December '18 Monthly Pay FAQs
The university planned to move the December monthly payroll from the first business day in January to the last business day of December to simplify employee finances, to increase consistency, and to simplify benefit deduction processing and tax withholdings. In reviewing this decision, however, we found that it may adversely affect some faculty and staff. Therefore, the university decided to leave the pay calendar unchanged.
Please review the frequently asked questions below and contact firstname.lastname@example.org with any additional questions you may have.
The university pays its monthly faculty and staff on the last business day of every month, except December. December salaries are paid on the first business day of January pursuant to a policy implemented in 1981. The policy was implemented to take advantage of certain tax law changes passed at the time. Since then, monthly employees have continued to receive twelve paychecks per calendar year, with two issued in January, and none issued in December.
The university planned to move the December monthly payroll from the first business day in January to the last business day of December to simplify employee finances, to increase consistency, and to simplify benefit deduction processing and tax withholdings.
The planned calendar change would have resulted in monthly faculty and staff receiving an additional payment during the 2018 tax year. This would have made their gross and taxable income for 2018 higher than it would be otherwise, even though they would not be receiving raises. This could result in some employees being adversely impacted in the following areas:
Means-tested benefits. The higher gross and taxable income for 2018 could result in some employees losing eligibility in 2019 for means-tested benefits involving health, housing, nutrition, and education.
Student loan repayment. Employees with income-driven student loan repayment plans could see higher loan payments in 2019 because their repayment amounts would be calculated using their inflated 2018 wages.
Tax liability. Employees could experience lower net pays in 2018 and increased tax bills in 2019 because of their higher 2018 wages.
Based on our review of these issues, we have concluded the benefits of paying December salaries two days earlier do not outweigh the financial cost some of our employees would have to bear to accomplish the pay calendar change. Therefore, we will leave the pay calendar unchanged.
Monthly faculty and staff will receive their December 2018 pay on January 2, 2019.
No. The pay calendar is not changing. You will continue to receive your December monthly pay on the first business day of January.