Tax Withholdings

Federal Tax Withholding is the amount of federal income taxes that your employer withholds from your paycheck. The amount of income tax withheld is based on your W-4 information provided to your employer and may be adjusted throughout the year. The amount of federal income tax that your employer has withheld from your paychecks annually is provided to the employee and the IRS (Internal Revenue Service) on your W-2 Annual Statement each year.

Update Your Tax Withholdings

Federal Rates

The federal income tax is a progressive tax that is affected by your tax filing status and your gross salary. In contrast, Social Security tax is a flat rate of 6.2% of your taxable gross up to $142,800 annually (2021 limit). Medicare tax is also a flat rate of 1.45% of your taxable gross up to $200,000 with an additional 0.9% tax for taxable wages over $200,000 annually.

Estimate Your Tax Withholdings

Out-of-State Employment

The State of Texas does not have an income tax. If you are residing and working from any state other than Texas, you must complete the (Out of State Work Location Form) and notify the Tax Specialist in Payroll Services.

More about Out of State Employment

International Employees

If you are a nonresident/resident alien for tax purposes you must notify the Tax Specialist in Payroll Services, to ensure that your tax withholding status is correct. We must have your proper employment documents to set you up on payroll.

More about International Employment

Student FICA Exemption

Student (Undergraduate & Graduate) employees enrolled in a minimum of half-time, in accordance with the Department of Education regulations are eligible for exemption for FICA taxes. Sam Houston State University employees who are benefit eligible (participate in a retirement program) are not eligible for the FICA tax exemption.

The student FICA exemption continues during normal school breaks of five weeks or less, as long as the student is otherwise eligible for the exemption on the last day of classes. However, a student who works during summer break but is not enrolled at SHSU is not eligible for the exemption for the time not enrolled.

Read Student FICA Policy

Taxable Fringe Benefits

A fringe benefit is a form of pay (including property, services, cash or cash equivalent) in addition to stated pay for the performance of services. Under Internal Revenue Code (IRC) Section 61, all income is taxable unless an exclusion applies. The IRS considers most fringe benefits to be taxable compensation that must be reported on tax forms (W-2).

Reporting Benefits

Some forms of a taxable fringe benefit (additional compensation) are moving expenses, personal use of a university owned vehicle, awards, gift cards, and any other benefit that an employee receives. To report these items to Payroll Services, please complete the Award/Gift Log or the Auto Report Log.

Award/Gift Log

Auto Report Log

For more information about moving expenses, read our FO-29 Moving Expenses policy.

Employee Education Assistance Program

If you are participating in the Employee Education Assistance Program, a portion of the fees waived under this benefit may represent taxable income to the recipient.

Filing Your Taxes

To file your taxes, you will need your W-2 to report your wages, compensations, and taxes withheld. While you may not need your 1095-C to file, you are encouraged to keep it. The IRS may use the information reported from your Form 1095-C to determine whether you (or your employer) may have to pay a fine for failing to comply with the Affordable Care Act.

Electronic Consent

To obtain your documents online, you must provide electronic consent through your Banner Employee Profile. Otherwise, you'll receive your documents in the mail.

How to obtain your documents

Unrelated Business Income Taxes

Unrelated Business Income is an activity that is unrelated business if it meets three requirements:

• It is a trade or business,
• It is regularly carried on, and
• It is not substantially related to the purpose of the exempt organization.

If your department has any income that is not related to tuition and fees, please complete our Unrelated Business Income Tax Questionnaire or reach out to our Tax Accountant.

UBIT Questionnaire

UBIT Worksheet

Out of State Employment

If your department will be hiring an individual or an individual will be relocating to another state, please contact Payroll Services. Adequate time (average 3 months) will be needed to register and become an employer in additional states that we are not currently registered to work in. Employees working outside the State of Texas must complete our Out-of-State Work Assignment Form upon being hired by Sam Houston State University or at any time that their residence changes. Sam Houston State University is registered as an employer in the following states:

International Employment

The following paperwork is required by the Payroll Services for hiring an International Employee:

• Substantial Presence Test
• I-20 (all 3 pages)
• I-94 (Online Printout)
• Visa
• Passport
• Social Security Card