55.56_Cash_Awards_to_WSU

Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL

PAYROLL
55.56
Revised 7-12
Payroll Services
335-9575

Cash Awards to WSU Employees

TEMPORARY RESTRICTIONS

Effective February 15, 2010 through June 30, 2013, the state government and the central administration are temporarily prohibiting monetary awards to state employees, in accordance with RCW 41.06.070. (See below for exceptions.) The term monetary includes cash as well as cash equivalents, such as gift certificates and gift cards.

Monetary awards are allowed only for:

State employee suggestion awards administered by the state Productivity Board and incentive awards by the Washington Wellness Works program administered by the Washington Health Care Authority; and

Monetary awards to University employees if paid for from donated funds, i.e., 17A accounts. (Effective May 2, 2012)

OVERVIEW

Employing departments giving cash awards to employees in recognition of achievements related to employment are to process the awards through Payroll Services.

Students

Departments process cash awards to students as departmental scholarships. See 30.90.

Supporting Account

Expenditures from a 17A account to support expenditures for employee awards must be allowable in accordance with section 70.33.

PROCEDURE

The employing department sends a memorandum including the following information to the Director, Payroll Services.

Name of recipient,

Social security number of recipient,

Whether the money is to be included in the employee's pay or issued as a separate check,

Whether or not the award is to be confidential until issued,

Supporting account code,

Gross amount to be awarded (see below under Deductions),

Short description of the award,

If the award is a separate check, indicate when the check is required and who will pick up the check,

Signature of the responsible dean or equivalent administrator.

Route the memorandum to Payroll Services at least two weeks before the award is to be given to the employee.

Deductions

Payroll Services deducts the following from all payments:

Withholding tax (typically the 28% supplemental rate)

Social Security (6.2% of gross)

Medicare (1.45% of gross)

Payroll Services can calculate the award one of two ways, gross to net or gross up. Either way, Payroll Services makes appropriate deductions and remits and reports them to the federal government.

Gross to Net

EXAMPLE: Using the gross-to-net method, Payroll Services would generate a payment to the employee of $643.50 from a gross of $1000.

Gross Up

If the department wants the employee to actually receive a set amount with taxes and withholding prepaid, Payroll Services would calculate the necessary gross using the gross-up method. EXAMPLE: To generate a check to the employee of $1000, the department would have to actually pay $1672, i.e., $1554 gross and $118 in contributions.

Supporting Documentation

The department is responsible for retaining supporting documentation that provides justification for the award and describes the selection process.

Washington State University BUSINESS POLICIES AND PROCEDURES MANUAL

Cash Awards to WSU Employees

Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL