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Paying for Appointee's Moving Expenses

Related Policy: Relocating Employees

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

  • A lump sum
  • Reimbursing the employee for actual expenses
  • Pay the vendor directly for services provided

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 contract for transporting household goods, the vendor may be paid one of 2 ways:

  • The employee may pay the relocation costs directly and, provided the employee has not received a lump sum, apply for reimbursement after the move, substantiating all expenses with original receipts.


  • The department may elect to receive the invoice(s) and pay the vendor direct. Payments to vendors for moving expenses are on the Non-PO Related Payments List.

Some types of relocation reimbursements are not taxable and some are taxable. Reimbursements for taxable relocation expenses will be reported as income to the appointee, subject to the appropriate tax withholding. The employee should be informed of this. (See form BA 1357 for details.)

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. Forward all of this to Disbursement Services for imaging.
  • To pay a vendor directly: The cluster will enter the invoice into the Accounts Payable module of EFS and image the vendor invoice, the Moving Expense Reimbursement Form (BA 1357), and the original receipts. Use of the appropriate account code (Employee Relocation) ensures that the system will notify Payroll Services of the transaction.
  • 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 taxable and nontaxable 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 (both nontaxable and taxable) to the person's gross balances for withholding and reporting purposes.

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Last modified on November 11, 2014