Biweekly Pay Conversion Information Session

Biweekly Pay Conversion  Information Session Updated: 11/07/12 Workshop Agenda • INTRODUCTION What is UC Path Moving to the Biweekly Pay Cycle • P...
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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?

Updated: 11/07/12

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UC Path

Single Payroll, Benefits, HR and  Academic Personnel solution for  all UC employees systemwide.

Updated: 11/07/12

4

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

Updated: 11/07/12

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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.

Updated: 11/07/12

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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.        

Updated: 11/07/12

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 

7

Biweekly Conversion Timeframe

System‐wide implementation of biweekly pay cycles  for all non‐exempt employees by January 31, 2013

Updated: 11/07/12

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Moving to the  Biweekly Pay Cycle

Updated: 11/07/12

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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

Updated: 11/07/12

10

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 

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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

Updated: 11/07/12

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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

Updated: 11/07/12

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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

Updated: 11/07/12

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Leave Accruals

Updated: 11/07/12

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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.

Updated: 11/07/12

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Understanding  Payroll Deductions

Updated: 11/07/12

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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 

Updated: 11/07/12

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Flat Dollar Amount Deductions Flat Deductions Taken Twice Per Month (24 paychecks)

Insurance

Retirement

Other

Updated: 11/07/12

• • • • •

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

Updated: 11/07/12

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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.

Updated: 11/07/12

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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

Updated: 11/07/12

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Reviewing Deductions by Paycheck

Updated: 11/07/12

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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

Updated: 11/07/12

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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.

Updated: 11/07/12

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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

Updated: 11/07/12

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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

Updated: 11/07/12

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March/April Cash Flow



You will receive two biweekly paychecks in March  



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

Updated: 11/07/12

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Monthly to Biweekly Example

Updated: 11/07/12

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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.

Updated: 11/07/12

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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!

Updated: 11/07/12

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Planning Your Transition

Updated: 11/07/12

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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

Updated: 11/07/12

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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.

Updated: 11/07/12

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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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