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Communication Allowance Program

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POLICY

This policy provides the procedures and allowance rates for reimbursement of costs related to personal communication devices used by employees. This policy results in each user having both freedom of choice and personal responsibility for his/her cell phone plan. It will also enable the university to comply with Internal Revenue Service rules regarding the taxability of employee personal communication devices.

Employees whose responsibilities require that they use a personal communication device will be reimbursed a flat monthly rate. This policy will allow the university to comply with the Internal Revenue Code Section 280F(d)(4) relating to “listed property” and the proper taxability of certain payments/reimbursements.

Cell phones and other personal communication devices should not be selected as an alternative to other means of communication when alternatives would provide adequate but less costly service to the university and improve face-to-face communication.

FORMS

Cell Phone Allowance Withholding Exemption Request
Monthly Communication Plan Allowance Enrollment

PROCEDURE

1. Establishment and Payment of Allowance

   If a university employee’s job includes the frequent need for a cell phone or personal communication device, then the employee is eligible for an allowance to cover cell phone expenses. It may be requested using the Allowance Request form

   Please note: The monthly allowance will vary from $40 to $90, depending on need. This allowance does not constitute an increase to base pay, and will not be included in the calculation of percentage increases to base pay or in benefit calculations.

   Cell phones are a taxable employee benefit, and payroll tax will be withheld on cell phone allowances. Employees may claim exemptions for cell phone business use when they file their personal income tax. Employees may also analyze their monthly bills to determine the proportion of business use, and request an exemption of that portion from payroll withholding. Please use the Cell Phone Allowance Withholding Exemption form to report the portion of business use. This will reduce the taxable portion of this benefit.

2. Determination of dollar amount of allowance

   The dollar amount of allowance should cover the employee’s projected business-related expenses. These expenses include the cost of basic equipment and the cost of the employee’s monthly cell phone plan. The plan chosen should be the least expensive that provides adequate business-related services. Upgrades to basic equipment (special cosmetic or technical features, etc) or expected cell phone use unrelated to business cannot be considered. Determination of the dollar amount of the allowance is made at the department level, but must be within the guidelines and dollar limits established under this policy.

3. Use of phone

   The employee must retain an active cell phone contract as long as a cell phone allowance is in place. Because the cell phone is owned personally by the employee, and the allowance provided is taxable income, the employee may use the phone for both business and personal purposes, as needed. The employee may, at his or her own expense, add extra services or equipment features, as desired.

   Use of the phone in any manner contrary to local, state, or federal laws will constitute misuse, and will result in immediate termination of the cell phone allowance.

4. Documentation and review requirements.

   The Allowance Request form and a copy of the employee’s most recent cell phone/personal communication device invoice must be submitted to the Business Office to initiate the allowance.

Questions regarding this policy should be directed to Human Resources.