Biweekly Pay Conversion Information Session
Updated: 11/07/12
Workshop Agenda • INTRODUCTION What is UC Path Moving to the Biweekly Pay Cycle
• PAYRATE AND ACCRUALS How to calculate hourly rate Leave accrual information
• DEDUCTIONS Understanding Payroll Deductions Reviewing Deductions by Paycheck
• TRANSITION Transitioning to Biweekly Pay Analyzing Your Cash Flow Planning Your Transition
• NEXT STEPS Preparing for the Biweekly Transition Updated: 11/07/12
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What is UC Path?
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UC Path
Single Payroll, Benefits, HR and Academic Personnel solution for all UC employees systemwide.
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UC Path Goals
Deliver higher quality service with increased efficiency and accuracy Achieve sustainable long‐term cost savings by standardizing and simplifying common business processes and technology infrastructure systemwide Improve UC’s ability to respond to changing business and reporting needs
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When UCPath is Complete There will be a single payroll and HR solution for all employees UC wide. Transactional processes will be centralized at the UCPath Center. Dedicated customer support staff will provide accurate and timely information by phone, email and, eventually, chat. Employees will have access to their job and employee information and be able to make changes via online self service. HR, payroll, and academic personnel transactional processes will be simplified and consistent across all UC locations. Payroll processing will be real‐time, automated, efficient and accurate. Consistent, quality data will be readily available to improve analytical reporting and decision making. UC will deliver payroll and HR services at a substantially lower cost than today.
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Why Move to Biweekly? Part of UC goals for continuous improvement of the quality and efficiency of the University’s business administration.
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Systematic approach to Payroll time reporting Standardize pay practices across UC More efficient and effective time reporting Reduction in manual adjustments Reduction in overpayments Overtime payments will be more timely Vacation and sick leave balances will be current
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Biweekly Conversion Timeframe
System‐wide implementation of biweekly pay cycles for all non‐exempt employees by January 31, 2013
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Moving to the Biweekly Pay Cycle
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Who will be converting to Biweekly? All non‐exempt monthly paid employees will be converted to biweekly pay cycle, paid hourly •
Employees currently paid on a monthly pay cycle who are eligible for overtime, shift, on‐call pay
•
Employees who report time worked, as well as sick, vacation, comp and other leave to nearest quarter hour
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UC Davis Pay Cycles Monthly Pay Cycle
Biweekly Pay Cycle
Pay Cycle
1st to last day of the month
Sunday to Saturday, two‐week period
Paychecks per Year
12
26
Paycheck Date
1st of the month
Every other Wednesday
Pay for Overtime, Shift, On Call, Etc.
Paid one month after earned
Paid in the biweekly check when earned
Employees in Pay Cycle
Employees who ARE NOT eligible for overtime, shift, on call, etc.
Employees who ARE eligible for overtime, shift, on call, etc. and/or work variable hours
Leave Usage
Reported one month in arrears
Reported in the current leave accrual cycle
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Monthly Pay Cycle
• Pay Cycle = 1st to last day of the month • Month 1 regular earnings paid on 1st of Month 2 • Month 1 overtime, shift, etc. paid on 1st of Month 3 • Month 1 leave usage reported on 1st of Month 3 • 12 paychecks per year Updated: 11/07/12
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Biweekly Pay Cycle
• Pay Cycle = Sunday to Saturday, 2 week period • Biweekly Pay is every other Wednesday • Overtime, shift, etc. during pay period is included in each paycheck • Leave usage is reported in current pay period • 26 paychecks per year Updated: 11/07/12
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Pay Rate and Accruals
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Updated: 11/07/12
What is my hourly pay rate? • Take your monthly rate times 12 which equals your annual rate. $3,333 x 12=$39,996 • Take your annual rate divided by 2088 to determine your hourly rate. $39,996/2088=$19.16
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Vacation & Sick Leave Accruals • No change in the accrual rates • The biweekly leave accrual period is four (4) weeks. For full time employees, this means that the vacation/sick accruals are based on 160 hours per leave accrual period. • Leave accrual is based on an hourly factor that can be found at: http://www.hr.ucdavis.edu/employee/leave‐time‐ off/Vacation/Codes/?searchterm=vacation%20leave%20acc rual
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Leave Accruals
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Biweekly Calendar This is the annual biweekly calendar. It indicates the biweekly pay periods, pay dates, and leave accrual periods. The end date of each leave accrual period is indicated on the calendar with a blue square. You may use your vacation/sick once it has accrued in the quadra-weekly cycle.
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Understanding Payroll Deductions
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Payroll Deductions
Payroll deductions are taken from paychecks either as: • set amounts (aka Flat Dollar Deductions) or • calculated amounts based on a percentage of earnings
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Flat Dollar Amount Deductions Flat Deductions Taken Twice Per Month (24 paychecks)
Insurance
Retirement
Other
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• • • • •
Health Insurance Life & Dependent Life Accidental Death & Dismemberment Supplemental Disability Health Care/Dependent Care
• 403B or 457B if Flat Deduction* (for example, $100/month)
• • • • •
Legal Insurance California Casualty Scholarshare Loans – Credit Union & 403(b) loans Transit and Parking, etc. 21
Percentage Based Deductions % Deductions Based on Pay (every paycheck) Taxes
• • • •
Federal State OASDI (Social Security) Medicare
• UC Retirement Plan (UCRP)
Retirement
(was Defined Contribution Plan)
• 403B or 457B if % Deduction* (for example, 3% of every check)
Other
• Union Dues / Fair Share • Garnishments %
*Employees elect 403B/457B as percentage (%) amount or flat amount Updated: 11/07/12
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Payroll Deductions • MONTHLY Paychecks
All Deductions taken once a month The net of the paycheck is generally the same every month (not including additional pay like overtime)
• BIWEEKLY Paychecks
24 Pay checks a year ‐ 2 per month Percent based deductions are deducted from every paycheck. Flat dollar deductions are divided and deducted from each biweekly paycheck The net of each of these checks varies slightly due to the affect of the $19 reduction to the retirement deduction 2 pay checks (Benefits Holiday) – the net will differ only percent based deductions are deducted
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Benefits Holiday • There are two times a year when flat dollar deductions are not withheld. Because there are 26 biweekly paydays per year and only 24 are needed each year to cover flat dollar amount deductions, these two biweekly paydays are referred to as a “Benefits Holiday”. • A “Benefits Holiday” occurs when there are three biweekly pay period end dates in a single calendar month (which typically occurs twice each year). In this situation no flat‐rate deductions will be taken from the pay check for this third biweekly pay period.
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Biweekly Calendar‐Benefits Holiday For 2013, the “Benefits Holidays” are April 10th and September 11th. Only the following deductions will be taken: • OASDI • Medicare • Federal and State income tax • % based deductions (i.e. 403b, union dues) These are indicated on the calendar with a bold green square
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Reviewing Deductions by Paycheck
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Sample Employee: Monthly Employee Name: Brian BiWeekly Works 100% Time Monthly ESTIMATE
Monthly Gross Salary:
$3,333.00
Pay Period: Check Date: Gross Pay:
Annual Gross Salary:
$39,996.00
Hourly Pay Rate:
$19.16
Dec-1 to Dec-31 January 2, 2013 $3,333.00
Deductions: HEALTH INS PARKING UCRP MEDICARE OASDI FEDERAL TAX CA STATE SUPPL LIFE AD&D DEP LIF INS ARAG LEGAL SUPPL DIS AGY FEE Net Pay:
Updated: 11/07/12
$ 14.53 $ 40.00 $147.65 $ 47.54 $137.70 $169.02 $ 0.00 $ 8.06 $ 6.00 $ 0.36 $ 13.78 $ 31.95 $ 25.83
(Annual Salary/2088 hours)
$2,690.58
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Monthly Compared to Biweekly Employee Name: Brian BiWeekly Annual rate = $39,996 hourly rate = $19.16 BW Estimate reflects pay for 80 hours* (80 x 19.16 = $1,532.80)
NOTE: Over the course of the year, you will be paid the same gross
Monthly ESTIMATE
Biweekly ESTIMATE
Biweekly ESTIMATE
Pay Period: Check Date: Gross Pay:
Pay Period: Check Date: Gross Pay:
Pay Period: Check Date: Gross Pay:
Jan-1 to Jan-19 February 1, 2013 $2,028.80
Deductions: HEALTH INS PARKING UCRP MEDICARE OASDI FEDERAL TAX CA STATE SUPPL LIFE AD&D DEP LIF INS ARAG LEGAL SUPPL DIS AGY FEE Net Pay:
Updated: 11/07/12
$ $ $ $ $ $ $ $ $ $ $ $ $
14.53 40.00 82.44 28.63 82.20 12.95 0.00 8.06 6.00 0.36 13.78 31.95 15.72
$1,692.18
Jan-20 to Feb-2 February 13, 2013 $1,532.80*
Deductions: HEALTH INS PARKING UCRP MEDICARE OASDI FEDERAL TAX CA STATE SUPPL LIFE AD&D DEP LIF INS ARAG LEGAL SUPPL DIS AGY FEE Net Pay:
$ $ $ $ $ $ $ $ $ $ $ $ $
7.26 20.00 57.64 21.83 63.23 78.42 0.00 4.03 3.00 0.18 6.89 15.97 11.88
$1,242.47
Feb-3 to Feb-16 February 27, 2013 $1,532.80*
Deductions: HEALTH INS PARKING UCRP MEDICARE OASDI FEDERAL TAX CA STATE SUPPL LIFE AD&D DEP LIF INS ARAG LEGAL SUPPL DIS AGY FEE Net Pay:
$ $ $ $ $ $ $ $ $ $ $ $ $
7.27 20.00 76.64 21.83 63.23 75.57 0.00 4.03 3.00 0.18 6.89 15.98 11.88
$1,226.30
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Transitioning to Biweekly Pay
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Final Monthly Paycheck: February 1
Last check received on the monthly pay cycle
February 1st is the last time you will receive pay on a monthly pay cycle. This pay will include will include all “regular” earnings from January 1st through January 19th.
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Biweekly Checks –Jan/Feb Earnings 1st biweekly paycheck • Paid on February 13, 2013 • Includes hours worked from Jan 20 through Feb 2
2nd biweekly paycheck • Paid on February 27, 2013 • Includes hours worked from Feb 3 through Feb 16
3rd biweekly paycheck • Paid on March 13, 2013 • Includes hours worked from Feb 17 through Mar 2 Updated: 11/07/12
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Analyzing Your Cash Flow
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February Cash Flow
•
Since you will receive a full monthly paycheck on January 2nd, there is no change to the money in your pocket to pay your bills due in January.
•
You will receive a partial monthly paycheck on Feb 1st.
•
The February 1st paycheck will reflect payment for Jan 1 – Jan 19
You will receive two biweekly paychecks in February
The February 13th paycheck will reflect payment for Jan 20 – Feb 2 The February 27th paycheck will reflect payment for Feb 3 – Feb 16
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March/April Cash Flow
•
You will receive two biweekly paychecks in March
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The March 13th paycheck will reflect payment for Feb 20 – Mar 2 The March 27th paycheck will reflect payment for Mar 3 – Mar 16
You will receive two biweekly paychecks in April
The **April 10th paycheck will reflect payment for Mar 17 – Mar 30 The April 24th paycheck will reflect payment for Mar 31 – Apr 13
**Benefits Holiday Updated: 11/07/12
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Biweekly Pay Calculator Enter the amounts from Brian BiWeekly’s monthly pay check stub (provided in the handouts) into the BiWeekly Pay Calculator form to calculate Brian’s estimated biweekly net check. 1. Brian’s monthly pay of $3,333.00 2. Hours worked per week 3. Federal and State withholding allowances 4. Eligible for OASDI and/or Medicare 5. Eligible for UCRP, DCP Cas, or None 6. Pre‐tax deductions (reductions) 7. Union Dues/Agency Fees 8. All other misc deductions Updated: 11/07/12
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Biweekly Pay Conversion Calculator
• Available at the UC Davis UCPath website
• Converts your monthly pay to biweekly pay
• Allow for a 5% error rate
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Monthly to Biweekly Example
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Cash Flow Exercise
1. You now know WHEN you will be paid. 2. You now know HOW MUCH you will be paid. 3. Now, let’s analyze Brian BiWeekly’s February cash flow and identify any cash flow concerns.
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Cash Flow Exercise: Sample Employee Brian Biweekly’s
Amount
Due Date
$1,000
1st
Groceries/Living
$100
1st Week
Car Payment
$200
4th
Electricity/Gas
$50
6th
Phone/Cell
$100
8th
Groceries/Living
$100
2nd Week
Credit Card Pmt
$100
11th
1st week expenses equal $1,450. Does not appear to be a cash flow concern.
Cable/Internet
$100
12th
Auto Insurance
$100
12th
2nd week expenses equal $400. Appears to be a cash flow concern.
Groceries/Living
$100
3rd Week
Water/Sewer
$50
22nd
Groceries/Living
$100
4th Week
Miscellaneous
$200
Month End
$1,692.18 $1,450.00 $242.18 $400.00 ($157.82) $1,242.47 $1,084.65 $450.00 $634.65
Feb 1st salary Less 1st week expenses Remaining after 1st week Less 2nd week expenses Short for 2nd week Feb 13th salary Remaining after Feb 13th check Less 3rd week thru end of month
3rd week through month end expenses equal $450. Does not appear to be a cash flow concern.
Bill Mortgage/Rent
TOTAL Updated: 11/07/12
$2,300 39
February Cash Flow Exercise This example shows that by changing the due date of 2 bills, the cash flow concerns are removed Updated: 11/07/12
Bill
Due Date
February 1st check
Amount
Running total
1,692.18
1,692.18
1,000.00
692.18
Mortgage/Rent
1st
Groceries/Living
1st week
100.00
592.18
Car Payment
4th
200.00
392.18
Electricity/Gas
6th
50.00
342.18
Cell Phone
8th
100.00
242.18
2nd week
100.00
142.18
11th
100.00
42.18
1,242.47
1,284.65
Groceries/Living Credit Card Payment February 13th check Cable/Internet
12th to 20th
100.00
1,184.65 Changed due date
Auto Insurance
12th to 20th
100.00
1,084.65 Changed due date
Groceries/Living
3rd week
100.00
984.65
22nd
50.00
934.65
4th week
100.00
834.65
Month End
200.00
634.65
1,226.30
1,860.95
Water/Sewer Groceries/Living Miscellaneous February 27th check
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Cash Flow Summary • Start early and plan ahead:
Calculate your Biweekly Pay Analyze your Cash Flow Identify financial concerns Plan your Transition Reminder! The 2/27 check is not an extra check. The net of this check needs to be a part of your MARCH financial planning!
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Planning Your Transition
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Transition Planning Options Start Planning NOW Contact Lenders, Banks, Landlord, etc. and request to: • Move bill due dates to later in the month or • Pay half in early Feb and half in later Feb Change 403B/457B amounts during the transition period • 403B – effective immediately • 457B – maybe up to 30 day waiting period Consider UC Davis Transition Assistance** • Cash out accrued vacation • Apply for a personal loan **For all represented employees, participation in the UC Davis Biweekly Pay Transition Assistance Program is subject to collective bargaining Updated: 11/07/12
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Preparing for the Biweekly Transition
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Next Steps 1. Use the tools we have provided on the UCPath website
Biweekly Pay Calculator spreadsheet
Biweekly Gross Pay Comparison spreadsheet
2. Analyze your Cash Flow by comparing your Biweekly Paycheck Estimates to your Bill Amounts and Due Dates. 3. Plan for the transition.
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Key Dates to Remember You will receive pay on the following dates: Jan 2nd
Pay for hours worked 12/1/12 – 12/31/12
Feb 1st
Pay for hours worked 1/1/13 – 1/19/13
Feb 13th
Pay for hours worked 1/20/13 – 2/2/13
Feb 27th
Updated: 11/07/12
Pay for hours worked 2/3/13 – 2/16/13
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Useful Links The UCPath Project at UC Davis: http://ucpath.ucdavis.edu/ Biweekly Payroll Conversion: http://ucpath.ucdavis.edu/biweekly/index.html Biweekly Pay Calculator and Biweekly Gross Pay Comparison forms: http://ucpath.ucdavis.edu/biweekly/biweekly_calculate.html Leave Accrual Chart http://www.hr.ucdavis.edu/employee/leave‐time‐ off/Vacation/Codes/?searchterm=vacation%20leave%20accrual Biweekly Payroll Conversion email:
[email protected] Updated: 11/07/12
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Question and Answer Session Updated: 11/07/12
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