Supplemental Benefits
University-Provided Clothing and Clothing Allowances to University Employees Policy - 2E2
- Introduction
This Policy sets forth the standards applicable to University-provided clothing for employees to address compliance with tax and other applicable statutes and rules. - Policy Overview
The Value of any clothing and uniforms provided by the University to employees (which for purposes of this Policy shall include full-time, part-time, student workers and Graduate Assistants) will be treated as taxable income to the employee unless certain exclusions apply. - Definitions
"Value" means the total amount paid by, or total cost to, the University for the clothing or uniform item(s) and decorating of item(s). - Process Overview
- All University departments and administrative units are required to follow applicable IRS rules that pertain to the tax treatment of employer-provided clothing and uniforms.
- The Value of any item of clothing or uniform provided by the University to an employee must be treated as taxable income to that employee unless an Exclusion applies. University departments are responsible for notifying their employees of the value of any taxable amount that applies.
- Exclusions
- Working condition fringe benefit exclusion
- The Value of an item of clothing or a uniform provided by the University to an employee will be treated as non-taxable and thus excludable from income if the following requirements are met:
- The employee must wear the clothing or uniform as a condition of employment. To meet this requirement, the University must specifically require the employee to wear the clothing or uniform as a working condition; and
- The clothing or uniform must not be suitable for everyday wear. To meet this requirement, the clothing or uniform must not be suitable for taking the place of regular clothing.
- The employee must wear the clothing or uniform as a condition of employment. To meet this requirement, the University must specifically require the employee to wear the clothing or uniform as a working condition; and
- Examples or clothing and uniforms that meet the working condition fringe benefit exclusion include, and are not limited to:
- Clothing required to be worn for the employee's safety and protection while on the job, including steel-toed boots, work gloves, hard hats, safety glasses, and other clothing required by OSHA regulations.
- Uniforms worn by campus safety officers and health care professionals.
- Uniform/clothing issued to an employee, kept, and cleaned on University Premises. Uniform/clothing is only worn on University Premises and employee does not assume personal possession of it.
- Sport-specific and/or weather-related clothing worn by athletics coaches and staff while officially representing the University during recruiting, practice, or competition.
- Clothing required to be worn for the employee's safety and protection while on the job, including steel-toed boots, work gloves, hard hats, safety glasses, and other clothing required by OSHA regulations.
- The Value of an item of clothing or a uniform provided by the University to an employee will be treated as non-taxable and thus excludable from income if the following requirements are met:
- De minimis fringe benefit exclusion
Clothing and uniforms provided by the University to an employee will be considered de minimis and treated as non-taxable and thus excludable from income if the following requirements are met:
- The clothing and uniforms are provided to the employee infrequently; and
- The aggregate Value of the clothing and uniforms provided to the employee is less than $150 per calendar year. The $150 threshold has been established by determining that any amounts below that level would be administratively impractical to administer.
- The clothing and uniforms are provided to the employee infrequently; and
- Working condition fringe benefit exclusion
- The reporting of employer-provided apparel/clothing is based upon receipt of apparel/clothing by the employee that is not de minimis. Once taxable apparel/clothing has been reported to the University Payroll Office by University departments, the Value of the clothing will appear as a line item, "Clothing—Non-Cash", under the Earnings Section on the employee's pay stub for the pay period in which the apparel item is reported to payroll (or shortly thereafter). The Value will be included in taxable wages and subject to applicable income and employment taxes.
- Any stipend or cash allowance provided to an employee for clothing or uniforms is taxable income to the employee. There are no exclusions to stipends or cash allowances. Any such stipend or cash allowance will be reported to the University Payroll Office by the department.
- All University departments and administrative units are required to follow applicable IRS rules that pertain to the tax treatment of employer-provided clothing and uniforms.
- Resources
Internal Revenue Service Taxable Fringe Benefit Guide.
Approved by Chancellor effective 2/13/25
This policy was issued on February 21, 2025.
Document Reference: 2E2
Origin: OC 2/13/25