INSURANCE WITHHOLDING SCHEDULE FOR 10 MONTH EMPLOYEES

Please see the following excerpt from the USG Business Procedures Manual regarding deductions for 10-month employees. Ten month employees receive benefits for all 12 months of the calendar year, however, they only receive 10 paychecks. As a result, deductions have to 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 Academic Year Employees            

(Last Modified on January 23, 2018)

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

Deduction Schedule

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

By following this schedule, 12 months of benefit deductions will be taken at the end of the 10-month contract.

Tracy Grigsby

Payroll Accounting Analyst