What is a Settling-In Allowance

A settling-in allowance is money provided as part of relocation expenses to a person who has transferred locations or moved as part of accepting a new job. A settling-in allowance may be given as a lump sum or later reimbursed by the current or new employer upon submission of related receipts. It might be used for expenses such as temporary lodging, meals, storage of personal belongings and other incidental costs of settling in at a new location. Under some circumstances, relocation expenses may be considered taxable and included on an employee’s W2.

BREAKING DOWN Settling-In Allowance

Companies often assist employees who have to move for work, whether because of a transfer or a new job offer. In addition to a settling-in allowance, they might award a relocation allowance or direct reimbursement for relocation expenses. Relocation expenses often include transportation, accommodation and meals for house hunting trips, temporary lodging upon arrival in the new location, moving company and storage costs. Other covered expenses may include costs associated with selling and acquiring a primary residence such as real estate commissions and other closing costs. For temporary relocation, a company might provide both a settling-in allowance and a living allowance.

Incentifying Employees to Relocate

An example of the offering of a settling-in allowance would be when a company establishes a branch or division in a different state and is offering relocation to existing employees in order to have an experienced workforce in place. As part of the relocation incentive, an employer would cover travel and moving costs, as well as assistance with selling an existing property and purchasing a new one. A settling-in allowance would be in addition to these other incentives.