Tax Compliance Guidelines
Payroll Tax Compliance

Activity: Payroll Tax Compliance
Financial Policy: Payroll Compliance, FIN-PAY-001
Related Policies:
Additional Forms:
Things to Know:
  • Payroll tax is the largest tax expense of the University. Income taxes and the employees’ share of FICA (Social Security and Medicare) are withheld from income; the employer’s share of FICA will have been accounted for when budgeting for salaries.
  • However, the provision on non-cash fringes (i.e. free athletic tickets, personal use of University vehicles, employees’ gifts, and taxable tuition benefit) not otherwise budgeted will also result in additional FICA expense.
    • Non-cash fringe benefits will be added to employees’ earnings and will be subject to all applicable tax withholding
  • Social Security and Medicare tax exemptions:
    • Students are exempt if they meet the test set out in policy FIN-PAY-230 listed above.
    • Nonresident aliens on an F-1, J-1, M-1 or Q-1 are exempt if performing services consistent with their visa status.
  • Federal Tax Withholding Calculation
  • Contract Pay Calculation
  • Indiana Local (County) Withholding Rates
  • Form W-2 Useful Information

Please consult FMS - Paycheck Taxes  for more useful tax information.

View Payroll Tax for further information.

You may contact University Tax Services, taxpayer@iu.edufor more information.