[pps-news] Payments Subject to Supplemental Tax Withholding Rate When Paid Separately

[Roberta Nardico]

July 16, 2008

 

TO:       All Departments

 

FR:       Payroll Office

 

RE:       Payments Subject to Supplemental Tax Withholding Rate When
Paid Separately

 

 

This information is being sent to you as a reminder due to recent
inquiries regarding the taxation of supplemental wages.  In accordance
with the Internal Revenue Service Publication 15 (Circular E, Employer's
Tax Guide) and State of California Employment Development  (DE 44MM,
2008 California Employer's Guide), wages made under these Description of
Service codes (DOS) are always subject to the supplemental tax
withholding rates when they're paid separately from the employee's
primary pay schedule. 

 

When supplemental and regular wages are combined for the current month,
the income tax withholding is figured on a single payment.   Withholding
will be at the graduated rates based on marital status and allowances
claimed on the W4.

 

I.    If the following DOS codes are paid separately, withholding for
Federal tax is at a flat rate of 25% and 6% for State tax (no other
percentages are allowed)

 

A.	SUMMER SALARY

1.       OLN - Additional Compensation-Research

2.       OLT - Additional  Compensation-Teaching

3.       OLS - Additional Compensation-Teaching

4.       ADL - Additional Compensation-UNEX

 

B.	OVERTIME 

1.  OTP - Overtime Premium

2.  OTS - Overtime Straight

3.  OCT - On Call Time

4.  CMP - Comp Time Paid

5.  OTH - Overtime At Half

 

C.	OTHER

            1.  LSI - Lump Sum Incentive

            2.  SMP - Supplemental Military Pay

            3.  RIP - Relocation Incentive Pay

            4.  VTL - Voluntary Term-Lump Sum

            5.  VTS - Voluntary Term-Severance

            6.  ITL - Involuntary Term-Lump Sum

            7.  ITS - Involuntary TRM Severance

            8.  SAE - Severance-Active-Employee

            9.  EHA - Employee Housing Allowance

          10.  FHA - Faculty Housing Allowance

          11.  MV2 - Moving Expense AP

          12.  BXC - Academic Student Employee Childcare

          13.  MOV - Non Exclusive Move Expense-Pay

          14.  PSZ - Staff Phys Shift Incentive

 

 

II.   If the following DOS codes are paid separately, withholding for
Federal tax is at a flat rate of 25% and 9.3% for State tax (no other
percentages are allowed).

 

A.	 INCENTIVE/DEVELOPMENT AWARDS

5.       TIA - Team Incentive Award

6.       SRD - Staff Recognition Award

7.       PDA - Prof Development Award

8.       SPA - Special Performance Award

9.       NDI - Non Discretion Award SRDP

10.   SAP - Student Award Program

11.   LEA - Local Employee Award

12.   NDL - Non Discretion Award Local

13.   SAL - Student Award Program-Local

14.   TIL - Team Incentive Award Local

 

B.	BONUS

            1.  BON - Bonus (hire & refer)  

            2.  ABP - Student Bonus - SRDP

            3.  ABL - Student bonus - Local

            4.  HBO - Hiring Bonus

            5.  RFB - Referral Bonus

            6.  SGB - Sign-On Bonus

 

If you have any questions, please call the Payroll office at X1943.

 

Thanks, 

 

Roberta Nardico

Payroll Supervisor          

 

 

                        

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