HQ Relocation Costs Explained: From Payroll Savings to Retention Risks

Relocating a corporate headquarters is one of the most significant decisions an executive team can make. It is not just about changing an address. It is about reshaping payroll, taxes, office costs, and talent strategy for the long term.

In 2025, with inflation, wage pressure, and rising real estate costs squeezing margins, many CFOs are asking: Is it time to move headquarters? This article breaks down the true cost of headquarters relocation and how to evaluate whether it supports financial and strategic goals.

The Layers of HQ Relocation Cost

When most companies think of relocation, they picture moving expenses or real estate transactions. In reality, the costs fall into five categories.

Payroll savings or increases
Median wages for the same role can vary by 20 to 40 percent between metros. For example, financial analysts earn around $109,000 in New York City compared to roughly $82,000 in Dallas and $85,000 in Atlanta. When applied across dozens or hundreds of employees, payroll differences become the largest lever in any relocation decision.

Employer taxes
Payroll and unemployment tax rates differ by state. A one or two percent change in employer burden can equal millions each year. Some states also offer relocation incentives to attract headquarters, which should be considered in the financial model.

Office and real estate costs
Office rents in New York can reach above $60 per square foot. In Dallas or Atlanta, prime office space can often be secured for around $30 per square foot. Even with hybrid work reducing footprints, these differences matter when scaling.

Direct relocation expenses
Employee relocation allowances can range from $24,000 to nearly $100,000 depending on whether the individual rents or owns. These are short-term costs but must be factored in alongside longer-term savings.

Retention and turnover risk
Not every employee will move. Those who decline must be replaced, and replacing a key contributor can cost 50 to 200 percent of their salary once recruiting, onboarding, and productivity loss are included. A poorly managed headquarters relocation can erase payroll savings if attrition spikes.

Beyond Costs Strategic Considerations

Headquarters relocation is not just a financial exercise. It also shapes growth, culture, and brand. Key questions include:

• Is the new city a hub for the roles your company relies on

• Will time-to-hire be shorter or longer in the new location

• Does the move strengthen your brand with talent and customers

• Does it diversify risk away from high cost, high turnover markets

How to Evaluate Headquarters Relocation

CFOs should approach the decision with a structured lens. The most effective evaluations include:

1. Modeling payroll differences by role across candidate cities

2. Quantifying employer tax impact including incentives

3. Comparing office rent and hybrid footprint options

4. Estimating direct relocation costs per employee

5. Building attrition scenarios to test best case, expected, and worst case outcomes

Using this framework avoids relying on generic “best cities” lists and creates a finance-driven foundation for executive decisions.

How City Shift Finance Supports Headquarters Relocation

City Shift Finance offers a Corporate Headquarters Relocation Feasibility Service designed specifically for CFOs and boards. This service delivers:

• Role by role payroll and tax modeling

• Real estate cost comparisons

• Relocation allowance benchmarks

• Retention and attrition risk analysis

• An executive-ready package to guide decision making

Learn more here: Corporate Headquarters Relocation Feasibility Service

Next Step

If your leadership team is considering a headquarters move, do not rely on guesswork or generic rankings. Book a consultation with City Shift Finance and receive CFO-grade intelligence tailored to your company.

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Disclaimer: These figures are estimates and may have changed by the time you read this. They are intended for illustration only. For precise, up to date analysis, request a tailored session with City Shift Finance.