Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL
A dean or equivalent administrator may approve a lump sum payment
for relocation compensation in order to recruit a qualified candidate who
must move in order to accept the position. The maximum payment amount is
limited by the existing resources available to the department or college.
The state of Washington and WSU offer other programs for supporting
domiciliary moves. See 70.61
In addition to relocation compensation, either or both of these programs
may be used to assist an employee who relocates to accept a WSU position.
Source of Funding
Relocation compensation may be supported by state accounts and
accounts in program 17A (discretionary accounts). Sponsored accounts (programs
11-14) may support relocation compensation if funding is specifically itemized
in the approved budget.
Federal law requires that employees pay taxes on the lump sum
relocation compensation payment. (P.L. 103-66) The University is required
to report relocation compensation on employees' W-2 forms.
If the employee terminates employment or causes termination
with WSU within one year of the employment date, the employee is responsible
for repaying the University for the full amount of the relocation compensation.
NOTE: Repayment is not required if termination is for reasons of layoff,
disability separation, or other good cause as determined by the Associate Vice President and Chief Human Resource Officer.
Payroll Services processes relocation compensation as additional
compensation to the employee.
The employing department processes a Relocation Compensation
Request to request payment. Access the PDF form template on 55.62.3
to complete and print the form.
Income taxes, social security, and Medicare taxes are deducted
from the total amount provided to the employee. The department indicates
the total payment amount under Total Relocation Compensation.
Payroll Services deducts the following from all payments:
Gross to Net
Payroll Services can calculate the compensation one of two ways, gross to
net or gross up. Either way, Payroll Services makes appropriate deductions
and remits and reports them to the federal government.
- Withholding tax (If the award is issued as a separate check, withholding tax is calculated at the supplemental rate of 25% of gross. If the award is paid with the employee's regular paycheck, withholding is calculated in accordance with the employee's W-4 declaration (see 55.10).)
- Social Security (6.2% of gross)
- Medicare (1.45% of gross)
Unless the gross-up method is specifically requested by the department in
Comments, Payroll Services assumes that the request is for calculation
using the gross-to-net method.
EXAMPLE: Using the gross-to-net method, Payroll Services would
generate a payment to the employee of $673.50 from a taxable gross relocation
compensation payment of $1000.
If the department wants the employee to actually receive a set
amount with taxes and withholding prepaid, Payroll Services would calculate
the necessary gross using the gross-up method. EXAMPLE: To generate a check
to the employee of $1000, the department would have to actually pay $1598.37,
i.e., $1484.78 gross and $113.59 in contributions.
Enter the account code for the account that will support the
relocation compensation and matching contributions for social security and
A dean or equivalent administrator approves payment.
The recipient of the compensation signs the form indicating
that he or she understands that a minimum employment period of one year
must be served in order to avoid repayment. See above.
Route the completed and approved form to Payroll Services, mail
See the PDF master form:
55.62.3: Relocation Compensation
Complete and print as needed