Some faculty and staff members are seeing more federal and state tax money withheld from their paychecks after the University converted its payroll to a new software system last month.”This is not a result of anyone getting a pay cut,” Mike Naquin, assistant vice president for finance and controller, said. “Their salaries are not getting adjusted at all.”
The University’s previous payroll system, HRS, calculated employees on either a 12-month or nine-month basis, meaning they work 12 months or nine months out of the year. However, the University’s new software system, Banner, can only calculate employees over a 12-month basis, which changed the withholding amounts for nine-month faculty and staff members.
More than 300 employees that used to be paid on a nine-month basis are now seen as 12-month employees in the Banner system, Naquin said.
“If a person is making $1,000 a month, and they earn that for nine months, the Banner system looks at it as if they make $1,000 a month for 12 months, and it puts them in a higher income bracket,” Naquin said.
Thus, when withholdings are calculated based on employees’ annual salaries, the amount that is withheld per check is consequently greater, Naquin said.
The Controller’s Office informed faculty and staff members of the issue via an e-mail sent out last month and again during a faculty senate meeting last week.
“We went to the faculty senate to let them know we were working on a possible solution,” Naquin said. “Whether that solution would be a permanent electronic solution or adjusting W-4 forms, we weren’t sure.”
SunGard, the company that created Banner, notified Naquin that the only possible fix would be for employees to adjust their withholdings manually, which can be done via a W-4 form in the Controller’s Office. On Wednesday, eight faculty members had made adjustments.
SunGard has a formula faculty members can use to compare their previous HRS withholdings to their current Banner withholdings to decide how much they want to adjust their W-4 form, Naquin said. But it is up to the faculty and staff whether they want to take that step.
“I’ve already adjusted my tax forms so my February paycheck will be more like my December paycheck. The difference was more than $100,” Russell Price, assistant professor of history, said. “Other people were affected more, and others were affected less.”
Faculty members who choose to leave the withholdings in Banner are liable to receive more money back at the end of the fiscal year, while employees who want to withhold less money from their checks are more likely to pay money through income taxes, Naquin said.
“Each individual is different because each has his own tax liability,” Naquin said. “They may have other income and other deductions to where they may want to leave the extra withholdings so they don’t have to pay at the end of the year.”
Despite the option to adjust the withholdings, Price said the conversion has been “more of an inconvenience than anything.”
“Most people are just letting it go, and they won’t see that [withheld] money until their tax return in 2011,” Price said.
Naquin said before the University converted to Banner, “one of the things that was discussed was the tax tables would be calculated differently, but I don’t know if they knew what the end result would be.”
Faculty members who wish to adjust their withholdings before February payroll can do so by Feb. 9 at 2:30 p.m.
