Faculty Deferred Pay

1. Faculty Deferred Pay

2. Agenda • New Hires • Salary Changes • Position Changes • Additional Assignments • Terminations • Calculations • Posting • Questions

3. Deferred Pay Deferred Pay is specifically for Faculty who have a 9 or 10 month contract. These faculty members earn their salary over the 9 or 10 month contract period, but are paid over 12 months. New 9 and 10 month faculty begin their assignments in August and are paid over 11 months. 9 Month Faculty Members earn their salaries from August 16th through May 15th. 10 Month Faculty Members earn their salaries from August 1st through May 31st. Faculty salaries will be charged to the appropriate accounts (based on FES) as the money is earned.

4. New Hire – Basic Pay For 9 month deferred, the monthly salary amount should be the annual contracted salary divided by 9. For 10 month divide by 10. So for this example, the annual contracted salary is $90,000. $90,000/9 is $10,000. Enter 10,000 in the amount field. The Annual Salary will be overstated. The True Annual Salary will be calculated for you.

5. New Hire – Contract Element Infotype 0016 (Contract Elements) will be presented at the end of the faculty hire action. Select the correct contract type and save.

6. Salary Changes Salary Changes for deferred pay faculty should occur on the 1st day of the month. Remember that the amount of money that was previously deferred is used to calculate the monthly payment. You cannot just take the new annual contract and divide by 12.

7. Positions Changes Position Changes for deferred pay faculty should be done on the first day of the month. Anytime you have faculty changing contract periods, please watch there payroll results to assure they are being paid correctly. (Note: You should be using transaction ZHR_checkpay to check payroll each pay period.) If an employee transfers from a biweekly position to a deferred pay position, you should contact the compensation office for assistance on the timing of the transfer.

8. Additional Assignments Many Deferred Pay Faculty have additional assignments for supplemental payments (such as Summer Research, Summer Session, etc…), these assignments should be set up for full months whenever possible to avoid problems with calculating deferred pay. When you create these assignments use the first day of the month as the start date, when you end the assignments use the first day of the following month as the end date. The payments on these assignments are set up as recurring payments (IT0014) or additional payments (IT0015). You control the payment amount – there is no proration.

9. Terminations Deferred Pay Faculty who have fulfilled their contract and are not returning to the University, should be terminated on July 1. The balance in all deferral buckets will be paid out during the June payroll process. If termination occurs in the middle of the contract, the amount earned for the month will be prorated and the deferral bucket will be cleared. It is possible that this will result in a claim (especially in the fall). Contact the payroll office for assistance in resolving the claim.

10. Calculations Formula for Calculating Deferred Pay: ((A*B)+C)/D = E A = Monthly Earned Salary B = Months Remaining to Earn C = Deferral Bucket Balance (after last payroll) This information is available on the payroll simulation. (IT0008) D = Months Remaining to be Paid E = Monthly Salary Paid Calculation Spreadsheets are available on the web. http://www.uky.edu/IRIS/HR/

11. Posting Charges will be posted as they are earned. Please use the BW Labor Distribution reports, especially when you are looking at the posting for entire departments. Transaction ZCCWBS is still available, but should be used only when you are looking at a small number of people.

12. Questions Questions