HR-222 Payroll Deductions

Summary

The University withholds deduction from payroll earnings dependent on the obligation or option of the employee, university policy, or as required by law.

HR Policy Provisions

Retirement Contributions Per Collected Rules and Regulations 530.010:
1. Per Section 530.010.A.10: A Member is defined as: “a person admitted to membership in the Plan in accordance with Section 530.010.B. There shall be two categories of Members, defined as follows:
  1. Level One Member is one who was initially hired prior to October 1, 2012, including one who was hired prior to October 1, 2012, earned a vested benefit subject to Section 530.010.E. or H., terminated service after earning such vested benefit, did not receive a lump sum payment pursuant to Section 530.010.K.13.a. or b.1), and is rehired by the University on or after October 1, 2010, but prior to October 1, 2019.
  2. Level Two Member is one who is hired or rehired on or after October 1, 2012 but prior to October 1, 2019 (except that a Qualified Member who was initially hired prior to October 1, 2012, earned a vested benefit subject to Section 530.010.E. or H., terminated service after earning such vested benefit, did not receive a lumps sum payment pursuant to Section 530.010.K.13.a. or b.1), and is rehired by the University on or after October 1, 2012 but prior to October 1, 2019, shall be a Level Once Member pursuant to paragraph a. above).
2. Per Section 530.010.T.1: Retirement, Disability and Death Benefit Plan, all qualified Members (as defined above in section A) who are Fully Benefit Eligible Academic Appointments and all Regular administrative, service and support staff will be required to contribute to the UM Retirement, Disability and Death Benefit Plan. Employees will be required to contribute 1 percent of the first $50,000 of eligible salary earned in a calendar year and 2 percent of any eligible salary earned in excess of $50,000 in a calendar year. Employee contributions will be deducted from employee payroll on a pre-tax basis.
3. For purposes of Member contributions, Salary shall have the meaning set forth in Section 530.010.D.1., including Section 530.010.D.1.f., except that Salary for purposes of Member contributions shall not include items of real income that are not paid as cash Salary, as described in Section 530.010.D.1.d. Member contributions shall not be deducted from Salary that exceeds the annual compensation limit under Section 401(a)(17) of the Internal Revenue Code, as described in Section 530.010.D.1.e.
4. Contributions shall be made only on Salary earned during the period an individual is admitted to membership in the Plan in accordance with Section 530.010.B. Member contributions will only be required of Salary earned on and after July 1, 2009.
5. Members contributions shall not be required to be made on amounts of Summer Appointment Salary that, for summer session salary earned prior to May 1, 2011, exceed two-ninths (2/9) of the Member’s Salary for the nine(9) month period immediately preceding Summer Appointment (or the nine (9) month period immediately following Summer Appointment if the Member’s first appointment is a Summer Session Appointment) or if the Summer Session Appointment is not immediately preceded by the Member’s appointment for a full Contract Year.
6. Member contributions shall only be required to the extent the Member receives Salary, including, but not limited to, periods of leaves of absences.
Tax Deductions
1. Federal, state and municipal earnings taxes and social security and Medicare taxes are automatically deducted from each payroll earnings check, as required by law.
2. Prior to the payment of any payroll earnings, each employee must file a federal and state withholding allowance certificate.
Optional Deductions
1. Optional deductions which an employee may authorize withheld from payroll earnings include:
  1. premiums and contributions to insurance and benefit plans approved by the Board of Curators;
  2. parking fees;
  3. charitable contributions;
  4. union dues;
  5. development fund; and
  6. approved credit union payments.
2. The Payroll Office maintains a complete list of authorized deductions and a schedule of deduction dates.
3. To add new deductions, submit a request to the Payroll Department.
  1. The request must include:
    
    a. specific details regarding the purpose of the deduction;
    
    b. the number of people anticipated to enroll;
    
    c. the account code to credit for collected funds; and
    
    d. the name of the person to be held responsible for collected funds.
FICA Deduction Exemption
1. Any undergraduate or graduate student enrolled at the University of Missouri at least half-time is exempt from FICA withholding, if the student’s employment is “incident to and for the purpose of pursuing a course of study,” as long as the services are performed for the University of Missouri.
  1. The term "half-time undergraduate student" has the same meaning as the term in the Department of Education regulations. For graduate and professional students, Department of Education regulations allow the University to establish what constitutes half-time status.
  2. The determination of a student's half-time status is made at the end of the drop-add period.
  3. In addition to being enrolled at least half-time at the University of Missouri, the student must be regularly attending classes to qualify for exemption.
2. Students who are also classified as "career employees" are not eligible for the exemption.
  1. The definition of a "career employee" is:
    
    a. an individual who regularly performs services for 40 or more hours per week;
    
    b. considered a “licensed professional employee” (i.e., “those requiring knowledge of an advanced type in a field of science or learning, the consistent exercise of discretion and judgment and one that is predominantly intellectual and varied in character”); or
    
    c. a benefit eligible employee as defined in HR-101.
3. The student FICA exception does not apply to students who are not enrolled in classes during school breaks of more than 5 weeks (including summer breaks of more than 5 weeks).

Further guidance is provided in the IRS Revenue Procedure 2005-11 and 26 CFR Par 31.

Summary

HR Policy Provisions

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