Human Resources

Off-Cycle Payments

An Off-Cycle (OC) payment is any employee pay that is not paid on the employee's regular pay frequency.

In general, Purdue has two pay frequencies: Biweekly and Monthly.

Example: If a monthly paid employee did not get paid or pay was omitted from the regular pay date, and an off-cycle is run to pay before the next regular payday.

Regardless of the wage type of payment (i.e., signing bonus, vacation payout, etc.), the missed amount of pay will be “added” (for the tax calculation) to the employee’s last regular payment. Our payroll software will calculate how much more tax would have been withheld had that stand alone payment been made with the previous pay, but any special wage type built – in tax rates (supplemental or bonus 22%) are ignored. For larger payments over $20,000, this federal withholding can withhold up to 37% (the top tax bracket). Payments around $10,000 have about 20 percent federal withholding.

Any applicable state, local, Social Security and Medicare tax withholding are flat percentages, totaling around 12%, will be withheld also.

This means that for larger amounts of off-cycle pay, almost 50% of the pay will be withheld in taxes.

Other limitations to off-cycle pay:

Regarding benefits, the HSA and 401(a) plans do not deduct for off cycle payments. Purdue University will make 401(a) contributions on the employee’s behalf. b. If the employee wants the additional HSA taken out in future pay, please log into BenefitFocus and adjust the HSA amount for the remainder of the year.

Knowing the higher Federal tax withholding and Benefits limitations on an Off-Cycle payment, the employee will need to decide either to:

  • receive the missed pay before the next payday, but with more Federal tax withholding, resulting in less net pay than expected, OR
  • wait to receive the missed pay on the next regular payday, but “normal” Federal tax withholding will apply. Please note that most pay will have the Federal marginal tax rate withholding, so the more money that is paid, the higher the Federal tax withholding. Additionally, this will most likely result in the same approximate Federal withholding as Option 1, however in this approach any pay that has the special supplemental withholding rate will calculate with the correct 22%.

NOTE: Off-cycle payments are NOT intended to be used as a substitute for meeting payroll deadlines as established in the payroll calendars published on the Payroll and Tax Services website.

POLICIES

Off-cycle payrolls are used to pay employees for regular earnings missed on a previous pay period and for which they cannot reasonably be expected to wait until the next regular pay period. Off-cycles are NOT to be used for:

  • Awards or Additional/Supplemental Payments
  • Quota Payouts
  • Amounts less than $100
  • Extending payroll deadlines as established in the published payroll calendars

Exceptions to the above must be approved by the Associate Director - Payroll.

SYSTEM CONSTRAINTS
Off-cycles cannot be used to pay an employee in a monthly position for work done on a biweekly position in advance of the scheduled monthly pay date.

SCHEDULES
For the scheduled off-cycle pay dates and associated deadlines, please refer to the published payroll calendars.

PAYMENT METHOD
Off-cycles are paid in the same manner as the regular payroll – either by direct deposit or check.

SUBMISSION OF FORMS

  • Original direct hire forms and recurring AdPay forms necessary to generate pay should be sent directly to the PA Specialists, Human Resources - Payroll. Be sure to note on these forms that you are requesting an off-cycle payment.

COMPLETION OF THE OFF-CYCLE PAYMENT REQUEST FORM

  • Last Name, First Name, MI - person to be paid
  • Dept # - number of applicable department submitting form
  • Personnel Number – also known as “PERNR” (NOTE: leave blank if action is add additional or new hire) • Pay Periods Covered – for biweekly, use the pay period – ex. BW 3 – 4; for monthly, use the month – ex. Jan
  • Pay Area – confirm pay area in EC as follows:
    • On home screen, search for the employee in question and select appropritate personfrom the drop down box.
    • Select the "employment information" tab.
    • Scroll down to "compensation information" to see needed information next to "pay group."
  • Comments – use this box to add any comments.
  • Business Office Contact – the name and phone number of the business office individual to be contacted with any questions/problems; do not put the employee’s name and number here.
  • Approval Signature and Date – off-cycles require Business Manager or above approval.