Policies and Procedures
Policy 1108 – Statutory Deductions
January 9, 2004
September 3, 2009
Director of Payroll Services
Payroll Services is responsible for withholding, reporting, and remitting the following statutory (required by law) deductions from employee pay:
- FICA (Social Security) contributions
- Retirement contributions
- Federal and State income tax withholding
With the exception of student employees and certain Non Resident Aliens (NRA) that have tax treaty benefit, all employees are subject to FICA contributions.
II. Retirement Contributions
Permanent SPA Employees
By State law, membership in the Teachers' and State Employees' Retirement System (TSERS) is mandatory for all SPA permanent full- or part-time employees working more than 30 hours per week. Withholding contributions for each of these retirement programs is six percent of the employee’s gross earnings plus an employer-matching deduction defined annually by the State Legislature and submitted to the retirement system for monthly credit to individual accounts.
Fulltime EPA Employees
III. Income Tax Withholding
In accordance with Federal and State laws, Payroll Services withholds amounts for federal and state income taxes based on tax withholding schedules and the information submitted by each employee on the completed W-4 and NC-4 forms.
Taxes are not withheld on retirement contributions as the State Retirement Plan is administered as a tax shelter for employees.
Effective January 1, 1987, taxes and Social Security are not withheld from the employee's health insurance deduction, unless the employee declines this pre-tax option.
In performing tax calculations, Payroll Services considers the combined total, or aggregate sum, of an employee's regular and supplemental pay and takes into consideration exemptions claimed. Payroll Services will process payroll deductions imposed by State and Federal law, and uphold participation in direct deposit of salaries, required by new employees of the University.
Reason for Policy
The University provides this policy to inform employees of mandatory deductions.
1. Temporary and part-time SPA employees working under 30 hours per week are ineligible to participate in TSERS.
2. Extension employees who are members of the Federal Employees' Retirement System are ineligible to participate in TSERS.
For information regarding FICA Exemptions for student employees, see Policy 1111.
For information regarding payroll processes for foreign nationals, see Policy 1116
Frequently Asked Questions
Benefit Programs Administration provides more detailed information regarding retirement programs.
|Statutory Deductions||Payroll Servicesfirstname.lastname@example.org|
September 3, 2009
May 29, 2007
May 26, 2005