Over the past few months, Expat Academy members have been digging deep into a subject that was once considered a policy footnote but is now front and centre: repayment clauses and clawback agreements.
Whether it’s an international hire deciding the move abroad isn’t for them after all, a permanent transfer who hands in their notice within the year, or a short-term assignee resigning halfway through a project, our members have been dealing with the same questions: Do we ask for the money back? How much? From whom? And what if the employee pushes back?
We’ve seen a surge of benchmarking questions covering clawbacks, repayment agreements, and what happens to relocation benefits when an employee resigns – especially if the move didn’t even happen. While approaches vary widely, there are some clear trends emerging.
Most members draw a firm line between compliance-related costs (such as immigration and tax services) and employee benefit costs (flights, shipments, allowances and temporary accommodation). The general consensus is that immigration and tax support is usually excluded from repayment agreements – especially if those services are necessary for business compliance.
However, when it comes to relocation-related benefits, it’s a different story.
Pro-rata clawbacks are the most common model: if an employee resigns six months into a 12-month clawback period, they’re typically asked to repay 50% of costs.
Many organisations apply stepped repayment models: 100% if the employee leaves in the first six months, 50% in the next six, and so on.
The most common clawback duration? A tie between 12 months and 24 months, depending on the nature of the move.
As one member put it: “The penalty is there as a deterrent – to stop someone taking the perks of relocation only to disappear to a competitor a few months later.”
Clawback clauses are usually only applied when an employee resigns voluntarily or is terminated for cause. Compassionate grounds – such as a serious illness or a death in the family – are frequently cited as exceptions. Many organisations also waive repayment if the employee is made redundant.
Some organisations take a firmer stance: one member reported applying a five-year repayment clause (yes, really), although they admitted they were now reviewing it to bring it down to a more palatable three years.
Others take a lighter-touch approach – adding repayment wording into letters without really expecting to enforce it, using it more as a "keep off the grass" sign than a legal sledgehammer.
In business-driven relocations, repayment clauses are near-universal – particularly when significant costs are incurred. But employee-initiated moves are where things get interesting.
Some companies won’t provide any financial support at all for personal moves. Others offer limited assistance (typically compliance only) with no repayment required.
Yet for those who do support personal relocations, many are now rethinking their approach. One respondent shared: “Personally initiated moves are a bit of a headache – we’re looking to formalise our policy this year.”
When support is offered and the move is then cancelled by the employee, several organisations attempt to recover unrecoverable costs like vendor fees – though success here is mixed, with one member candidly admitting: “If they fight hard enough, it’s often dropped.”
A particularly lively question was around repatriation benefits for assignees who resign mid-assignment. Should companies still pay for flights, shipment, and accommodation?
The majority said: absolutely not.
In fact, the most common view was that benefits should be forfeited entirely upon resignation, with a few organisations making exceptions only where legally required. Some members provide a basic economy-class ticket home if the visa requires it, but little more.
As one respondent put it bluntly: “It does not seem right to be paying to relocate someone who’s just joined a competitor.”
A number of members noted that even with formal repayment agreements in place, successfully reclaiming costs can be hit or miss.
Some companies ask the employee to bank transfer repayments directly rather than use payroll deductions, which can complicate net pay and National Minimum Wage compliance.
Others include estimated relocation cost summaries in the initial transfer letters to reinforce transparency – and give the new employer something to buy them out of.
A few reported goodwill arrangements – for example, spreading repayments over time, or agreeing lump-sum deals if the employee has the funds.
One member estimated they’ve only successfully recouped costs 30% of the time. “You have to ask if it’s worth it,” they added.
There’s no one-size-fits-all solution. Legal enforceability varies by jurisdiction, employee circumstances change, and the cost of pursuing repayments can sometimes outweigh the benefit. But what’s clear is this: organisations are becoming increasingly mindful of the risk that comes with supporting mobility.
At a time when budgets are under scrutiny and cross-border moves are more common than ever, having a fair, transparent and legally sound repayment policy can make a big difference. It sets expectations, protects the business, and encourages employees to think twice before making commitments they can’t keep.
And if your policy hasn’t been reviewed in a while, now might be a good time. As one member put it: “We’re trying to avoid becoming an international travel agency for people who change their mind.”
*Thanks to Lewis Carroll for the title of this blog taken from the poem "Jabberwocky"