Printed on: 06/17/2018. Please go to http://policy.umn.edu for the most current version of the Policy or related document.

ADMINISTRATIVE PROCEDURE

Paying for Appointee's Moving Expenses

Departments have two options when it comes to paying for authorized relocation expenses.

  • A lump sum
  • Reimbursing the employee for actual expenses

The department is responsible for ensuring that expenses claimed for reimbursement are consistent with the limits and guidelines defined by the Policy. If using the U-Wide moving agreement for transporting household goods, the supplier must be paid by the employee.

The employee may apply for reimbursement after the move, substantiating all expenses with original receipts if the employee has not received a lump sum..

All relocation expenses  are taxable. Reimbursements for taxable relocation expenses will be reported as income to the new employee, subject to the appropriate tax withholding.

Before the Move

  • Advance Approval:The department wishing to pay moving expenses for an employee should request approval in advance from the Dean or equivalent administrative officer. If reimbursement will be from sponsored funds, contact Sponsored Projects Administration (SPA).
  • Advise the Employee:The department should advise the employee what method will be used to pay relocation expenses and the limitations on such payments. Advise the employee that receipts are required for reimbursement.

After the Move

  • To pay an employee a lump sum:Once the employee is on the payroll, the department enters the relocation lump sum (earnings code MRL) in either Peoplesoft pay entry or additional pay. The lump sum cannot be paid out prior to the employee starting work since the lump sum is subject to FICA and income tax withholding.
  • To reimburse an employee: The department will process an Expense Worksheet in the Expense module of the Enterprise Financial System (EFS). Use of the appropriate account code (Employee Relocation) ensures that the system will notify Payroll Services of the transaction. When approvals are complete, print the bar-coded cover sheet and attach the paper form BA 1357 and the original receipts.
  • Employee:The Moving Expense Reimbursement Form (BA 1357) contains the following certification: "I hereby certify that the above listed expenses were incurred by me in connection with relocating myself, my family and our personal possessions in order to accept employment at the University of Minnesota and for which I have not been otherwise reimbursed, either by the University or any other person, institution or governmental agency."
  • Payroll processing for relocation expenses:Payroll Services will contact the department if any additional information or documentation is needed to process the expenses reported on the Moving Expense Reimbursement Form(s) BA 1357. Payroll Services will add the appropriate values to the person's gross balances for withholding and reporting purposes.

Document Feedback