Calculating Net Pay

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Calculating Net Pay

• Department of Education
• Office of the Commissioner
• Division of Human Resources
• Alscess Lewis-Brown, Director-Division of Human
  Resources
• Joy A. C. Williams, Assistant Director- STX
• Nicole Jacobs, Acting Assistant Director STTJ
• By Carmen M Miray Marcano
• Resource Specialist

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Important Terms
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• School Calendar Year
• Refers to the 10 month school year beginning in
  late August and ending in early June.
• Calendar Year
• Refers to year beginning in January ending in
  December.
• Prorating
• To divide, distribute, or assess proportionately.
• Annual Salary
• Total of yearly gross payments.
• Gross Pay
• Total pay before deductions, reductions and taxes
  have been subtracted.
• Net Pay
• Take - home pay after reductions, taxes and
  deductions have been subtracted from your gross
  pay.

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This presentation will based on a teachers
Annual Salary.
Formulas in this presentation hold true for all
Annual Salaries.
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Teachers Approximate Annual Salary
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Your Annual Salary is Prorated

• As a teacher, your position requires your
  presence on planning days and on school calendar
  days, you will therefore work 190 days (10
  months).

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Prorated Salary

• When you are hired you are given an annual salary
  based on a complete contract year.
• A complete contract year for a teacher begins in
  August and ends in June
• Annual salary however, is prorated into 26 pay
  periods covering the entire Calendar year.

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Prorated Salary

• If you begin working after the beginning of the
  school year calendar, your salary will be
  prorated based on the number of days you will
  actually work.
• Your pay periods will be prorated to end at the
  end of the contract year (June).

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Prorated Salary

• Formula for Salary prorating
• a. Your annual salary is ___________.
• b. Your position is_______ days.
• c. Your daily rate of pay is _____ (A divided by
  B).
• d. You will work _____ days (based on your
  beginning date).
• e. You will earn _____(C multiplied by D).
• f. This will be divided equally by ___checks
  (number of pay periods remaining in the contract
  year).
• g. Your gross pay per pay period will be ___(E
  divided by F).

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Estimated Prorating

• Estimated Prorating BA 5 years
• Annual Salary 32, 841.00
• 190 days
• 32841/190 172.85 per day
• 114 (Estimated days beginning in January)
• 172.85 x 114 19,704.90
• 13 pay periods remaining (beginning in January
  ending June)
• 19,704.90 / 13 1,515.76 (estimated gross pay
  ending June)

• Formula for Salary prorating
• a. Your annual salary is ___________.
• b. Your position is_______ days.
• c. Your daily rate of pay is _____ (A divided by
  B).
• d. You will work _____ days (based on your
  beginning date).
• e. You will earn _____(C multiplied by D).
• f. This will be divided equally by ___pay periods
  (number of checks remaining in the contract
  year).
• g. Your gross pay per pay period will be ___ (E
  divided by F).

Estimate reflects special condition of mid
school year employment.
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Lump Sum Summer Prorated Payment

• If you are a teacher, who has worked from the
  beginning of the school year, and wish to have
  the remainder of your teachers annual salary
  awarded to you in a lump sum, you may request
  this in writing to the Payroll Office by May 15.
• It is important to note here that lump sum
  payments are taxed 28 and above in accordance
  Internal Revenue rules and regulations. In
  addition, fringe benefits are also deducted in a
  lump sum.

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Calculating my net pay.
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Gross Pay

• Gross pay is your total pay before deductions,
  reductions and taxes have been subtracted.

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Net Pay

• Net pay is your take-home pay after reductions,
  taxes and deduction have been subtracted from
  your gross pay.

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Formula for Deductions

• (Gross Pay) ( of deduction) Amount of
  deduction
• Gross Pay Total Amount of Deductions Net Pay

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Required Deductions

• Federal Tax
• Social Security Tax
• Retirement Plan

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Federal Income Tax (Withholdings)

• Federal Income Tax
• Most types of US source income, even when
  received by a foreign person, are subject to US
  tax of twenty one (21) to thirty percent (30)
  depending on the gross salary of the employee.

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Social Security

• Federal Income Tax Withholdings inherently
  include your Social Security Tax. This tax is a
  7.65 of your yearly gross income.
• This contribution is mandatory through the
  Federal Insurance Contribution Act (FICA) and
  it is therefore irretrievable upon leaving the
  United States Employment System.

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Deduction Sample

• (Gross Income) x ()
  Deduction
• (Social Security) 32,841.00 x .0765
  2,512.34
• (Internal Revenue) 32,841.00 x .1335 4,328.27
• 
  _________
• Total Tax payment
  6,840.61

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Retirement Plan (Withholdings)

• 8 of Gross Salary deductions are automatic for
  anyone under the age of 55 coming into the USVI
  Government Employment System to the VI Retirement
  System.

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Retirement Deduction Sample

• (Gross Income) x ( Retirement)
• 32,841.00 x .08
• 2,627.28

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Retirement Plan (Withholdings)

• If at any time the employee resigns the USVI
  Government Employee System, they may retire their
  investment with an increase of 4 on their total
  investment.
• Example Total Investment x 4 increase
• 2,627.28 x .04 105.09
• Total Retrieved upon resignation 2,732.37

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Taxes and Retirement Withholdings
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Medical Insurance Withholding

• Medical insurance withholding will vary according
  to the employees need for coverage, dependents
  and choice of coverage options.
• All beneficiaries must be added during the open
  enrollment period, or within thirty days of birth
  or marriage.
• In all other cases changes will have to wait
  until the following registration period during
  the month of August.

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Authorized Deductions

• Charitable Contributions
• Payments to Fiscal Institutions
• Air Ambulance Service
• AFT dues (Dues paid to the Federation of
  Teachers)

Italicized represent common choices of
authorized deductions.
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Authorized Deductions

• Per Year
• Air Ambulance (estimate) 117.96
• AFT Dues 292.50
• Total Authorized Deductions 410.46

The above represent common choices of authorized
deductions.
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All Values are estimated.
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Estimated Net Pay with Authorized Deductions
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Government Investment per Employee

• The Government of the USVI must pay the following
  for each employee
• Annual Salary
• Social Security Payment
• FUTA (Federal Unemployment Tax)
• SUTA (State Unemployment Tax)
• Retirement Investment
• Medical Insurance

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Government Investment per Employee

• Government as the Employer must pay
• 7.65 of Gross payment in FICA (Social Security
  Tax)
• 6.2 of Federal Unemployment Tax (until the
  employee has collected 7,000)
• 5.4 of State Unemployment Tax (until the
  employee has collected 7,000)
• 14.5 of Gross payment as Retirement Investment
• 65 of the Total Yearly payment of Medical
  Coverage Chosen by employee

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Formulas for Estimated Total Government
Investment

• Gross Payment x .0765 FICA (Social Security)
• Gross Payment x .145 Retirement
• 7,000 x .062 FUTA (Federal Unemployment Tax)
• 7,000 x .054 SUTA (State Unemployment Tax)
• 65 of Medical Coverage selected by Employee

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Estimated Government Investment per Gross Pay
Paid while employee has made less than 7,000
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Questions?
Please contact USVI Department of Education,
Division of Human Resources teachusvi_at_doe.vi 340
-773-1095 340-774-0100
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Welcome to the United States Virgin Islands
Department of Education!
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Your contribution to our community will be long
lasting..
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The End

• Have a GREAT DAY!!!