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University Social/Country Club Membership Procedure

The provision of a country club membership by an employer is specifically covered in Treasury Regulations §1.61-21(a)(1) as a fringe benefit which is normally subject to inclusion in income of an employee. The University has developed the following procedure to be followed by each University employee that receives Social/Country club membership benefits paid by the University.

PROCEDURE

Account Payable:

  • Provides a copy of social club membership agreement signed by the University to the Controller’s Office if available, and the amount of initiation fee paid once the process is completed
  • Provides Controller’s Office with the names and total amount of benefit paid from November 16th of the previous year through November 15th of the current year and submitted to the Controller’s office by November 20th of the current year
  • Provides a link on the AP website to the procedure and log that is maintained on the Controller’s Office website

Controller’s Office:

  • Sends Social Club membership procedure and log to the eligible employee when notice is received from A/P and advise them to contact Controller’s Office if assistance is needed (see log template on left)
  • In October, sends eligible employee a reminder to complete the log up to November 15th
  • Receive completed (actual) Social Club Log from the employees by November 20th
  • Obtain total taxable benefit recorded in the employees’ earning records from Payroll Office
  • Calculate any adjustment needed for each employee by comparing estimate recorded in the employee’s earning record to the actual taxable benefit received; then adjust accordingly. This adjustment would be reflected in the final paycheck of the year
  • Submit the adjustment to the Payroll office by agreed upon date
  • Calculate estimated benefit for next year based on previous year amount, the annual amount would be divided by 24 pay periods
  • Inform Payroll Office of the new benefit amount by January 8th
  • Inform Payroll of any adjustment needed for terminated employees before their final pay

Employee:

  • Submit a copy of social club agreement to the University Controller’s Office
  • Employee determines if Controller’s Office should use previous year taxable benefit to calculate current year estimated taxable benefit or submit new Social Club Log base on estimate
  • Submit actual Social Club Log to the University Controller’s Office by November 20th, of the current year; this should cover November 16th of previous year to November 15th of the current year
  • Employee reviews his or her final paycheck of the year for accuracy.
  • Terminated employee would complete final log and submit it to designated employee in the department who will submit it to Controller’s Office for process

Payroll Office:

  • Receive estimated employee taxable benefit from the University Controller’s Office by January 8th
  • Record estimated taxable benefit in employees’ earning record from January 16th to December 31st
  • Adjust employee earning record based on data received from Controller’s Office. This adjustment would be reflected in employee’s December 31st paycheck
  • Receive next year estimated employee taxable benefit from the University Controller’s Office by January 8th and record accordingly
  • Resume new payroll deduction from January 16th