Gross-Up of U.S. Domestic Relocation Expenses

Pulse Survey - Gross-Up of U.S. Domestic Relocation Expenses

Most U.S. relocation expenses must be reported as taxable income for the receiving employee with a few exceptions such as corporate-sponsored home sale programs (i.e., buyer value option and guaranteed buyout).

The added taxability resulting from employer-paid relocation expenses has led most companies to gross-up employee relocation expenses. Gross-up is the process by which employers bear additional costs to offset or fully cover additional taxability that results from their payment of employee relocation expenses. Gross-up is not a requirement, but it is a benefit just like all other relocation benefits.

The survey results show that 98% of participating companies are offering gross-up through varying methods. The results confirm the tax treatment of a wide range of domestic relocation expenses with insight into which expenses are most often grossed-up.

The survey and the corresponding results provide general benchmarking data regarding companies’ gross-up practices. This information is not intended to be construed as tax advice.

Below is a sneak peek of the survey.