Employees must submit the proper forms so that the College may withhold
required payroll taxes. The
College is responsible for deducting and remitting to the government
the following
payroll
taxes:
- Federal
- State
- FICA - Social Security
- FICA - Medicare
Federal taxes for regular
pay including overtime, vacation, sick, etc. are calculated by the Banner
payroll system based upon the information employees submit on the W-4.
For
all non-regular
pay,
such
as bonuses,
severance, and stipends, federal taxes are withheld
at the supplemental
rate of 25%.
The Payroll
department may not manually adjust federal taxes withheld due to liability
for potential penalties associated with underwithholding taxes.
FICA taxes are comprised of
social security and Medicare taxes. The social security wage base
limit for 2008
is $102,000. There is
no wage base
limit
for Medicare
tax.
The
tax
rate
is
6.2% for social security and 1.45% for Medicare tax. Students are exempt
from FICA taxes during the academic year.
State taxes are deducted based upon the information
employees submit on the W-4 or M-4. . A M-4 is necessary only
if you wish
to claim a different number
of exemptions for Massachusetts.
All taxes are calculated based on taxable income. For most employees,
your federal and state taxable income are determined by taking your
gross income and subtracting
your pre-tax
deductions (health, dental, dependent care, medical, and SRA)
and adding your imputed income i.e. life insurance coverage. SRA deductions
are subject to FICA taxes. Therefore, you need to add your SRA
deduction back to your federal taxable income to arrive
at FICA wages with a maximum of $102,000 for wages subject to social security.
Employees should complete and sign a W-4 (and M-4, if claiming
a different number of exemptions for Massachusetts) to claim their
appropriate tax status and exemptions. The completed form(s) should
be forwarded to Payroll, Green Hall 150 for processing.
If you have
any questions about what you have claimed, you may view your submitted
exemptions online in Banner Web for Employees. After you have logged
into the system, click on Employee Services, followed by Tax Forms,
and finally W-4 Tax Exemptions/Allowances.
