A Guide to Making Relocation Cost Estimates

A Guide to Making Relocation Cost Estimates
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Physical Relocation Costs

The major and direct cost associated with job relocation is the physical cost of moving to a new place. Major physical relocation costs include costs related to:

  • Transporting furniture and belongings to the new house. Related costs include cost of packing up your contents such as cartons and tape, and cost of loading and unloading, and actual transportation costs.
  • Flight or bus tickets for family members traveling to the new place, or cost of gas and vehicle wear-and-tear.
  • Visits to identify a new house and make the necessary arrangements.
  • Furniture damaged in transit.
  • Non-transferable items abandoned in old place and new items purchased, such as curtains made to size of window in your new abode.
  • Cost of eating out during travel, and during packing and unpacking, when dishes are packed and utilities may not yet be connected.

Physical relocation costs depend on the distance and the quantity. Inter-state relocations that require air travel for family members and pets, and transporting vehicles, or buying and re-purchase of vehicles obviously cost more.

International relocations remain the most difficult, and might require payment of customs duty for the articles transported.

Professional moving companies make an accurate estimate and do much of the physical relocation work. Make sure to get the estimate in actual weight of goods and 400N tariff, rather than cubic feet, which may be misleading.


Housing costs influence and distort relocation costs in a big way. A person relocating from an owned house to a place where one has to rent a house, would see a big increase in relocation costs, whereas a person relocating to an owned house may actually ensure relocating results in net savings.

One good approach to tide over such distortions when making a relocation cost estimate, is to fix a presumptive rent on one’s own house and include the same when calculating relocation costs, to prevent distortions.

Cost of Living Differential

Relocating from one place to another entails cost differentials. Cost of essential goods, cost of gas, energy, and other utilities, education expenses for children etc., all differ from place to place. Adding or subtracting the difference in cost of living expenses, as the case may be, is essential to derive accurate relocation cost estimates.

Presumptive Loss of Income

Relocation entails a disruption of normal routines too. Identifying and leasing a new house, packing and unpacking, arranging furniture in the new house, arranging for utilities such as Internet connection, besides the actual travel time, all translate to loss of time better spent in more productive activities. Relocation also entails taking at least a couple of days away from work to make arrangements, for travel, for admitting children in new schools, and other purposes. The loss of presumptive income for the hours spent, or the opportunity costs lost in relocating needs, adds up to the relocating cost.

The spouse having to quit job and search for a new job in the new place, adds to the presumptive loss of income considerably. For the salary from the time the spouse quits the job and lands a new job, adds to relocation cost expenses too.

Other Considerations

Very often, the biggest impact of relocation is loss of accustomed privileges or conveniences, usually non-monetary. Such considerations can, for example, be the presence of a neighbor to take care of the kids without spending on child care, availability of a free lift for the child in the neighbor’s car, presence of a discount store nearby to avail foodstuffs at cheap rates, and more. An accurate picture of relocation costs mandates placing a value for such considerations, and adding or subtracting the same from the relocation costs.

Such considerations are recurrent in nature, whereas a relocation cost estimate is a one-time exercise. For this, the best approach is to presume the time one is likely to spend at the new location, and include the proportionate calculation in the relocation cost estimate.

Considering the disruption relocations cause to an employee’s life, most companies offer relocation incentives such as bonus, time office, and other assistance.


Mortgage News Daily. “How do I best estimate moving costs?” https://www.mortgagenewsdaily.com/wiki/Estimate_Moving_Costs.asp. Retrieved 19 March 2011.

Image Credit: flickr.com/Beatrice Murch