One Time Merit Pay

1
One Time Merit Pay

• By Payroll Office
• Javier Martinez, Director

2
One Time Merit Pay

• Classification of Pay
• Drives payment treatment
• IRS Supplementary Pay
• Supplementary vs Regular Payments
• IRS Publication 15
• FLSA Non-discretionary Bonus

3
One Time Merit Pay - Taxation

• Social Security Medicare Taxes apply - 7.65
• Considered Retirement Compensation and subject to
  Contributions
• 6.4 TRS or 6.65 ORP
• HB 1545 (2001), SAO and TRS
• Supplemental Income Tax Rate 25
• Withholding Tax
• Total Taxes 39.3 ORP, 39.05 TRS

4
One Time Merit Pay - Overtime

• FLSA Payment Classification
• Non-discretionary Bonus
• Retroactive Overtime Re-calculation Required
• Re-calculation period related to review period
• February 1 2009 through January 31 2010
• Requires no involvement from departments
  Payroll will
• Identify all Overtime Payments
• Re-calculate Overtime
• Process OV5 document
• Advise affected employees
• Target Payout Date January 21, 2011
• Budget will allocate funds to cover 14- account
  additional payments

5
One Time Merit Payment

• Questions?