Salary/Payroll Overview – The Total Package
An employee’s compensation is determined by their position and responsibilities along with the amount of related experience and education they’ve obtained. An organization determines what tool best fits their structure. Districts utilize Pay Scales, Pay Grades, and Pay Step Scales to assist in the Compensation Process. These scales can fluctuate from one year to the next to accommodate for a variety of changes including budget, economy, and even a targeted need in experience.
Salaried, or Annualized, employees are compensated based on the number of days included in their assigned work calendar. Transactions that may require a salary calculation includes New Hires, Changes in Position and Pay and Employee Separations. How to proceed with Salary Calculations very much depends on the situation per employee and the action being taken. Salary calculations are necessary to ensure the employees are setup with the appropriate amount of pay for the days they are expected to work. In turn, the correct work calendar is crucial, especially when calculating prorated pay for Mid-Year Hires, Separations and Changes.
Supplemental pay types can be applied in addition to an employee’s standard gross pay. Stipends, Bonuses and Employee Allowances can be used to compensate an employee for various reasons. Stipends are commonly paid for additional responsibilities, to compensate for additional work-days outside of the work calendar, and any additional education or certifications the employee may have obtained. Bonuses are utilized to reward the employee for continued longevity with the organization, for meeting performance goals, and employee incentive pay. Allowances are mostly used to reimburse an employee for the use of personal items being used for everyday work expectations.
Teacher Retirement System of Texas (TRS)
TRS is a defined benefit plan that all eligible employees are automatically enrolled into when employed by an ISD or charter school. To be eligible for membership in TRS an employee must meet three (3) requirements: Employment must be regularly scheduled, employed for one-half time or more and salary must be comparable to pay earned by other employees in similar position types. TRS required reports include Employee Data, Regular Payroll Data and Employment of Retired Employees Data. Resources and guides can be found on the TRS website with additional details on eligibility, reporting criteria and compliance.
There are two methods to report wages to the IRS. Even if you have only one employee, you must comply with federal quarterly employment tax reporting and deposit requirements. Two required methods include 941 Quarterly Wage Reports and W-2/W-3 Annual Wage Reports. Totals reported in either case should include all Standard Payrolls, Additional Pay Runs, Adjustments and Voids that have been processed within the quarter. Reconciliations are vital to ensure all necessary transactions for the year have been recorded within the Payroll System. Additionally, accurate and timely tax payments are important to align with all wages and tax liabilities reported to IRS and Social Security Administration. Each required report includes detailed instructions and deadlines that can be found on the IRS website.