Payroll Tax

This page provides resources and explanations of payroll tax terminology related to university employee compensation and benefits.

Payroll Tax Resources

Standard mileage rates (IRS) - Looking for mileage rates for reimbursements? Visit the IRS website to see the latest updates on mileage rates for the current year.
W-4 Estimator - Employees can use this calculator to monitor the impact of their current Federal withholdings on their annual tax liability. The calculator is interactive, allowing the user to input their specific tax makeup for their household and receive results showing whether they are on track to break even, owe taxes, or receive a refund at the end of the year. The calculator will also provide a recommendation on how to complete the Form W-4.
International Employees who wish to apply for treaty or tax benefits for 2026, please click on this link to schedule an appointment with Payroll Services.
For student tax information, see the student tax guide. For international student tax information, see the international tax guide.
Fee breakdown for pre-paid debit cards for payroll payments. Please note these fees are subject to change.

Accessing Employee W-2 Statements

VCU employees who have given their e-Consent may view and print their W-2 statements online. (Consent remains in effect until revoked by the employee.) Instructions for accessing W-2 statements are below:

- Log on to VCU e-Services.
- Click the "Employee" tab, then "Employee Dashboard".
- Scroll down to the "Taxes" drop-down, where you will find a link to "W-2 Wage and Tax Statement".
- Select the tax year, then click Display. Select earlier years if you need to see a prior statement.

Payroll Tax Terminology

Compensation

Per IRS and State Regulations, all compensation is subject to Federal, Social Security, Medicare, and State tax unless there is a provision within the IRC or state tax code that exempts the compensation. Different types of compensation are subject to different taxation rules.

Here are a few income types to keep in mind:

Regular Pay (Salary and Hourly): Taxable compensation for FED, FIC, MED, and state tax. Taxed at the graduated tax tables. This is where the Form W4 and State tax form come into play.

Supplemental Pay: These are lump sum payments that happen outside of or in addition to your regular salary and wages. These are pay types such as bonuses, leave payouts, and retro payments. These are taxed at the supplemental wage rate. 2026 rates are: Federal: 22%(37% >$1 Million), Virginia: 5.75%, California: 6.6% (Bonuses: 10.23%)

FICA Tax Exemptions

Domestic Student FICA Exemption: Students who are enrolled at least half-time and employed by the school in which they attend are eligible for an exemption from Social Security and Medicare tax. The exemption does apply to school breaks of 5 weeks or less. The exemption ends when the student is not enrolled, falls below half-time enrollment, or meets the definition of a career employee. Employment has to be secondary to the pursuit of study.

International Exemption*: Non-immigrant foreign persons who are temporarily in the US under an F-1, J-1, M-1, Q-1, or Q-2 visa and working for VCU are exempt from FICA (Social Security and Medicare) taxes as long as they have not exceeded the presence timeframe. (Students = 5 years, Non-students = 2 years)
_{*Internal Revenue Code (26 USC 3121 (b) (19)) *Social Security Act (42 USC 410 (a) (19))}

Federal Tax and State Tax

Your compensation is taxed based on:

Filing Status (Single, Married Filing Single, Married, or Head of Household)
Pay Frequency (VCU pays semi-monthly)
Taxable wages (Gross pay minus any pretax deductions or non-taxable earnings)
Any additional items per the completed W-4 or state tax form, such as additional tax withholding requests

Using the tax tables provided by the IRS or States and loaded into Banner, your semi-monthly deductions are withheld and deposited to the Federal and State government on your behalf.

Fringe Benefits — Social and Country Club Memberships

Procedures: 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 the income of an employee. The university has developed the following procedure for each university employee who receives social/country club membership benefits paid by the university.

Social Club Template

Accounts Payable

Provides a copy of the social club membership agreement signed by the university to the Controller’s Office if available, and the amount of the initiation fee paid once the process is completed.
Provides the Controller’s Office with the names and total amount of benefit paid from Nov. 16 of the previous year through Nov. 15 of the current year and submitted to the Controller’s Office by Nov. 20 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 employees when notice is received from AP, and advises them to contact the Controller’s Office if assistance is needed (see log template above).
In October, send a reminder to eligible employees to complete the log by Nov. 15.
Receive completed (actual) Social Club Log from the employees by Nov. 20.
Obtain the total taxable benefit recorded in the employees' earning records from the 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 the 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 Jan. 8.
Inform the Payroll Office of any adjustments needed for terminated employees before their final pay.

Fringe Benefits — Social Club Dues

Employees

Submit a copy of the social club agreement to the Controller’s Office.
Employee determines if the controller’s office should use the previous year's taxable benefit to calculate the current year's estimated taxable benefit or submit a new Social Club Log based on the estimate.
Submit the actual Social Club Log to the University Controller’s Office by Nov. 20 of the current year; this should cover Nov. 16 of the previous year to Nov. 15 of the current year.
Review of the final paycheck of the year by the employee for accuracy.
The terminated employee would complete the final log and submit it to the designated employee in the department, who will submit it to the controller’s office for processing.

Payroll Office

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

Fringe Benefits — Taxable Tuition

Tuition benefits paid for by VCU on behalf of the employee are considered taxable income under federal regulations unless the course meets the criteria to be excluded from income.

Exclusion Criteria:

Undergraduate courses are excluded from tax reporting and withholding.
Graduate-level courses are excluded, up to $5,250 in benefits received. Any additional monetary value of tuition benefits received is taxable unless the courses taken meet the criteria to be classified as a working condition fringe benefit. To meet the working condition fringe benefit criteria, the following conditions must all be met:
- A. The courses must not be necessary to meet the minimum education requirements of the current job.
- B. The courses are not taken to qualify the employee for a promotion or transfer to a different type of work
- C. The education must be related to the employee’s current job and must help maintain or improve the knowledge or skills required for that job (e.g., refresher or update courses). If the requirements change while the employee is working, employer-paid education designed to meet them is considered a working-condition fringe.

The benefit is taxed in late October/early November via payroll. The Payroll Office proactively works with employees receiving tuition benefits to identify any tax liability and exclusions.

Payroll Services holds regular Quarterly Tuition Benefit Taxation Overview Webinars to help employees understand how this benefit may affect their annual taxes. Please see Employee Tax Updates to register for upcoming sessions.