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Subject: PaySR Paycheck and Paycheck Calculations Bulletin No. 31
Date: 7/20/98

Purpose

This Bulletin provides samples and detailed descriptions of the new PaySR paycheck, stub and direct deposit advice, and explains the way PaySR calculates various components of employee compensation. This bulletin is being sent to all Payroll Officers, Agency Liaisons and Coaches for Conversion Groups 1 and 2.

All employees in Conversion Group 1 received a handout about the new paycheck on July 8, 1998. An additional handout will be provided with the first PaySR check dated July 22, 1998. Employees in Conversion Groups 2 and 3 will receive similar handouts at a later date.

PaySR Paycheck, Stub and Direct Deposit Advice

The PaySR paycheck, stub and direct deposit advice are informative, easy to read, and folded and sealed for privacy.

The new "Z-fold" design of the PaySR paycheck and direct deposit advice will provide privacy for employees, but will also require care when opening to avoid damaging the check or direct deposit information. Opening instructions are included on the back side of the paycheck and advice and have been included on the employee handouts for July 8 and July 22. However, employees should be reminded of the need to take extra caution when opening the new checks/advices.

The handout to be distributed with the first PaySR paycheck on July 22 provides a sample of the new paycheck and direct deposit advice, and detailed descriptions of most of the fields on the PaySR paycheck and direct deposit stub. The stub items that are not described on the payroll handout are self-explanatory (e.g., Advice #, Advice Date, etc.).

The following is additional information about the paycheck and direct deposit stub:

Year-to-Date (YTD) Totals - In most cases, the YTD totals on the PaySR stub will include amounts paid prior to the check dated July 22, 1998. In some cases, however, PaySR will record only earnings and deductions beginning with the check dated July 22, 1998, as the YTD amount. These latter cases include "YTD Total Gross Earnings," (found in the heading section of the stub); certain categories of earnings (see below for additional details); and, "After Tax Deductions." The pre-PaySR amounts for these categories are not available and, therefore, will not be carried on the PaySR stub.

Beginning in 1999, all items on the PaySR stub will carry YTD totals that reflect earnings and deductions from the beginning of the calendar year.

Net Pay - In the example included on the payroll insert, the amount in the "Net Pay" box on the stub ($1,094.10) does not equal the amount of the check received by the employee ($994.10). The difference is due to the fact that the employee also has a direct deposit of $100.00. The "Net Pay" amount, in cases such as the one in the example, is equal to the total of the check received and the direct deposit amounts. The difference between the "Net Pay" and check amounts may cause some confusion among employees.

Converted Overtime Earnings - this category, which will only be used in 1998, summarizes all overtime earnings paid through the check dated July 8, 1998.

"Other" Earnings - Due to space limitations, the PaySR stub can only accommodate up to 13 separate earnings categories (i.e., rows of earnings data). In cases where an employee has more than 13 categories of earnings, the 14th and subsequent earnings categories will be combined with the 13th category and labeled "Other" on the stub. All earnings will continue to be separately identified and aggregated in the PaySR system. The "Other" category is only being used for printing/display purposes on the new stub.

Credit union deductions — Most credit union deductions will be treated as direct deposits (See Attachment A for exceptions) in PaySR. Accordingly, employees who now have a credit union deduction and receive a paycheck may receive two separate documents on pay day -- a paycheck and a direct deposit advice. If the employee has a credit union deduction and direct deposits the remainder of his/her check, the employee will receive one direct deposit advice showing a separate deposit to the credit union.

 

Paycheck Calculations in PaySR

Certain paycheck calculations in PaySR will differ from those in the legacy system and may result in slight variations in the amount of gross and/or net pay received by employees. The two most common calculation differences in PaySR result from rounding and the use of annualized tax withholding tables.

Rounding to the Nearest Cent

The most common difference between PaySR and the current (legacy) payroll system is that PaySR rounds most earnings and deduction calculations to the nearest cent. In the current system, many payroll calculations are truncated, or cut off, at two decimal places.

Rounding will affect many categories of earnings, including regular pay, additional salary factors and overtime. It will also affect all deductions based on a percentage of salary, such as UUP and PEF dues, and deferred compensation contributions. Retirement contributions, except for TIAA/CREF, are rounded in the legacy system. In PaySR, all retirement contributions will be rounded, including TIAA/CREF.

Rounding in PaySR may cause both earnings and deductions calculations to be one cent higher than they are in the current system. The impact of rounding on an employee’s net pay will depend upon the number of rounded earnings and deduction calculations for that employee. An example of the potential impact of rounding on gross salary is presented below. A more detailed example of the impact of rounding on a sample paycheck is included in the July 22 handout.

In the current system, if an employee’s biweekly gross salary is calculated at $1,312.3888, the last two decimal places would be dropped off, for a biweekly gross salary of $1,312.38. In PaySR, that same amount would be "rounded" to the nearest penny, for a biweekly gross salary of $1,312.39. Alternatively, a biweekly gross salary of $2,107.5634 in PaySR would be $2,107.56.

The effects of rounding will vary depending upon the category of earnings or deductions. For example, annual amounts that are paid out on a biweekly basis (e.g., regular annual salary, location pay, etc.), will be rounded on a biweekly basis. Other categories will be rounded on a "per unit" basis, consistent with how they are calculated. For example, overtime is calculated on an hourly basis; therefore, each hour, or unit, of overtime earnings will be rounded.

Tax Withholding Calculations

The second most common paycheck calculation difference in PaySR results from the use of different tax withholding tables. In the legacy system, tax withholdings are determined using biweekly tax tables. PaySR uses annualized tax tables. A copy of annualized tax tables may be obtained from your local IRS office (ask for Circular E).

The use of annualized tax tables could change an employee’s tax withholdings by a few cents per pay period. See the July 22 handout for an example of the impact of annualized tax tables on an employee’s tax withholdings.

Social Security/Medicare Withholdings: Withholdings for Social Security and Medicare may be affected by a one-time adjustment in the first PaySR check due to the use of a different withholding methodology in PaySR. In the legacy system, Social Security and Medicare withholdings were based upon biweekly earnings. In the PaySR system, Social Security and Medicare withholdings are based on cumulative earnings and previously withheld amounts.

In the first PaySR check, the system will calculate Social Security and Medicare withholding amounts based upon the employee’s cumulative earnings and will compare that amount with the amount previously withheld for Social Security and Medicare. This comparison may result in a one-time adjustment of a few cents in the first PaySR check to "catch-up" with the amount that would have been withheld had the PaySR withholding methodology been in use since the beginning of the calendar year.

Following this one-time adjustment, subsequent Social Security and Medicare withholdings may fluctuate by one cent on a periodic basis as the amounts withheld are constantly adjusted to reflect the employee’s cumulative earnings and withheld amounts.

Garnishments

Differences in the determination of garnishments in PaySR could result in significant paycheck differences for some affected employees. These differences are summarized in Attachment B (Items 10-14).

The Office of the State Comptroller processes all garnishments independently. Accordingly, in cases where significant paycheck differences will occur, OSC will contact garnishees directly to explain the differences. Questions on the treatment of garnishments in PaySR should be directed to the Garnishments Unit at 473-1240.

Attachment B provides additional information on the calculation differences between the current and PaySR systems. In addition to a brief description and explanation of the differences, the matrix identifies the potential impact of each change on an individual employee’s compensation.

Attachment C provides frequently asked questions and answers to assist you in responding to employees.

Questions?

The bulletin is intended to assist you in answering employee questions about the new PaySR paychecks, stubs and direct deposit advices, and the calculation differences between the legacy and PaySR systems. If employees have questions that you are unable to answer, please call the PaySR Help Desk at 486-6745.

To ensure that the Help Desk remains available to answer your questions on a timely basis, please do not direct employees to call the PaySR Help Desk directly nor give them the Help Desk phone number. Individual employee calls would tie up the Help Desk phone lines and make it more difficult to respond to your calls in a timely fashion. Thank you for your assistance in keeping the PaySR Help Desk lines open.

List of Attachments:

A - List of credit unions not converted to direct deposit

B - Summary of Paycheck Differences between Current System and PaySR

C - Frequently Asked Questions about PaySR

Questions on this Bulletin?

        If you have questions about this bulletin, call the Help Desk at (518) 486-6745.


ATTACHMENT A

 

CREDIT UNIONS NOT CONVERTED TO DIRECT DEPOSIT


135 M.C.T. Federal Credit Union

137 Niagara Falls Police FCU

147 City of Schenectady Employees FCU

152 Uncle Sam FCU

702 Attica-Wyoming Correctional Facility FCU

716 Great Meadow FCU

738 Sing Sing Employees FCU

740 State Cvil Service Employees FCU

755 Morton R. Lane SU FCU

768 S.C.U.O. FCU

773 SUNY Fredonia FCU


ATTACHMENT C

 

Frequently Asked Questions about PaySR

 

Question:

Will I continue to receive my paycheck on the same day from the new payroll system?

Proposed Response:

Yes. The pay cycles and pay dates in PaySR have not changed.

 

Question:

Will my funds be deposited in my bank on the same day in PaySR?

Proposed Response:

Yes. Your funds will be deposited in your bank or financial institution on the same day in PaySR.


Question:

What should I do if I accidentally tear my new check or direct deposit advice when opening it?

Proposed Response:

You should report any damaged, lost or stolen checks to your agency payroll office. That office will assist you in replacing any such checks.


Question:

I noticed a mailing address on the front of the new check/direct deposit advice. Can I have my checked mailed to my home?

Proposed Response:

Decisions regarding how paychecks are distributed to employees are made by your agency.


Question:

The amount in the "Net Pay" section of the pay stub is not the same as the amount of the check I received. Why?

Proposed Response:

The "Net Pay" amount on the stub includes the combined amount of checks received and direct deposits made. So, it the "Net Pay amount does not equal the amount of the check you received, you must have a direct deposit that accounts for the difference.


Question:

What happened to my credit union deduction? I don’t see it on my pay stub?

Proposed Response:

In PaySR, most credit union deductions will be handled as direct deposits. These deposits will be recorded on your direct deposit advice, not on your stub. This change will not impact the amount or the timing of your deduction; it is simply a different way of transmitting your funds to the credit union.


Question:

Why did I receive two documents on payday? I used to receive only one?

Proposed Response:

In the previous payroll system, your credit union deduction was treated as a deduction like any other and was recorded on your pay stub. In PaySR, your credit union deduction will be treated as a direct deposit and will be recorded on a separate document known as a direct deposit advice. That’s why you received two documents — a paycheck for part of your net pay; and a direct deposit advice that identifies your credit union deposit.


Question:

What is a "direct deposit advice?"

Proposed Response:

A direct deposit advice is a document that summarizes all direct deposits to financial institutions. Employees who deposit their entire net check will receive only one document on payday -- a direct deposit advice. Employees who deposit only a part of their net check will receive two documents on payday -- a paycheck and a direct deposit advice.


Question:

Why has the amount of my paycheck changed?

Proposed Response:

PaySR calculates some things differently than the previous payroll system. For example, PaySR rounds many earnings and deduction calculations to the nearest penny. The previous system did not round many calculations. In addition, PaySR uses annualized tax tables to determine withholding amounts. Both of these differences could impact your net pay by a few cents per pay period.


Question:

If I have a question, should I call the PaySR Help Desk?

Proposed Response:

No, please direct all of your questions to your agency payroll office. If we are unable to answer your question, we will contact the PaySR Help Desk for assistance.


Question:

Why have my Medicare and Social Security withholdings increased in my first PaySR check?

Proposed Response:

PaySR determines Social Security and Medicare withholdings based on your cumulative earnings. The previous system based your withholdings on your biweekly earnings. The additional withholding in your first PaySR check is a one-time adjustment to reflect the different calculation used by PaySR.


Question:

Why are some of the "YTD" amounts on my stub the same as my "Current" amounts?

Proposed Response:

In some cases, year-to-date (YTD) totals were not recorded in the previous payroll system and are not available to be carried over into the new system. So, for 1998, some items will carry YTD amounts that are identical to current amounts and that reflect payments made on or after July 22, 1998. In 1999, all items on the stub will carry YTD amounts that reflect calendar year totals.


Question:

How do I open my PaySR check or direct deposit advice?

Proposed Response:

The PaySR paycheck and direct deposit advice are folded and sealed on three sides. They should be opened carefully to avoid damaging the check or direct deposit information. Opening instructions are included on the back side of the check and direct deposit advice. Fold, crease and tear along the perforations. Then, remove the two side edges, followed by the top edge.


Question:

What is included in the category of earnings called "Converted Overtime?"

Proposed Response:

"Converted Overtime" earnings is a category that will only be used in 1998 to summarize all overtime earnings paid to you up in 1998 up to and including the check dated July 8, 1998.