Supplemental Payroll Processing
Supplemental payments (or extra pay for employees) are processed on the bi-weekly pay cycle. These payments include:
1. Service Contract Agreements - Employees who receive an award or provide additional service(s) to the University (not under their normal contract and done outside of their normal working hours) are paid and taxed through Payroll via a Service Contract Agreement. Service Contracts should only be used for active employees, single activities, and administrative teaching assignments. This agreement should NOT be used for dual employment, temporary salary increases, or a temporary increase of working hours for an employee. Federal income tax is withheld at a flat rate of 25% for supplemental payments/wages (See IRS Publication 15). Social security, Medicare, and retirement (TRS/ORP) contributions (if applicable) are also withheld from most supplemental payments.
2. Lump Sum Vacation and/or Overtime Compensatory Time (OCT/Comp Time) Payout - If an employee resigns from their position and has accumulated vacation hours and/or OCT/comp time, these hours are paid to the employee and taxed through Payroll on the bi-weekly pay date following their final paycheck. If an employee transfers from a non-exempt to an exempt position and has accumulated OCT/comp time, these hours are also paid to the employee on the bi-weekly pay date following their final paycheck from their non-exempt position. For more information regarding OCT, click here. The Payroll Office must receive approved/completed documentation from the Office of Human Resources, which specifies the amount of hours that are due to the employee, in order to issue payment. Federal income tax is also withheld at a flat rate of 25% for lump sum payouts (See IRS Publication 15). Social security and Medicare taxes (if applicable) are also withheld from lump sum payouts.
For questions regarding supplemental payroll processing, please contact the Payroll Office at ext. 2369 or 2375.