1-7: Relocation allowances

Effective: January 1, 2018
Revised: May 18, 2026
References: Administrative Code R477-6-7, Administrative Code R477-8-18, 1-1: Employee payments general policies and procedures

Purpose

This policy outlines the conditions and taxability of payments for employee relocation allowances.

This policy may not address the specific way to make a payment or the system to use. See policy 1-1: Employee payments general policies and procedures.

Definitions

Agency – Any agency, board, bureau, commission, office, department, or other administrative subunit of the executive branch of state government.

Commissioner – The executive leader of an agency.

Designee – The person who has written permission from the commissioner to act on the commissioner’s behalf.

Policy

A – Agencies may pay relocation allowances

1 – Agencies must pay a relocation allowance up to the equivalent of the estimated cost to move current employees when the change is involuntary and requires the employee to relocate or commute 50 miles or more beyond their current one-way commute.

2 – Agencies may pay a relocation allowance to move new employees to a new residence if the distance between their residence and the new job site is more than 50 miles.

3 – Relocation allowances are for the employee’s costs of relocating and are separate from the relocation bonuses outlined in R477-6-7.

4 – Agencies must document the maximum relocation allowance they are willing to pay in an offer, agreement, or email. Relocation allowances should not exceed $10,000.

4a – If an agency needs to pay a relocation allowance greater than $10,000, the agency must justify the increased amount.

B – Relocation allowances should not exceed $10,000 and must be approved

1 – Relocation allowances must be approved by the commissioner or designee before the allowance is offered to the employee.

1a – Evidence of the commissioner or designee’s approval can be on an agreement, offer, or email that indicates the maximum amount of relocation expenses the agency has agreed to pay.

2 – Agencies may require additional documentation and substantiation for approval of relocation allowances.

C – Employees must agree to repay relocation allowances

1 – Employees must sign an agreement to repay all relocation allowances if they terminate state employment or transfer to another agency within one year of their relocation.

1a – Commissioners or designees may waive the repayment requirement if they document their justification and approval.

D – Relocation allowances are taxable

1 – Relocation allowances are taxable and must be paid through the payroll system.

2 – If a relocation allowance is needed before the employee receives their first paycheck, the agency may pay the allowance through Vantage Financial, but they must report the amount to payroll for inclusion in the employee’s taxable income.