Types of Payroll
The Law Allowance is used to pay special separation allowances to qualified retired law enforcement officers through the month in which the retiree reaches age 62. Attributes of the law Allowance include:
- Subject to state and federal tax withholding
- Subject to FICA tax
- Exempt from contributory and matching retirement
- Disallowance of miscellaneous deductions except certain garnishments
Eligible employees who become temporarily or permanently disabled and are unable to perform their regular work duties may receive partial replacement income through the Disability Income Plan of North Carolina. It is the responsibility of the employer and the employee’s physician to determine if the employee is eligible.
Salaried employees are processed on a repeating payroll and paid on the monthly payroll cycle. Benefits for salaried employees vary, based on the amount of time worked. Full-time salaried employees earn all regular state employee benefits.
Cancellation and Rewrites
The Central Payroll Division provides two cancellation/rewrite (C&R) payroll dates and one stop order date for processing payment cancellations and rewrites. The C&R are processed on the first business day of the month and the first business day after the 15 of the month. Stop orders are processed four business days before the monthly payroll pay date.
The Longevity benefit is designed to reward permanent employees that have provided at least ten years of service to the State of North Carolina. Longevity payments are processed annually for eligible employees and represent a percentage of an employee’s annual salary as of the employee’s anniversary date. The percentage of annual salary used to calculate longevity payments is based on years of service, as shown below:
Years of Service Longevity Percentage
10 through 14 years 1.50%
15 through 19 years 2.25%
20 through 24 years 3.25
25 or more years 4.50%
The Student payroll is used to pay students that are employed by and enrolled in an institution as full-time students. Students are paid on the mid-month payroll cycle and are not subject to retirement or FICA tax. The Student Payroll is a non-repeating payroll that resets gross pay to zero each time the payroll is processed.
The Temporary Payroll is used to pay employees who have temporary employment assignments. This includes hourly temporary employees, temporary faculty, and some temporary salary staff. These are not eligible for benefits but are subject to FICA tax.
It is the policy of the State of North Carolina that all SPA and EPA employees paid by a payroll center administered by the Office of the State Controller (OSC) be required to use the direct deposit feature to receive payroll related payments. In accordance with federal requirements regarding direct deposit of payroll, the employee may select the financial institution of his/her choice to accommodate the receipt of direct deposit payments.
This policy is intended to maximize the utilization of electronic payments and to minimize the number of paper checks issued by the State, thereby obtaining efficiencies for the State and providing employees with a reliable and efficient manner of receiving their pay.
Overtime – 1.5%
Eligible salaried employees are paid 1.5% for hours worked in excess of 40 hours within a week, with the exception of those employees that are considered exempt. The exempt or non-exempt status of any particular employee must be determined on the basis of whether duties, responsibilities and salary meet the requirements for exemption.
Overtime – Straight Time
Overtime – straight time is paid when an eligible employee does not work the entire 40-hour workweek, but works beyond the 8-hour workday. The rules for eligibility are the same as for overtime – 1.5%, as stated above.
Additional compensation is paid to designated employees, regardless of appointment type, who are required to serve in “on-call” status. On-call status applies to an employee that is required to wear a pager and is on stand-by in case of emergency. At the discretion of the University, on-call compensation may be in the form of pay or compensation.
Holiday Premium Pay
Employees who are required to work on designated state holidays are given, in addition to regular salary, premium pay equal to one-half of their regular straight-time hourly rate for hours worked on state holidays.
It is the policy of the State of North Carolina to comply with all applicable laws and regulations governing the employment and compensation of foreign nationals within state government. The reporting and withholding of taxes associated with payments made to non-U.S. citizens by universities, community colleges, and other agencies of the State of North Carolina are in accordance with the laws and regulations of the U.S. Citizenship and Immigration Services (USCIS) and the Internal Revenue Service (IRS). The U.S. Citizenship and Immigration Services define what payments may be made to aliens who perform services in the United States. The Internal Revenue Service defines which payments made to aliens are reported and subject to taxes, as well as establishes the tax rates for those payments.
Glossary of Terms
Alien - any person who is not a citizen of the United States.
Resident alien - a foreigner who is a permanent resident of the United States (U.S.), but does not have citizenship. They have met the IRS requirements through their possession of a green card (an alien registration card issued by the U.S. Citizenship and Immigration Services) or have met the substantial presence test (criteria used to calculate the number of days an alien has been physically present in the U.S.) for the calendar year. Their income is generally subject to tax in the same manner as a U.S. citizen; therefore worldwide income is taxed.
Nonresident alien - a foreigner who does not meet either the IRS's green card test or substantial presence test. Their income is usually subject to U.S. income tax only on U.S. source income.