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Paycheck Taxes

The following types of taxes below are the most commonly seen taxes applied to paychecks at Indiana University. For specific questions about your paycheck, please contact University Tax Services with your Employee ID number and a description of your question.

Federal Taxes

Indiana University uses an annualized method to calculate Federal taxes on each paycheck based on the Federal Form W-4 received. For most employees, this method shows little to no difference than the other methods as prescribed by the IRS for tax withholding. Please see the Federal Income Tax Withholding Calculation handout which details this calculation and examples below:

For assistance in completing the Federal Form W-4, please see the IRS Withholding Calculator at the link below:

  • IRS Withholding Calculator

Individuals with contract pay however, can end up with little to no taxes withheld based on the annualized method. Those employees on contract pay should consider additional withholding on the Form W-4. Please see the Contract Pay handout for examples below:

State & Local Taxes

State and local taxes can vary by state. The following table identifies the link where the State and Local taxes can be calculated. For more information, please contact the individual state department of revenue in question.

See Living and Working Outside of Indiana.

 

Social Security & Medicare Taxes

Social Security and Medicare (FICA) tax is required to be withheld for all employees who do

not meet the student or non-resident alien exemption for FICA taxes. To be exempt as a student, the individual must enrolled in a certain number of credits. Please see table below for the number of credit hours needed to meet the exemption:

Student

Fall Semester

Credit hours

Spring Semester

Credit hours

Summer Session

Credit hours

Undergraduate

6

6

3

Graduate

4

4

2

The current Social Security and Medicare rates and wage limits are listed in the table below, or see the Social Security Administration link below:

Fica Tax Type Paycheck Description Tax Rate
Medicare Fed MED/EE 1.45%
Social Security Fed OASDI/EE 6.2%
Add'l Medicare Fed AddlMed .9%
  •  OASDI and SSI Program Rates & Limits

Please note there is no wage limit for Medicare taxes and all non-exempt wages will have Medicare taxes applied. Additionally, enacted in 2013, there will be an additional 0.9% Medicare tax withheld from wages paid to an employee in excess of $200,000. For more information, please see the IRS webpage on Additional Medicare tax:

  • IRS Additional Medicare Tax

For specific questions, please contact University Tax Services.


Category: Paycheck

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