Federal Income Tax (FIT)

This tax is deducted from the pay of applicable employees. Certain fellowships and scholarships, as well as foreign nationals who qualify for treaty benefits, are exempted.

Certain types of deductions, such as retirement, medical benefits, medical spending, dependent care, qualified parking and transportation benefits may reduce the FIT taxable income for an individual.

There is not one specific amount or percentage of income the university must withhold. Taxation is based upon the information provided on the federal Form W-4.

FICA: Federal Insurance Contribution Act

FICA is broken down into Social Security and Medicare deductions. This tax is deducted from the pay of all applicable employees. Undergraduate and graduate students who are currently enrolled for a minimum of six credit hours for the fall and spring semesters and a minimum of three credit hours during each of the summer sessions are exempt from FICA taxes.

Foreign nationals on F1 or J1 visa that have not stayed more than five years as a student in the U.S., or two years as a visiting teacher/researcher in the U.S., may also be exempted. Also, certain fellowships and scholarships are exempt from FICA taxes. Wages paid in excess of $200,000 to high-earner employees will be subject to an extra Medicare tax that will be withheld from those employees’ wages.

SIT/SUI: PA Income Tax/Unemployment Tax

This tax is deducted from the pay of  Pennsylvania resident employees for services performed either in or outside Pennsylvania, and from wages of nonresident Pennsylvania employees for services performed in Pennsylvania. Certain types of deductions, such as medical benefits, might reduce your SIT taxable income.

Pennsylvania has reciprocal agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. The agreements ensures that one state will not tax the others’ residents on employee compensation that is subject to employer withholding. Reciprocal agreements apply only to compensation, not to other classes of income.

Employees residing in any of the reciprocal states must complete and submit to Payroll Management the PA Form REV-419 to take advantage of the reciprocity. Temple University is not required to withhold taxes for the reciprocal states, and will not withhold the other states’ taxes. Therefore, you might be required to file estimated taxes in your resident state. We recommend you seek tax advice before making this election.

Local Taxes

Temple University currently withholds local wage taxes for municipalities in which it has a physical presence, such as a campus, physicians practice or other facilities. Many municipalities have a local wage tax, a one-time occupational tax, and/or an emergency and municipal services tax. Residents of the city of Philadelphia must pay a city wage tax at the current tax rate in effect, regardless of where they are physically located when performing services. Some nonresident Philadelphia employees may be eligible to request a refund of Philadelphia's city wage tax withheld.

Tuition Remission: Taxation for Graduate Programs

Graduate tuition remission benefits exceeding $5,250 at Temple University for eligible employees are subject to Federal, FICA Retirement (6.2%), and FICA Medicare (1.45%) tax withholding. If the benefit surpasses this threshold in a calendar year, the excess amount is added to taxable income and taxed accordingly. The exclusion calculation starts from the Spring semester's tuition value and ends with the Fall semester. Once the exclusion is exceeded, all subsequent tuition benefits become taxable. This taxable amount is evenly spread over months for monthly employees and pay periods for biweekly employees, with no exceptions.

You can estimate your taxes and withholding using the IRS withholding estimator found at https://apps.irs.gov/app/tax-withholding-estimator. For personalized advice, consult a tax professional or financial advisor. For further inquiries, contact 215-926-2244 or email [click-for-email].

Contact Us

For questions regarding required tax deductions, call 215-926-2245 or email [click-for-email].