Exempt - Monthly Pay moving to a Bi-Weekly Pay Cycle
The Human Resources and Payroll module of project BOOST launched in December 2012. The changes described below are related to this project.
As per the November 1, 2012, notice you received from Cherie Cryer and Nancy Eshleman, all exempt professional staff are moving from a monthly pay cycle to a bi-weekly pay cycle. That means that your gross earnings will change. Instead of receiving 1/12 of your annual salary once per month, you will receive 1/26 of your annual salary every other Friday beginning January 25, 2013 (with the first 13 paychecks being reduced for a one workday pay overlap as explained in the November 1, 2012, notice available from http://www.fandm.edu/humanresources/pay-practices).
This means that your deductions will also change in the following ways:
- Taxes: all taxes, except for local services tax (LST), use a percentage-based calculation and they will automatically calculate on the new bi-weekly earnings figure. LST ($52 per year) will now be deducted over 26 pays instead of 12. With the passage of the American Taxpayer Relief Act of 2012, changes to federal tax rates were adopted for 2013. Changes include income tax withholding rates, the social security tax rate increased to 6.2% from 4.2%, and the Medicare tax rate increased to 2.35% from 1.45% for wages exceeding $200,000.
- Health and dental premiums: a year’s worth of premiums deductions will be deducted over 26 pays instead of 12. Below are the premiums for 2013:
HEALTH
PPO Health Plan $1,000 + HRA:
- $32.84/per pay - employee only
- $53.47/per pay - employee + 1 dependent
- $87.54/per pay - employee + 2 or more dependents
PPO Health Plan $300:
- $48.30/per pay - employee
- $78.62/per pay - employee + 1 dependent
- $128.83/per pay - employee + 2 or more dependents
DENTAL
- $12.13/per pay - employee only
- $21.22/per pay - employee + 1 dependent
- $31.71/per pay - employee + 2 or more dependent
- Flexible Spending Account, TIAA-CREF retirement plan contributions, United Way contributions, and FPS contributions to the College: the annualized amount you requested to be withheld from your paychecks will be deducted over 26 pays instead of 12. The total annual amount will not exceed the annual contribution you requested.
Please note:
As per Nancy Eshleman’s November 6, 2012, e-mail, if you did not request a special pay advance to be paid on January 11, 2013, your first bi-weekly paycheck for 2013 will be on January 25, 2013. You will receive 25 paychecks during 2013 instead of 26.
If you are enrolled in the College's health plan, dental plan, or Flexible Spending Accounts plan, your premiums and contributions will be "double-deducted" from your pay issued on January 25, so that you have the equivalent of 26 deductions during 2013. Because eligible full-time staff will have benefits coverage throughout the entire calendar year, we must take 26 deductions from your pay during 2013. These "double-deductions" will lower your net wages for your January 25 pay. Again, this only applies if you did not elect to receive a pay advance on January 11.
Additionally, if your January 25, 2013, paycheck is different from your December 21, 2012, paycheck, please check if any of the following items have occurred:
- Did you make a change to your federal Form W-4 (income tax filing status, number of exemptions, and/or extra tax withholding from each pay)?
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Health and dental premiums:
- Did you select a different plan type or change the number of dependents?
- Even if no change was made, the premiums for your current plan changed effective 1/1/13.
- Were there any new voluntary deductions that you requested for calendar year 2013? Or did you discontinue any voluntary deductions that you had in calendar year 2012?
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Did you make a change to your annual election for any of the following:
- Flexible Spending Account
- Retirement contribution
- United Way contribution
- FPS gifts to the College
- Did you experience a change to a stipend payment or did your rate of pay change?
- Taxable life insurance: life insurance coverage in excess of $50,000 has always been treated as taxable income to you, but in Banner, the annualized cost of the coverage in excess of $50,000 will be allocated and added to your gross wages once a month instead of every paycheck. So you will see a slight change in your net pay from bi-weekly pay to bi-weekly pay due to Social Security and Medicare taxes being withheld once a month.
If there are differences between your December and January paychecks that you cannot explain after reviewing this information, please contact Denise Orrison in Payroll at 291-3928 or email her at dorrison@fandm.edu.
