Employee Relocation Cost Calculator

Formula

To calculate the Employee Relocation Cost (ERC):

\[ ERC = (D + T + H + M + O) \times R \]

Where:

$ERC$ is the Employee Relocation Cost in dollars
$D$ is the Cost of Transportation in dollars
$T$ is the Cost of Temporary Housing in dollars
$H$ is the Cost of Home Finding in dollars
$M$ is the Cost of Moving Belongings in dollars
$O$ is the Cost of Miscellaneous Expenses in dollars
$R$ is the Relocation Cost Multiplier (a percentage or decimal value)

What is Employee Relocation Cost?

Employee relocation cost refers to the expenses incurred by a company when moving an employee from one location to another for work purposes. This could be due to a new job assignment, a promotion that requires the employee to work in a different city or country, or the opening of a new office location. The costs can include a wide range of expenses such as moving and transportation costs, temporary housing, job search assistance for an accompanying spouse, cost of living adjustment if the new location is more expensive, and potentially even language training or cultural assimilation classes. The company may also cover the costs of selling the employee’s current home and buying a new one in the new location. The specifics of what is covered can vary greatly depending on the company’s relocation policy and the terms of the employee’s contract.

Example Calculation

Let's assume the following values:

Cost of Transportation ($D$) = $2,000
Cost of Temporary Housing ($T$) = $1,500
Cost of Home Finding ($H$) = $500
Cost of Moving Belongings ($M$) = $1,000
Cost of Miscellaneous Expenses ($O$) = $300
Relocation Cost Multiplier ($R$) = 1.2

Using the formula:

\[ ERC = (2000 + 1500 + 500 + 1000 + 300) \times 1.2 = 5300 \times 1.2 = 6360 \text{ dollars} \]

The Employee Relocation Cost is $6,360.