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The Extended Pay Plan
The enrollment period begins in mid August. Participation in the Plan, which is voluntary, allows employees who are budgeted for less than twelve months each year to extend their net salary payments over twelve months. The information below outlines the procedures for enrolling in the Extended Pay Plan.
Enrollment in Extended Pay Plan by Eligible Employees requires the completion of an Extended Pay Plan Authorization Form.
What It Is
The Extended Plan allows employees who work less than 12 months a year to extend their pay over 12 months.
How It Works
You can choose to have either
12.5% or
25% of your net pay deducted for a period of nine months. The ending balance of the amount that was deducted for the nine month period, will be divided into three months and disbursed during the summer months. If you work nine months and have 25% withheld from your pay during each of those nine months, your paycheck should be fairly even for 12 months. If you have 12.5% withheld for nine months, your summer pay will be less than your regular pay. The deduction for 12.5% was designed for employees who work 10-½ months and have some summer income.
How Tax and Other Deductions Are Affected
For tax purposes, the employee will continue to be considered a nine or 10-½-month employee. Therefore, Federal income and Social Security taxes will be deducted fully from your pay during the months you work. All of the money held for summer payment will be from your after-tax "take-home" pay or your net pay.
How Insurance Premiums Are Paid
Insurance premiums will be deducted from each paycheck during the regular work year. In addition, 25% of your monthly out-of-pocket insurance premiums will be withheld each month to cover your summer premiums. If you participate in the Extended Pay Plan, all summer premiums will be deducted from your May paycheck. However, money to cover three months of premiums will be paid to you in May from your withholdings in addition to your May paycheck. This means your overall May take-home pay will be your normal amount, and all of your Health and Dental premiums can be paid on a pre-tax basis.
How You Sign Up
You can sign up for the plan at any time during the year by completing the Extended Pay Plan Authorization Form which can be downloaded from this site or coming by the Payroll Office. You may also contact this office by calling 845-2711 and requesting a form be sent to you.
If you wish to create generally even paychecks year-round, you will need to sign up in September. If you sign up later in the year, you will still receive three summer paychecks but they will be for lessor amounts. You may also stop participating at any time during the year. However, once you stop participation in the Extended Pay program, you cannot sign up again until the beginning of the next fiscal year (September 1). If you end participating, you may receive all withheld funds at that time or wait and receive these funds in three payments during the summer.
How Your Account Is Paid
Whatever amount has been withheld for summer payment will be divided evenly and paid to you on the regular paydays for June, July and August. This money will already have been taxed, and insurance premiums will already have been deducted. If you work part or all of the summer, you will receive your pay for that work in addition to the payments from the Extended Pay Pan.
