Benefits changes, tax increases hot topics in summer
As summer approaches, it’s a good time to remind employees about potential summer benefits and tax changes.
Employees on 9-pay-9 contracts (September through May) will be billed for summer benefits, even though they’re not being paid. In some cases, these employees may have their benefits payments deducted from their paychecks upon returning to work in September.
Employees on leave for more than 90 days also must continue to pay their benefits premiums.
Faculty members may see an increase in the amount of taxes withheld from their paychecks if they’re bumped into a higher tax bracket due to the following circumstances:
- A faculty member is paid on 9-pay-12 contract and receives additional salary payments during the summer.
- A faculty member retirees or is terminated and, as a result, receives a large, lump-sum payment.
To offset the impact of these scenarios, employees can adjust their W-4 forms for May (by May 13) and/or June (by June 11).
So what can you do?
Ensure benefits aren’t unduly charged to former CU employees by processing these terminations as soon as possible.
If you have any faculty members paid on 9-pay-12 contracts who are leaving the university, check to see if they require a payout of accrued earnings not paid (ENP) in May. Paying these employees quickly will ensure they’re not charged for benefits this summer.