then ask for that amount after tax — or a gross-up.
2. Ask how it's paid: lump sum, reimbursement or direct billing (all taxable, but direct billing avoids fronting cash).
3. Negotiate the repayment terms: a shorter period, a declining scale, or no repayment if you're laid off.
4. Ask about temporary housing and house-hunting trips separately from the lump sum.
5. Compare the whole offer, not just the move: use the job offer comparison and the cost of living calculator.

For HR: budgeting a lump sum with tax help

To deliver a target net amount, budget the gross-up, not just the lump sum. The gross-up mode above uses the same flat-rate supplemental method most payroll systems use (22% federal, FICA with the 2026 wage-base cap, the state's published supplemental rate where there is one). WHR suggests estimating tax assistance at 40%–45% of the benefit when you don't have a dedicated tool.

Common questions

Is a relocation lump sum taxable in 2026?

Yes for most employees. The 2025 tax law made the suspension of the moving-expense exclusion permanent, so lump sums and reimbursements are wages. Active-duty military moving under orders, and certain intelligence-community employees from 2026, are the exceptions.

Can I deduct moving expenses on my 2026 federal return?

Only if you're active-duty military moving under permanent-change-of-station orders, or an intelligence-community employee or appointee moving for a change in assignment in 2026 or later.

How much tax is withheld from relocation pay?

Typically 22% federal income tax, 6.2% Social Security (up to $184,500 of 2026 wages) and 1.45% Medicare, plus state tax where it applies.

What is a relocation gross-up?

Extra money to cover the tax so you net the intended amount. With one combined tax rate, gross = net ÷ (1 − tax rate).

How much is a typical relocation lump sum?

WHR Global's 2025 benchmark puts the average at $14,608 and the median at $10,000.

Do I have to pay back relocation if I quit?

Usually, if you signed a repayment agreement. Most run 12–24 months, often on a declining scale.

Which states still allow a moving expense deduction?

California, New York and Pennsylvania (with a 35-mile test) are verified; others have been reported. Check your state's revenue department.

How much does an out-of-state move cost?

Estimates range from about $450 for labor-only help with a local move to $8,000 or more for full service across the country.

Sources

1. Publication 15-B (2026), Employer's Tax Guide to Fringe Benefits — Internal Revenue Service. Accessed October 13, 2026.
2. Topic no. 455, Moving expenses for members of the Armed Forces — Internal Revenue Service. Accessed October 13, 2026.
3. Publication 15 (2026), (Circular E), Employer's Tax Guide — Internal Revenue Service. Accessed October 13, 2026.
4. Topic no. 560, Additional Medicare Tax — Internal Revenue Service. Accessed October 13, 2026.
5. 2025 Global Mobility Benchmark — WHR Global. Accessed October 13, 2026.
6. How much is the average U.S. domestic relocation package? (Jan 2026) — WHR Global. Accessed October 13, 2026.
7. U.S. domestic repayment agreement benchmarks (2026) — Graebel. Accessed October 13, 2026.
8. Pulse survey: repayment agreements (2021) — Aires. Accessed October 13, 2026.
9. Moving costs (2026 booking data) — HireAHelper. Accessed October 13, 2026. Estimates
10. Cost to move out of state (April 2026) — This Old House. Accessed October 13, 2026. Estimates
11. 2025 California Form 540 instructions (moving expenses, FTB 3913) — California Franchise Tax Board. Accessed October 13, 2026.
12. Tax expenditure report, personal income tax (moving expenses) — New York State Department of Taxation and Finance. Accessed October 13, 2026.
13. Unreimbursed business expenses (moving expenses) — Pennsylvania Department of Revenue. Accessed October 13, 2026.
14. Publication 525, Taxable and Nontaxable Income (Repayments) — Internal Revenue Service. Accessed October 13, 2026.