You may notice variations in the amount of your net pay from one pay period to the next. Net pay differences may be related to a change in salary (i.e., gross pay), tax withholdings, or other deductions. In addition, you may see different net pay as a result of taxable benefits, tuition waivers, overpayments and other adjustments to pay. You can determine the cause of a difference by comparing your current and former earnings statements. You can see an earnings statement sample at: Sample Earnings Statement. Questions about variations in net pay can be directed to UPB via the University Payroll & Benefits Service Portal.
Salary Change
A change in salary such as a pay raise will result in a change in take-home pay. An increase or decrease in FTE (Full Time Equivalent) will also change the amount of pay you will receive.
Hourly Reporting
Employees who report time on an hourly basis will see differences in pay whenever a different number of hours are reported than usual. A change in the hourly rate, such as a pay increase, will result in a change in take-home pay. There may be a different number of hours worked, overtime, shift differentials, and many other possible types of pay that will result in a different paycheck than usual.
Adjustments
Pay may be adjusted to address other situations that will increase or decrease the regular paycheck, including;
- Stipends
- Union negotiated retroactive pay
- Overpayments and overpayment collections
- Leave availability
Changes in Tax Withholdings
The methodology for calculating tax withholdings may cause changes in your net pay, particularly at the beginning of the year. If you have any questions about changes in tax withholdings, please contact UPB.
Form W-4 Changes
Changes made to the Federal or State Form W-4 will result in different tax calculations, which will change the amount of net pay received.
FICA
FICA stands for the Federal Insurance Contribution Act, which is made up of Medicare and Old Age Survivors Disability Insurance (OASDI), commonly known as Social Security.
- Calculation of FICA taxes occasionally results in rounding differences of a penny or two.
- When an employee becomes SURS eligible, a SURS deduction will become effective and the OASDI deduction will be removed.
- When an employee becomes SURS ineligible, the SURS deduction will be removed and the OASDI deduction will become effective.
- Student workers who change between full-time and part-time enrollment will see Medicare active whenever the student status drops to part-time.
- High earning employees will see Medicare removed when the annual maximum withholding is reached.
Pre-tax Deductions
Pre-tax deductions reduce the taxable amount of gross pay on a paycheck. Whenever changes are made to these deductions, tax calculations will be affected.
Taxable Benefits
Employees receiving a benefit that has cash value will see additional taxes withheld after the taxable benefit is reported. There are many types of taxable benefits, but tuition waivers in particular have a significant impact on take-home pay due to the high value of the tuition being waived. See Tuition and Fees: Waivers, Departmental Payments, and Reimbursements for more information.
Third Pay Period
Whenever there are three paydays in a month, most voluntary insurance deductions will not be taken from pay (health, life, dental), resulting in more take-home pay than usual. These deductions are based on monthly premiums divided by two, and therefore no deductions will be applied to the third payday.
Parking Deductions
Parking deductions may be rounded up one cent ($.01) for bi-weekly employees depending on plan rates.
Optional State Life Insurance Plan Coverage/Premium Calculation
Due to rounding differences in the premium calculation for optional life insurance coverage, you may notice a minimal difference in your premium. You will also see a change when plan premiums increase upon moving into a new age range.
Taxable Life Insurance (Imputed Income/Excess Life)
If your salary exceeds $50,000, it is likely that you will notice a difference in your net pay due to the calculation of imputed income. Imputed income is the value of group-term life insurance coverage in excess of $50,000 according to the Internal Revenue Code. Imputed income is considered taxable income and is subject to federal and state income tax, SURS, and Medicare (if applicable) withholding.
Imputed income is calculated by
- Begin with the total amount of employer-provided group-term life insurance coverage.
- Subtract $50,000 from the total from step 1.
- Multiply the number calculated in step 2 by the appropriate IRS uniform premium rate, which is based on your age.
The most current uniform premium rates can be found on page 7 of IRS Publication 525. Imputed income/Excess Life is calculated in Banner once a month. Even if you are paid bi-weekly, you will notice the calculation of Excess Life once a month.
Involuntary Deductions/Tax Levies
Involuntary deductions are mandated by a court of law, federal or state government. In general, involuntary deductions, such as garnishments, amount to between 15%-25% of disposable income (earnings less mandatory deductions). Depending on how your involuntary deduction is structured, you may notice a difference in your net pay.
If you have a debt with an agency of the State of Illinois, you may have a State Offset deduction. These deductions result from an agency referring the debt to the State Comptroller. As a state agency making local payments, the University of Illinois is required to withhold these deductions for the State of Illinois. If you have a debt with the State of Illinois not previously collected or for back child support, you may see an increase in the amount withheld.
Employees With Both Monthly and Hourly Appointments
Employees with both monthly and hourly appointments will receive separate monthly and bi-weekly payments, which may affect their withholdings.
Leave By Job
Sick leave/vacation for Civil Service employees is accrued by Job rather than by Person. Due to rounding, an employee could accrue 0.01 hours more than the approximate rate per pay period as stated in policy. However, the employee will never go past the accrual maximum.
SURS
For high earners, SURS will stop after reaching the maximum pensionable earnings. SURS deductions will resume with the first payday of the new fiscal year.
403(b) and 457 Plans
If you reached your maximum contribution limit during the calendar year, your contribution deduction could be reduced or discontinued. Your contribution rate will return to normal levels beginning with the first payday of the next calendar year.
Long Term Disability (LTD) Plan
Rates for LTD vary based on age and salary and are adjusted each December. If your age puts you in a new rate tier or if you had a change in salary, your deduction may increase, effective with your December pay. To see the premium rates, visit the Long Term Disability page.
Accidental Death & Dismemberment Plans (AD & D)
Unless you've recently enrolled or changed your coverage amount, you should see no change in your deduction amount.
Life Insurance Plans
Premiums for optional life insurance vary by age and salary. Salary rates are adjusted each spring; however, if you've recently had a birthday, the rate based on your age may have increased and made your premium deduction higher. If you recently enrolled or increased your coverage, your insurance deductions may be higher than before. To see the premium rates, visit the Life & Disability Insurance page.
Change in Benefits Enrollment or Coverage
If you added, dropped, increased, or decreased coverage amounts due to a change in status, your statement may reflect this change. Your deduction may be higher or lower depending on the deduction amount associated with your benefits changes. When deductions for benefits are just beginning or ending, there may be a delay, depending on the timing of the changes. This could result in a period of deduction adjustments until all missed premiums have been collected or refunded. To see the premium rates, visit the Benefits page.
Flexible Spending Account Plans (MCAP/DCAP)
If you have been making contributions to MCAP/DCAP and had a deduction on your last statement, you should see no change in your deduction amount. If you recently enrolled as a new employee or made changes due to a qualifying event, your statement may reflect this difference.
Charitable Deductions
If you recently enrolled in or changed your charitable contributions as part of the State and University Employees Combined Appeal (SECA), your statement will reflect this difference. Depending on your change, your deduction may be higher or lower than before.
Questions about your earnings and gross pay can be answered by your college, administrative office, or Human Resources representative. If you have any questions about the deduction amounts reflected in your earnings statement, please contact UPB via the University Payroll & Benefits Service Portal.
Additional information about earnings statements, including a sample, can be found at: Earnings Statements.