Depending upon employment status, an employee may see four types of tax as payroll deduction:
- Federal Income Tax
- State Income Tax
- OASDI (Old Age, Survivors, and Disability Insurance) Tax
- Medicare Tax
Note that OASDI and Medicare taxes are often identified as "FICA" or "Social Security tax." UCI employees may notice annual changes in Federal and State income tax withholdings to comply with tax laws. In addition, withholdings vary depending upon the number of exemptions claimed, marital status, and participation in employee benefit plans (UCRP tax-deferred, Depcare, etc.).
Other Types of Deductions
Employees will also see non-tax deductions on their earnings statements. These deductions may be related to things like retirement, health coverage, and parking.
The University of California Retirement Plan (UCRP) and the DCP (Defined Contribution Plan) are not taxes. These are mandatory contributions to retirement programs.
Deductions from Pay
Federal Income Tax
Your federal taxes are calculated from tables published by Internal Revenue Service. This calculation is in part based on information from employee's W-4 form, for example:
- marital status
- number of exemptions claimed for dependents
- allowable itemized deductions
- If an employee anticipates they will not earn enough by the taxable year-end to be included in the minimum tax bracket, the employee may claim 'exemption' from withholding so no income taxes will be withheld from earnings.
State Income Tax
State taxes are calculated from tables published by the State Franchise Tax Board. Some University employees that perform services in other states are exempt from California income tax, but subject to state withholding tax for the state in which they work.
OASDI stands for Old Age, Survivor and Disability Insurance, and is more commonly referred to as Social Security. This tax is withheld only from employees in 'career' status, that is:
- the employee must be participating in the UC Retirement Plan, accruing service credit.
- the OASDI tax rate is 6.2% of the first $118,500 (in 2016) of earnings.
- Nonresident alien employees in 'career' status, who hold an F-1 or J-1 visa, are exempt.
Medicare tax is withheld from almost every employee's pay.
- Tax rate of 1.45% of all earnings
- An additional 0.9% in Medicare withholding taxes are deducted on gross earnings over $200,000.
- No annual cutoff earnings threshold
Exempt from Medicare:
- General exemption assigned to employed students enrolled in at least 6 academic units per quarter.
- Nonresident alien employees holding an F-1 or J-1 visa
Defined Contribution Plan (DCP)
DCP is withheld from employees who are participating in the Safe Harbor plan. DCP rates are as follows:
- DCP at 3% rate is deducted from nonresident alien employees in 'career' status holding an F-1 or J-1 visa.
- DCP at 7.5% rate is deducted from employees in 'limited' status, generally defined as part-time (non-career status) employees. However, 'limited' status non-resident alien employees who hold a F-1 or J-1 visa are exempt from this deduction.
Exempt are employed students enrolled in at least 6 academic units per quarter.
University of California Retirement Plan (UCRP)
UCRP contributions withheld from employees participating in the retirement plan are as follows:
- Most active 1976 Tier members make contributions to UCRP equal to 8 percent of covered compensation less $19 per month. Adjustments to member contributions are subject to collective bargaining.
- Most active 2013 Tier members make contributions to UCRP equal to 7 percent of covered compensation. Adjustments to member contributions are subject to collective bargaining.