Business Affairs Office : Administrator Services

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Student Federal Work-Study Employment Off-Campus

Employer Costs:

In addition to 50% of the salary expense, your agency will be responsible for additional payroll related employer costs which will vary from less than 1% of gross pay to approximately 9% of gross pay.  The amount charged is based upon full-time vs. part-time enrollment status of the student employee.

Normally, students with work-study awards are required to be enrolled full-time, which means lower costs for your agency.  However, when students are not enrolled full-time, they are subject to both Social Security and Medicare taxes and the employer costs increase. 

The payroll related employer costs are as follows:

Social Security Tax  6.2% of gross pay     (when student is not enrolled full-time)
Medicare Tax  1.45% of gross pay  (when student is not enrolled full-time)
Mass Transit Tax   .6% of gross pay, unless federal grant funded.*
Workers' Compensation Assessment  1.5 cents per hour worked.   Limit: $2.60 per month

* Depending upon work location, a mass transit tax may be assessed.  However, if your agency is funded by federal grant funding, no mass transit tax will be charged.  Note:  Agencies that are federal grant funded are issued a contract number that begins with the number "2."

Social Security and Medicare Exemption:

Students that are enrolled half time or more are exempt from Social Security and Medicare tax.  Undergraduates must be enrolled in 6 credit hours and graduates must be enrolled in 5 credit hours to be exempt. 

Updated May 22, 2009