Payroll Deductions

Employees complete a Form W-4 with Human Resources when hired, which establishes the federal tax status (single or married) and the number of dependents claimed. Additional federal income taxes can be withheld by completing line 5 on the Form W-4. For more information on completing the W-4, visit www.irs.gov. Employees claiming to be exempt from federal income taxes must refile a Form W-4 claiming the exemption by Feb. 15 of each year.

The W-5 Earned Income Credit (EIC) is no longer being credited with your regular check. For more information on the EIC credit, You may reference the www.irs.gov website .

A state withholding form is also completed at the beginning of a person's employment to establish the amount to be exempt from state income tax withholding.

Any changes in federal or state income tax withholding may be made either in the Payroll office or the form located in the employee self-service site may be completed, printed and forwarded to Payroll. Changes can be made to federal or state withholding at any time during the year.

Social Security is taxed at 4.2% of the gross wages less any cafeteria plan amounts up to an annual maximum limit. The Medicare tax rate is 1.45% of the gross wages less cafeteria plan deductions with no yearly maximum. The social security and medicare taxes, also called employment taxes, are mandatory withholdings from each employee's pay, with the possible exception of student employees or non-resident aliens.

Non-taxable benefits

State retirement is withheld from an employees pay at the rate of 9.00% of the gross wages. UMMC matches the employee contribution with 12.00% of the employee's gross wages. This withholding is mandatory, except for all part-time (<20 hours per week) employees.

Other non-taxable benefits include Tax Sheltered Annuities and Deferred Compensation. For additional information on these benefits, please contact the Benefits Department.

The calculations for taxable wages using the cafeteria plan are as follows:

Taxable benefits

A taxable benefit may be created as a result of tuition payments, student nursing loans and life insurance policies with a face value over $50,000. The dollar amount for each type of benefit is added to an employee's taxable gross income before computing the tax to be withheld. The employee is not repaying the benefit amount. He is only being taxed on this amount for Social Security, Medicare, federal and state purposes. The total withholding may vary between 10% to 35% of the benefit amount due to the total income level of the employee.

The employee tuition benefit is the amount of tuition paid by UMMC for courses taken at UMMC by full-time faculty and staff. The tuition amount is added to the employee's taxable gross after registering for the course.

The Health Care Professions Student Loan Program pays money to nursing students with the provision that the students will work at UMMC upon graduation for a period of one to two years. $2,500 is given to a student for each year of the service commitment. This money is taxed to the employee over the period of the time commitment, usually resulting in $96.15 ($2,500 / 26 pay periods in one year) being taxed on each biweekly payroll.

Some moving expenditures paid by UMMC for employees may also create taxable benefits. The cost of the reimbursed moving expense is added to the employee's taxable wages for computing taxes to be withheld.

Life insurance policies with face values over $50,000 may result in a taxable benefit. The Lamar Life policy has a fixed premium rate for all employees regardless of each employee's age. The taxable benefit is created when this fixed rate is lower than the rate that the IRS regulations state that the employee should have paid based on their age bracket. The older the employee is, the higher the IRS rates are. The taxable benefit amount is the difference between the employee's premiums paid for the life insurance and the IRS table amount for the total face value of the policy.

Insurance deductions

Insurance deductions, along with ORP, Deferred Comp, Annuity and Savings Bond, are approved and processed by the Benefits Department. Please check the Benefits' Intranet site for additional information regarding these deductions.

Other deduction

Legal deductions are to be taken in the priority order as defined by federal and state regulations. When a higher priority order on an employee is received than the one already being deducted, the existing deduction priority is lowered and the highest priority is deducted first. The following list is an example of those legal deductions.

• Child support
• Bankruptcy Chapter 13
• Federal tax levy
• State tax levy
• Local tax levy
• Creditor garnishments

• Automatic payroll deduction enrollment

  All part-time and full-time UMMC employees are automatically enrolled in the benefit allowing payroll deductions for on-campus UMMC outlets. Currently, those outlets include all food and nutrition locations, bookstore, pharmacy (Medical Mall, Meds and Threads and UP Pavillion), Quick Care clinics, UP Pavillion and UP Lakeland locations.
  
  The charge limits per payroll are:

  • Part-time biweekly - $50
  • Part-time monthly - $100
  • Full-time biweekly - $200
  • Full-time monthly - $300

  To discontinue participation in this benefit, click on "Payroll Deduction" in the employee self-service and opt out of the benefit.

• Business office

  Amounts owed by employees to the hospital through Patient Accounts may be repaid through a Business Office deduction.

• Charitable contributions

  Donations may be made through the Voluntary Health Agencies Drive during their campaign each year to the following agencies:

  • American Cancer Society
  • National Kidney Foundation
  • Mississippi Lung Association
  • Mississippi March of Dimes
  • United Way

  Pledges can be made to these organizations online. A campaign is held each year for contributions to be deducted.
  
  Employees can specify a dollar amount to be taken out of each payroll check, or they can set up a one-time deduction. Pledges are for a one-year period.

• Garnishments

  Garnishments are deducted after receiving a "Writ of Garnishment" from the Human Resources department beginning 30 days after the date of the document. Garnishment amounts on an employee are accumulated and forwarded to the court or individual as ordered by the unit of garnishment.
  
  Garnishments are calculated on:

  • Gross wages less (Social Security, federal withholding, state withholding and state retirement. (Gross-Soc.Sec.-Fed W/H-State W/H-State Retire = Amount subject to garnishment)

• Parking

  Employees assigned parking spaces on campus are charged either per month through a payroll deduction. Parking fines are also collected through payroll deductions.