A month of salary in relocation money arrives as £3,848 in London

By Skyler Bissell · August 27, 2026 · 10 min read

On a £111,000 London package, a relocation allowance worth one month of salary is £9,250 in the offer letter and £3,848 in your account. The employer wrote a number, the payroll treated it as pay, and income tax and National Insurance took the rest. The identical allowance on a US salary of the same size arrives as $8,724 in Austin. In both places the money is stacked on top of a full year of earnings, and the rate that applies to the top of your income is not the rate you are used to seeing on a payslip.

The distance between the written number and the banked number is the most misread part of a relocation offer. Here is what a package normally contains, line by line, with a figure against every line our engine can price and an honest blank against the ones it cannot.

The nine lines

Packages differ by employer, by seniority and by whether the move crosses a border, but the components are stable. Nine of them cover almost every offer people bring to the calculator. The figures below sit on a salary equivalent to USD 150,000 in each city, which is the household the rest of this article uses.

1. The cash lump sum. Quoted in months of salary or as a round number, and paid through payroll. This is the line people compare between offers and the line that shrinks the most between the letter and the bank. The table below prices it in eight cities.

2. Shipping and storage for your household goods. Quoted by a mover on volume and distance, so no engine can price it and any figure you read online is somebody else's container. Ask for this one to be reimbursed against the mover's invoice. A fixed allowance means you keep the surplus on a small move and swallow the overrun on a large one, and international moves overrun far more often than they come in cheap.

3. Temporary housing. Usually 30 to 90 days while you find somewhere permanent. Three months at our engine's rents is €5,214 in Berlin and £9,321 in London for the same standard of home. The window matters more than the amount. A 30-day window in a city with a slow rental market means signing a lease under time pressure, which costs more than the housing line ever saves.

4. Home-finding help, deposits and agency fees. The upfront cash a lease demands has little to do with the rent itself. Deposits of two or three months are normal across much of Europe, and in the Netherlands and parts of Germany a tenant may pay an agency fee on top. This line is where a package is quietly generous or quietly thin, because an employer who covers the deposit has handed you several thousand of working capital in the month you have the least of it.

5. Flights out, and home leave afterwards. The outbound flights are the easy half. The half people forget is the annual trip back, which our engine already prices as part of the cost of living: €850 a year from Berlin and £750 from London for one trip. A package that funds home leave for the first two years is worth more than the same money inside the lump sum, because it lands in the years you are most likely to want it.

6. Immigration, visas and permits. Employer-paid almost without exception, since the employer is usually the sponsor. Dependent permits are the part to check. They often run on a separate timeline, and no amount of money makes a consulate faster.

7. Tax preparation, and the gross-up. Two different things that tend to arrive in the same paragraph of an offer letter. Tax preparation means the employer funds an accountant for your first cross-border filing. A gross-up means the employer pays the tax on your relocation money so that the amount you were promised is the amount you receive. The second one is worth real money, and it is the most negotiable line in the package.

8. School fees or childcare. The biggest single line when it appears, and it appears mostly in senior international packages. Our engine prices what a household of four pays for care in each city: £25,200 a year in London and €14,760 in Amsterdam, against €1,200 in Berlin, where the public system carries almost all of it. Those three figures come from our published family scenario, because a childcare bill needs children in it, while every other figure on this page sits on the single-earner salary. The country-by-country picture is in childcare costs by country.

9. Partner and family support. Job-search help for a partner, language lessons, a settling-in service. This is the line most often absent and the one whose absence is most expensive, because a partner who cannot work in the destination country is a household income that halved without appearing anywhere in the offer.

The cash line is pay, so it is taxed like pay

Here is what one month of salary looks like when it is paid as relocation money on top of a full year of earnings. The rate in the middle column applies to that slice specifically, and in every city with a progressive system it sits above the average rate on your payslip.

cityparity engine figures, 2026, on the published base scenario: one earner, no children, a salary equivalent to USD 150,000 expressed in each city's currency, 6% into a retirement account. The middle column is the tax on one extra month of salary paid on top of that year, so it carries social insurance and any local income tax as well as national income tax. Cities in countries with an open item in our tax-accuracy worklist are left out of this table.

London is the row that surprises people, and the reason is specific to this salary. At this salary a UK earner sits inside the personal-allowance taper, the band where every extra pound of income also withdraws part of the tax-free allowance, which pushes the rate on the next slice of income well above the headline 40%. We verified that band by hand against the engine's own tax function while writing about trading salary for vacation days. Move the salary far enough in either direction and London's number changes sharply, which is exactly why a relocation allowance should be priced at your salary rather than at a national average.

The table also shows that the spread between two US cities is real. Austin and New York carry the identical federal bill on this income, and everything separating those two rows is state and city income tax. If the distance between a written rate and your realised rate is new to you, our explainer on marginal versus effective tax rates is the shortest route to reading your own payslip.

One warning sits outside every column. Many payrolls withhold on a lump sum at a flat supplemental rate rather than at your real marginal rate, which makes the payment look better than it is in the month you receive it and leaves a balance owing when you file. The tax in the table is the liability, and the liability is the number that matters.

The gross-up, and what it costs your employer

A gross-up means the employer pays enough that the amount you were promised survives the tax. It is a simple ask, it is standard practice at large employers, and it is worth more than any other negotiable line in the package.

The arithmetic runs in the direction people find counter-intuitive, because the gross-up is itself taxable income and has to cover the tax on itself. To put one clean month of salary in a London employee's hands, an employer pays £22,208. In Amsterdam the same clean month costs €21,524. Those are the real prices of a promise most offer letters make loosely, and knowing them changes the conversation. You are not asking for more money. You are asking for the money already offered.

Three countries treat parts of this differently, and the differences are worth knowing before you negotiate.

In the United Kingdom, HMRC exempts up to GBP 8,000 of qualifying relocation costs from tax and National Insurance, provided the new home is reasonably close to the new workplace, the old home is not, and the costs are paid before the end of the tax year following the one the job started in. Qualifying costs are defined narrowly, covering things like buying and selling a home, moving, and some new furnishings. Anything above the 8,000 is reportable and taxable in the ordinary way, which is why the London row above governs the rest of the package.

In the United States there is no equivalent shelter. The IRS treats employer-paid moving expenses as taxable wages for civilian employees, with active-duty armed forces the standing exception and intelligence-community employees added for moves from 2026 onward. The moving-expense deduction that older articles still describe was suspended in 2018 and has since been repealed for everyone else, so a US relocation package is fully taxable compensation and every dollar of it belongs in the gross-up conversation.

The Netherlands runs the friendliest version of this, and it arrives as a tax regime, never appearing as a package line at all. The 30% ruling exists to make part of an incoming worker's pay tax-free precisely because relocating costs money, and where it applies it changes the arithmetic of the whole offer. Our explainer on how the 30% ruling works covers the eligibility conditions and the phase-down.

The clauses underneath the package

Two terms decide how much of the package you keep, and neither of them appears in the list of components.

The clawback. Almost every package is repayable if you leave within a stated period, commonly one or two years, and sometimes at the full pre-tax value. That last detail is the sharp one. You received €6,272 of a Berlin allowance after tax, and a full-value clawback asks for €10,750 back. Ask for the repayment to be net of tax, and for it to taper by month instead of sitting at 100% until a cliff date.

The tax year the move straddles. A move in the last quarter of a year can drop an entire relocation payment into a year where you have already earned a full salary in your old country, taxed at the top of both. Where the timing is flexible, a January start is often worth more than any single line item. This is the same split-year problem covered in what happens to your US taxes after moving abroad.

What to ask for, in order

Rank the asks by what they are worth, and ignore what feels reasonable to request. On the figures above, the order comes out fairly consistent across offers.

Ask for the gross-up first. It is the largest number on the table, it costs the employer an amount they can calculate and approve, and it converts a vague promise into a delivered one. Ask for the temporary-housing window in weeks rather than in currency, because the risk you are managing is the rental market, and the nightly rate is beside the point. Ask for home leave to be written in for two years. Ask for the clawback to taper. Ask for school or childcare last, not because it is small, but because it is the line most likely to need a policy exception rather than a manager's signature.

Then price the whole thing against the offer it sits on. A relocation package is a one-off payment attached to a salary you will live on for years, and the salary is what decides whether the move works. Our guide to the equivalent salary abroad sets out how to find the number that keeps your standard of living intact, and negotiating an offer in another country covers how to use that number in the room. If the salary on the offer looks small next to what you earn today, why European salaries are lower takes that apart piece by piece. And if your move is one of the common corridors, the priced comparison already exists: Seattle against Berlin runs tax, housing, healthcare and childcare on one salary.

FAQ

Is a lump sum better than a managed relocation?

A lump sum gives you control and hands you the risk. You keep whatever you do not spend, and you absorb the overrun if the shipping quote comes in high or the temporary housing runs three weeks past the allowance. A managed relocation, where the employer contracts the mover and pays the vendor directly, caps your downside and usually delivers more value for each dollar the employer spends, because a corporate account negotiates rates you cannot. The tax treatment often differs too: in several countries a reimbursement of a documented expense is treated more favourably than cash handed over with no receipts attached. Ask for the managed version on shipping and temporary housing, and take cash only for the parts you can predict.

How much is a typical relocation package worth?

There is no reliable typical figure, because the components vary more than the total does. A domestic move for one person with nothing to ship is a different animal from an international move with a partner, two children and a house of furniture. The useful approach is to price your own: take the nine lines in this article, put your own number against each, and treat anything the employer will not cover as a cost you are paying in order to take the job. The two lines that most often decide whether a package is generous are the length of the temporary-housing window and whether the cash is grossed up for tax.

Does a relocation package cover my partner and children?

Flights and shipping almost always cover the household. Visas usually do, though dependent permits often run on a separate and slower track that no allowance can speed up. School fees and partner job support are the two lines most likely to be missing, and they are the two that cost the most when they are. Get the answer in writing before you accept, because a package that covers you and not your family has quietly moved a large expense onto your salary.

What happens if my relocation allowance is not grossed up?

You receive the cash, your employer reports it as wages, and the tax comes out of your own money. Where the payroll withholds at a flat supplemental rate instead of your real marginal rate, the shortfall does not disappear. It lands as a bill when you file. Two moves reduce the damage: ask for the payment to be split across two tax years if the move straddles a year end, and ask the employer to fund the tax-preparation fee for the first filing after the move, which is when a cross-border return is at its most expensive and least optional.

A package gets easier to judge once every line carries a number. Run your two cities and your own salary through the engine and the housing, tax, healthcare and childcare lines come back priced, which is the baseline the relocation money sits on top of.

Sources. UK exemption for qualifying relocation costs: HMRC, expenses and benefits: relocation costs. US treatment of employer-paid moving expenses: IRS Topic no. 455, moving expenses. Dutch inbound regime: Belastingdienst on the 30% facility. Tax, housing, childcare and travel figures are computed by cityparity's per-city engine; per-field provenance is in data/_meta.json.

Lump-sum figures price a payment made on top of a full year of salary at the same employer, in the destination city, and exclude any inbound tax regime. See the methodology.