Moving Allowances and Expense Reimbursements (II.A.2)

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STATEMENT OF POLICY

Purdue University is dedicated to attracting, developing and retaining valuable people for its workforce. To fulfill this goal, it may be necessary to conduct employment searches on a national or international scale. To offer competitive employment packages, unit heads may wish to include a provision for relocation expenses with an offer of employment. This policy allows reimbursement of actual moving expenses and/or a moving allowance at the discretion of the operating unit. University general funds, auxiliary funds and/or gift funds are allowable sources for payment of moving reimbursements and/or allowances. The vice president, vice chancellor, vice provost, dean or director of the operating unit may approve moving allowances and/or expense reimbursements up to $15,000 to defray personal moving expenses for new faculty and new executive, management, and professional staff. Moving expense allowances and/or reimbursements for staff reporting directly to the President require approval of the President or designee.

While not considered personal moving expenses, moving expenses for laboratory equipment and supplies related to employment at Purdue University may be charged to University funds utilizing standard University purchasing procedures for transportation of these items.

Exceptions to the allowance or reimbursement limit require the approval of the unit officer who reports to the President.

Due to the enactment of the Tax Cuts and Job Act of 2017 (TCJA), all payments made to an employee for moving costs (both moving allowance and expense reimbursements) are considered taxable income to the employee. These payments are subject to both income and FICA (Social Security and Medicare) taxes.

REASON FOR THIS POLICY

To offer a competitive compensation package, financial assistance to defray relocation expenses may be desired to supplement the salary and excellent benefits package offered to the candidate.

INDIVIDUALS AND ENTITIES AFFECTED BY THIS POLICY

Heads and business office staff of hiring units.

EXCLUSIONS

Moving expenses are not reimbursable or covered by a moving allowance for the following individuals:

1. Students
2. Prospective employees for positions classified as administrative and operational support
3. Prospective employees for positions classified as police, fire and skilled trades
4. Temporary employees
5. Postdoctoral researchers
6. Clinical interns and clinical residents

RESPONSIBILITIES

Comptroller

• Provide oversight for administration of this policy.

• Obtain required approval before offering to provide candidates moving allowances or reimbursements.
• Ensure that approved moving expense allowances and/or reimbursements, including the tax consequences of those amounts, are documented in the candidate’s offer letter or in subsequent documentation. Copies of the approved documentation will be required to process the payment.
• Refer to the Payroll and Tax webpage on relocation for detailed information on moving expense allowances and reimbursements.

Payroll Offices

• Advise hiring units on the appropriate use of moving allowances and reimbursements.
• Ensure that applicable income and FICA taxes are deducted from payments for moving allowances and/or reimbursements.

DEFINITIONS

All defined terms are capitalized throughout the document. Refer to the central Policy Glossary for additional defined terms.

RELATED DOCUMENTS, FORMS AND TOOLS

Payroll and Tax webpage on relocation

WEBSITE ADDRESS FOR THIS POLICY

www.purdue.edu/policies/business-finance/iia2.html

HISTORY AND UPDATES

September 1, 2019: Language describing tax differences between moving allowances and moving expense reimbursement replaced with statement that both forms of payment are taxable as income. Responsible executive changed. Aligned references to staff classifications with current terminology and added exclusions for clarification. Policy title changed; former title was Moving Allowances or Expense Reimbursements for Faculty and Administrative/Professional Staff.
 
November 18, 2011: Policy number changed to II.A.2 (formerly IV.5.6).
 
February 8, 2011: Related Documents section updated.
 
April 6, 2007: Language throughout the policy was updated and the amount for reimbursements was raised to $15,000.
 
May 1, 2004: This policy supersedes Executive Memorandum No. D-3, issued November 15, 2001.  Executive Memorandum No. D-3 superseded policy memoranda dated August 10, 1988; August 29, 1988; and June 26, 1990.

APPENDIX

There are no appendices to this policy.