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:
- 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 2009 is $106,800. 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 $106,800 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.