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Compensation (HR-200)

HR-222 Payroll Deductions

Summary

Federal, state and municipal earnings taxes and social security and Medicare taxes are automatically deducted from each payroll earnings check, as required by law. Prior to the payment of any payroll earnings, each employee must file a federal and state withholding allowance certificate.

Contributions to the UM Retirement, Disability and Death Benefit Plan:

All Fully Benefit Eligible Academic Appointments and all Regular administrative, service and support staff will be required to contribute to the UM Retirement, Disability and Death Benefit Plan. Employees will be required to contribute 1 percent of the first $50,000 of eligible salary earned in a calendar year and 2 percent of any eligible salary earned in excess of $50,000 in a calendar year. Employee contributions will be deducted from employee payroll on a pre-tax basis.

Optional Deductions

Optional deductions which an employee may authorize withheld from payroll earnings include: premiums and contributions to insurance and benefit plans approved by the Board of Curators; parking fees; United Way contributions; union dues; development fund; and credit union payments. Contact the Payroll Office for a schedule of deduction dates.

The Payroll Office maintains a complete list of authorized deductions. To add new deductions, submit a request to the Payroll Department. The request must include specific details regarding the purpose of the deduction, the number of people anticipated to enroll, the account code to credit for collected funds, and the name of the person to be held responsible for collected funds.

Student FICA

Any undergraduate or graduate student enrolled at the University of Missouri at least half-time is exempt from FICA withholding, if the student’s employment is “incident to and for the purpose of pursuing a course of study,” as long as the services are performed for the University of Missouri. The term "half-time undergraduate student" has the same meaning as the term in the Department of Education regulations. For graduate and professional students, Department of Education regulations allow the University to establish what constitutes half-time status.  The determination of a student's half-time status is made at the end of the drop-add period. In addition to being enrolled at least half-time at the University of Missouri, the student must be regularly attending classes to qualify for exemption.

Students who are also classified as "career employees" are not eligible for the exemption. The definition of a "career employee" is an individual who regularly performs services for 40 or more hours per week; is considered a “licensed professional employee” (i.e., “those requiring knowledge of an advanced type in a field of science or learning, the consistent exercise of discretion and judgment and one that is predominantly intellectual and varied in character”); or is a benefit eligible employee as defined in HR 101.  

The student FICA exception does not apply to students who are not enrolled in classes during school breaks of more than 5 weeks (including summer breaks of more than 5 weeks). Further guidance is provided in the IRS Revenue Procedure 2005-11 and 26 CFR Par 31.

Date Created: 09/26/1997

Last Updated: 09/15/2013