Printed on: 07/22/2017. Please go to for the most current version of the Policy or related document.


Relocating Employees

Responsible University Officer(s):

  • Associate Vice President and Controller

Policy Owner(s):

  • Director of Purchasing Services

Policy contact(s):

Date Revised:

January 2011

Effective Date:

December 1995


Deans or equivalent administrative officers may approve payment for relocation expenses for faculty, professional and administrative staff appointed on a full time basis for a period of at least one academic year, and for other University employees as determined by the dean or equivalent administrative officer. The dean or equivalent administrative officer must authorize the payment and method of payment prior to relocation.

Relocation expenses being paid or reimbursed should not exceed one month's salary or a "not to exceed" amount agreed upon by the dean or equivalent administrative officer.

Departments have three options for paying for employee relocation costs . The lump sum method may not be combined with the other payment methods, but the other two methods may be used in combination with each other. The options are:

  • Offer a lump sum for relocation expenses - recommended method as it imposes the least administrative burden on the University.
  • Reimburse for actual and substantiated moving expenses (qualified or unqualified)
  • Pay the supplier(s) directly.

If funding to pay for the relocation is coming from sponsored research sources, Sponsored Projects Administration (SPA) may require additional approvals to ensure allowability of these costs to the sponsored project.

Relocation payments to employees may be subject to withholding, and may represent taxable income to the employee.


To ensure that the University pays for, or reimburses, relocation expenses for employees where this benefit would serve as a significant recruiting tool, to allow departments and employees the flexibility to choose the method of handling relocation expenses, and to ensure departments communicate tax implications to employees and comply with state and federal tax laws.






Primary Contact(s)
Mary Everley
General Questions & Special Situations
Purchasing Services
Travel Services Coordinator
Tax Questions
Payroll Services/
HR Call Center
Policy/Procedure Questions
Purchasing Services
Relocation Assistance Program
Director of Relocation Assistance Program (Human Resources)
Sponsored Account


Relocation expenses
Expenses for transporting personal, household or business belongings, negotiated as part of recruiting an employee for the University of Minnesota. Includes such services as packing, loading, hauling, insuring, temporary storage, etc.
Relocation expenses may also include transportation, lodging, and meals for the employee and family en route to the University. Transportation may not exceed coach class air fare by the most direct or least expensive route for the employee, spouse, and dependent children, or the current mileage rate. Expenses may also include travel and expenses for trips necessary to secure living quarters and/or temporary living expenses at the employment location. Reimbursement may not exceed University travel guidelines.
Qualified (Non-taxable) Relocation Expenses
The reasonable cost of moving household goods and personal effects from former to new residence, which are not considered to be taxable income to the employee. Includes such services as packing, loading, hauling, insuring, temporary storage, etc. See Appendices.
Qualified (Non-taxable) Travel Expenses
The reasonable cost of travel, including lodging but not meals, during the period when moving from former to new residence for the appointee and members of the appointee's household, which are not considered to be taxable income to the employee. See Appendices.
Nonqualified (Taxable) Relocation Expenses
Expenses, that, if paid directly or reimbursed by the University, represent taxable income to the employee and will be reported on form W-2 subject to appropriate payroll tax withholding. See Appendices.


Dean or equivalent
Approve lump sum payment or reimbursement of moving expenses.
Request advance approval from Dean or equivalent. Inform the employee that they will receive a lump sum (if applicable) or that the moving expenses will be reimbursed and the limitations on such payments.
If moving expenses will be reimbursed, inform the employee to retain original receipts. Inform the employee that the IRS requires the University to report the reimbursement of nonqualified relocation expenses as taxable income subject to the appropriate tax withholding.
Prepare a Moving Expense Form after the move. Ensure that expenses claimed for reimbursement are within the limits of current policy.
Human Resources
Provide orientation information to new employees.
If being reimbursed actual and substantiated relocation expenses, retain original relocation expense receipts.
Purchasing Services
Maintain policy and procedures. Negotiate moving contracts. Communicate policy information.
Payroll Services
Capture information for IRS reporting.



January 2011 - Comprehensive Review: Change to policy to reduce administrative processing costs by offering and promoting a lump sum payment; clarifies potential tax implications to new employees. 30 Day Review.
January 2010 - Updated Policy Statement language to show that Dean or equivalent officer may approve and must authorize relocation payments.
July 2008 - Policy and procedure updated to reflect rollout of Enterprise Financial System.
January 2006: Modified the Moving Expense Reimbursement Form (BA 1357) to be consistent with the IRS 2006 rulings.
January 2005: Modified the Moving Expense Reimbursement Form (BA 1357) to change the Qualified Mileage Reimbursement & Excess Mileage Reimbursements rates to be consistent with IRS 2005 rulings.
July 1997: Modified the Moving Expense Reimbursement Form (BA 1357) to clearly distinguish taxable and nontaxable moving expenses. Updated payroll address in BA 1357.
November 1996 - Modified policy statement to state that payment of moving expenses is not limited to 1 month's salary.
Was part of the Employee Business Related Expenses Policy
December 1995
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