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1. At what rate will MPS withhold federal income taxes on the lump sum payments?
Federal income tax will be withheld at a uniform rate of 25%, to comply with IRS regulations.
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2. After all required deductions, what percentage of the lump sum will be take-home pay?
You'll take home about 60% of your payment, based on the following deductions.
25% - federal income tax withholding rate
6.9% - state income tax
7.65% - Social Security and Medicare (approximate)
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40% - Total mandated deductions (rounded up from 39.55%).
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3. Which earnings will be the basis for this first lump sum payment?
On the December 23 check, the 3% payment will apply to all teacher contract earnings from July 1, 2010 through the last workday covered on your December 10 paycheck.
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4. How many days will be covered by the first lump sum payment?
It depends on your regular work calendar and any extra days worked since July 1, 2010.
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5. Is there an easy way to estimate your first lump sum?
No. It will vary for each member. There will be differences based on how many days you've worked and your extra earnings.
To calculate your total earnings to apply the 3%, you need to add up earnings from all of your paychecks covering days worked starting July 1, 2010.
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6. Does the 3% payment not apply to certain earnings?
Yes. The 3% does not apply to earnings not covered by the teacher contract - such as recreation department work.
It also does not apply to mileage payments.
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7. Is the lump sum retroactive pay?
No. However, it's treated like retro pay for tax deduction purposes and it will be identified on your paycheck as retro pay.