Relocation Payments

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Policy Number:
UW-3079
Old Policy Number:
323
Responsible Office:
Purchasing Services, Division of Business Services

University Policy

Rationale/​Purpose:

The purpose of this policy is to establish University of Wisconsin-Madison requirements for payment of relocation stipends and costs associated with temporary and indefinite work assignments. This policy also identifies when and how expenses related to temporary or indefinite work assignments away from the employee's headquarters location are payable/reimbursable.

Definitions:
Approving Authority
Chancellor, vice chancellor, or delegated division dean or director who approves expenses for relocation or temporary work assignments.
Authorization Letter
A letter that specifically outlines and approves university funding and amounts for relocation stipends.
Employee
Any individual who holds a faculty, academic staff, university staff, or limited appointment at UW-Madison.
Headquarter Location
The official location where the employee’s work is performed on a permanent basis. Typically, the campus or institution office.
Relocation Stipend
Lump-sum, tax-reportable payment to employee for relocation costs.
Standard Stipend
A lump sum of money established at the divisional level, and issued at the discretion of the approving authority, to cover the reasonable and necessary costs of moving the impacted employee or new hire, their immediate family, their furniture, and personal effects as well as the related travel expenses associated with relocation, consistent with federal law, state law and university policies.
Supplemental Stipend
A lump sum of money, established at the unit level, and issued on an exception basis at the discretion of the approving authority to supplement the standard relocation stipend in those circumstances when the relocation expenses of the impacted employee or new hire are subsequently determined to be unusually high and a failure to grant a supplemental stipend would create a hardship for the impacted employee or new hire.
Tax Home
The city or general vicinity where an employee’s primary place of business or work is located, regardless of the location of the employee’s residence. Tax home influences the employee’s tax deductions for business travel.
Scope:

This policy applies to university employees when relocation and related travel costs are funded in full or part by the university or when temporary or indefinite work assignments are made.

Policy:

  1. Eligibility

    1. At the discretion of each unit, relocation stipends may be authorized for new or presently employed personnel assigned to new locations by transfer or promotion.
    2. Relocation stipend or reimbursement is not authorized for employees appointed as University Staff Temporary (formerly limited term employees).
    3. Payment of relocation stipend is mandatory when the appointing authority:
      1. Requires the employee to change residence location because the employee is ordered to relocate or is promoted to a different position within the University of Wisconsin-Madison, and
      2. The appointing authority determines the relocation or promotion requires the employee to change residence.
    4. Payment of a relocation stipend is on a permissive basis at the discretion of the new approving authority when:
      1. An employee requests a transfer or demotion and relocates as a result, or
      2. An employee is reporting to their first place of employment at the University of Wisconsin-Madison or reporting upon reemployment after leaving the University of Wisconsin-Madison, and
      3. The distance between the new place of employment and the old residence is at least 35 miles farther than the distance between the former place of employment and the former residence; and
      4. The distance between the new and former residence is at least 35 miles.
    5. If the approving authority determines a relocation is a mandatory condition of employment, the minimum distance requirements are not applicable.
    6. No more than two standard relocation stipends may be paid to an employee in a calendar year.
    7. Unless otherwise authorized by the approving authority, to be eligible for a relocation stipend, the employee must move no later than one year from the effective date of the appointment or the end of probation, whichever is later.
    8. The following factors must be considered when determining which type of stipend (e.g., standard, supplemental) to provide:
      1. Are the individual’s skills in critically short supply? If yes, is payment usually available from competing employers?
      2. Is the labor market tight for this position?
      3. Does the individual rank above all other candidates in a combination of training, experience, and personal qualities?
      4. Will the best qualified individual for the position be unable to accept the unit’s offer for financial reasons unless relocation expenses are paid?

  2. Payment of Relocation Stipends

    1. Relocation expenses for employees may be paid via stipend, dependent upon availability of funding.
    2. The university may provide an employee a relocation stipend for costs associated with a relocation, whether using a commercial moving service or choosing to self-move.
    3. A relocation stipend is made not more than 30 days in advance of the employee's relocation date.
    4. The advance payment of a relocation stipend requires the authorization letter be attached to the stipend payment request.

  3. Taxable Reimbursement

    1. In accordance with IRS regulations, the payment of any relocation costs under this policy is considered taxable income and is subject to applicable income and employment taxes.
    2. Temporary or Indefinite Work Assignment
      1. Reimbursements or expenses for temporary assignments away from the tax home are generally not taxable to the employee as this is considered business travel.
      2. If the assignment is indefinite, the employee is considered to have moved their tax home to the new headquarter location. Reimbursements of expenses for indefinite travel are taxable (Rev. Rul. 93-86 and Rev. Rul. 99-7).
      3. The Internal Revenue Service looks at all facts to determine whether the travel assignment was intended to be temporary or indefinite (Rev. Rul. 93-86 and Rev. Rul. 99-7). The table below provides a summary of temporary and indefinite travel assignments.
        Table 1. IRS Travel Assignment
          Temporary Indefinite
        Duration (Note the assignment changes from temporary to indefinite at the point which university knows the assignment will exceed one year.) Expected to last one year or less Expected to last longer than one year
        Tax Home Permanent work site New work assignment location
        Meals and lodging Excludable from income Taxable
        Transportation - Expense Mileage and Parking Excludable from income Taxable
        Transportation - Commuting Mileage Taxable Taxable
        Expenses related to events not located at the permanent work site or the new work assignment, such as conference travel Subject to University Travel Policy Subject to University Travel Policy

        Units should contact their Human Resources Offices to ensure appropriate approvals, accounting and tax related issues are addressed and in place prior to the starting date of the temporary assignment.

        Units should account for each temporary assignment as a separate contract and use appropriate processing procedures (e.g., requisitions, billing).

    3. UW-Madison employees on assignment to another agency or institution may be eligible to receive supplemental compensation in lieu of reimbursement for meals, lodging, and transportation expenses, which may be paid directly to the employee with required deductions made or transferred for payment to UW-Madison.
    4. Supplemental compensation for periods exceeding a one-year period will become taxable to the recipient at the time the university knows the agreement will exceed one year.
    5. In the event that assignments change from temporary to indefinite, or indefinite to temporary, triggering a change in taxability to the employee, the Office of Human Resources must work with the UW System Service Center to ensure proper coding and tax treatment.

  4. Consequences for Noncompliance

    Failure to comply with UW-Madison policy or procedures may result in employee discipline up to and including dismissal.

Related UW-Madison Policies:
Related UW–Madison Documents, Web Pages, or Other Resources:
External References:

Policy Administration

Approval Authority:
Assistant Vice Chancellor of Business Services and Controller
Policy Manager:
Assistant Vice Chancellor of Business Services and Controller
Contact:
Departmental staff should contact their respective Divisional Business Office for policy questions. -- Divisional Business Officers may contact, expensereimbursement@bussvc.wisc.edu
Effective Date:
01-01-2018
Date Issued:
01-01-2018
Revised Dates:

07-01-2019, 01-01-2023, 11-08-2023, 07-01-2025

Reviewed Dates:

7-1-2019, 07-01-2025

Retrieved:
10-11-2025 06:17:50