Human Resources Manual

Policy No.: 3-8 This policy applies to:
Policy Name: Pay Deductions/FICA Guidelines Non-exempt staff
Effective Date: 08/01/04   Exempt staff
Revised: 09/30/2013 Faculty

Policy

The law requires that Loyola University New Orleans make certain deductions from every employee’s compensation.  Among these are applicable Federal and state income taxes, Social Security and Medicare taxes. 

Loyola University New Orleans offers programs and benefits beyond those required by law.  Eligible employees may voluntarily authorize deductions from their paychecks to cover the costs of participation in these various benefit programs.

Procedure

Employers and employees both pay taxes required by the Federal Insurance Contributions Act (FICA) to fund two Federal government benefit programs: Social Security and Medicare.  Social Security is comprised of Old Age and Survivor’s Insurance (OASI) and Disability Insurance (DI) while Medicare benefits are provided by the Health Insurance (HI) program.  The employee share of Social Security and Medicare taxes is withheld from wages and matched by the employer, who then pays both shares to the Federal government, unless the employee or student provides certain VISA documentation indicating eligibility for FICA exemption.

Certain groups of Loyola employees are exempt from paying FICA as distinguished below:
• Undergraduate and Graduate Students—Enrolled full-time at Loyola during any semester (fall, spring, or summer)—exempt and do not pay FICA taxes.  If enrolled part time or not enrolled at Loyola, the student is not exempt and must pay FICA taxes
• Regular employees are not exempt
• Foreign nationals are determined by Foreign National Tax Specialist or Tax Treaty
• Members of recognized religious orders are exempt

Employees not exempt from FICA contribute 6.2% of their taxable gross income towards OASDI and 1.45% towards Medicare.  OASDI is taken on income up to a maximum determined each year by the IRS while Medicare does not have an income maximum.  For example, the maximum OASDI income for 2013 is $113,700.  Those employees who have earnings above $200,000 will have an additional .9% Medicare taxes withheld in accordance with IRS guidelines.

Social Security (OASDI) is shown as “FICA” and Medicare (HI) is shown as “Medicare” on the employee’s paycheck available via EWS.  The additional .9% Medicare tax is shown as “MCARE/HIGH.”

If you have any questions concerning why deductions were made from your paycheck or how they were calculated, contact a payroll or benefits representative in Human Resources.