Payroll tax is the largest tax expense of the University. Income taxes and the employees’ share of FICA (Social Security and Medicare) are withheld from income; the employer’s share of FICA will have been accounted for when budgeting for salaries.
However, the provision on non-cash fringes (i.e. free athletic tickets, personal use of University vehicles, employees’ gifts, and taxable tuition benefit) not otherwise budgeted will also result in additional FICA expense. Non-cash fringe benefits will be added to employees’ earnings and will be subject to all applicable tax withholding.
Social Security and Medicare tax exemptions:
Students are exempt if they meet the test set out in policy FIN-PAY-230 listed above.
Nonresident aliens on an F-1, J-1, M-1 or Q-1 are exempt if performing services consistent with their visa status.
- Federal Tax Withholding Calculation
- Contract Pay Calculation
- Indiana Local (County) Withholding Rates
- Form W-2 Useful Information
Please consult FMS - Paycheck Taxes for more useful tax information.
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