Please see the following excerpt from the USG Business Procedures Manual regarding deductions for 10 month employees. Ten month employees receive benefits for all twelve months of the calendar year, however, they only receive 10 paychecks. As a result, deductions must be taken at an accelerated rate so that we may collect all the money due for the deductions chosen by the employee. This is called the 7/5 rule and is explained below. If you have any additional questions, please email us at payroll@highlands.edu.

5.1.4 Withholding Schedule for 10 Month Contract Employees

(Last Modified on October 12, 2010)

Ten (10) month contract employees are considered full-time employees, and they receive benefits for twelve (12) months, based upon the assumption that their contract will be renewed for the next academic year. Payroll deductions for fringe benefits must aggregate 12 months of deductions within a 10 month salary delivery period. Normally, a contract begins in August and ends in May, with benefits continuing during June and July if the contract is renewed.

Deduction Schedule

For the months of August through December, the deduction amount will be (1/12) multiplied by (5/5) multiplied by the annual deduction amount. For the months of January through May, the deduction amount will be (1/12) multiplied by (7/5) multiplied by the annual deduction amount.

If this schedule is followed, 12 months of benefit deductions will have been taken at the end of the 10 month contract.