In January 2018, The Extended Pay Plan will be replaced by a new program called “Save for Summer”. FAQs on this page will be updated as new information is provided. Employees currently enrolled in the Extended Pay Plan will receive a letter about the change.
Save for Summer Highlights (beginning 01/02/2018)
- Withhold flat, dollar amount of net pay
- Enroll using a paper form
- Withdraw at any time, receive held back pay in the next paycheck
The Extended Pay Plan allows employees who work less than 12 months a year to extend their pay over 12 months.
General Information for Extended Pay Plan
- Annual Enrollment for the Extended Pay Plan
The enrollment period begins in mid August. Participation in the Plan, which is voluntary, allows employees who are budgeted for less than twelve months each year to extend their net salary payments over twelve months. The information below outlines the procedures for enrolling in the Extended Pay Plan.
Enrollment in Extended Pay Plan by Eligible Employees requires the completion of an Extended Pay Plan Authorization Form.
- How It Works
Today with the Extended Pay Plan, a percentage of your net pay is held back and paid to you on the July, August and September paychecks. Beginning January 2018 with the Save for Summer program, a flat dollar amount will be held back that equals the percentage amount held back today. The dollar amount held back remains the same until you contact your Payroll Office at email@example.com to change it.
- If you receive a pay increase after January 2, 2018 your flat dollar amount will not be adjusted automatically. You might want to increase the amount held back to reflect the change in your base pay.
- You can change the amount held back at any time by contacting your Payroll Office at firstname.lastname@example.org
- Will my entire pay be affected by the 12.5% or 25% reduction?
Only net pay will be affected. Any supplemental payments you received will not be spread over 12 months.
- How are taxes and other deductions affected?
- For tax purposes, the employee will continue to be considered a nine or 10-½-month employee. Therefore, Federal income and Social Security taxes will be deducted fully from your pay during the months you work. All of the money held for summer payment will be from your after-tax "take-home" pay or your net pay.
- How are insurance premiums paid?
Today with the Extended Pay Plan, a percentage of your insurance premiums are held back and returned to you in May when the June, July and August insurance premiums are paid. Beginning January 2018 when we begin using Save for Summer, a flat dollar amount will be held back that equals the percentage amount held back today. The dollar amount held back remains the same until you contact your Payroll Office at email@example.com to change it.
- If you need to change your benefit elections between January 1 and April 1, contact your Payroll Office (firstname.lastname@example.org) and ask them if you need to change the amount held back to reflect the change in your insurance premiums.
- You can change the amount held back at any time by contacting your Payroll Office (email@example.com).
- Beginning September 2018, insurance premiums will be paid during nine working months and deducted from your October – June paychecks, whether you work 9, 9½, 10,10½, or 11 months.
- Save for Summer will no longer hold back a portion of insurance premiums and you will no longer pay for summer insurance in May.
- How do I enroll, drop, or make changes to my participation?
You can sign up for the plan at any time during the year by completing the Extended Pay Plan Authorization Form which can be downloaded from this site or coming by the Payroll Office.
If you wish to create generally even paychecks year-round, you will need to sign up in September. If you sign up later in the year, you will still receive three summer paychecks but they will be for lesser amounts. You may also stop participating at any time during the year. However, once you stop participation in the Extended Pay program, you cannot sign up again until the beginning of the next fiscal year (September 1). If you end participating, you may receive all withheld funds at that time or wait and receive these funds in three payments during the summer.
- If I join the plan mid-year, can I have a larger percentage withheld?
- No. If you join the plan mid-year, you will have smaller paychecks during the summer months than you would have had if you had joined the plan in September.
- If I don’t need payments from the Extended Pay Plan because I got a summer appointment, can I leave the money in the plan until next summer?
- No. All funds will be given to you so that no funds are held at the end of the fiscal year.
- Will I receive interest on my withholdings for the summer?
- No. If you wish to earn interest on your pay, you should continue your current pay schedule and set aside money yourself for the summer months in an interest-bearing account or investment.
- When I file my income tax return, in which year do I include the money withheld for the Extended Pay Plan?
- You will include the money withheld on your tax return for the year in which it would have been paid had it not been withheld for the Extended Pay Plan. All of your pay will be taxed before any of it goes into the Extended Pay Plan, and your W-2 form will reflect your pay as if you had already received your full amount. You have access to withheld money, and it is considered as already paid to you for tax purposes.
- How is my account paid?
- Whatever amount has been withheld for summer payment will be divided evenly and paid to you on the regular paydays for June, July and August. This money will already have been taxed, and insurance premiums will already have been deducted. If you work part or all of the summer, you will receive your pay for that work in addition to the payments from the Extended Pay Plan.
- How will my direct deposit be affected?
- Direct Deposit will not be affected, except that less money will be deposited each month because a portion of your pay will be withheld for the summer. Your summer payments from the Extended Pay Plan will be made via direct deposit as long as you have a valid direct deposit authorization form on file. However, if you elect to withdraw your money before May, you will receive a paper check.