Human Resources

Off-Cycle Payments

What Is an Off-Cycle Payment?

An Off-Cycle (OC) payment is any employee pay issued outside of an employee’s regular pay frequency.

Purdue has two standard pay frequencies:

  • Biweekly
  • Monthly

Example: A monthly-paid employee misses pay on the regular payroll. An off-cycle payroll is run to issue payment before the next regular pay date.

Overview

Off-cycle payrolls are used only when employees cannot reasonably wait until the next regular payroll for missed regular earnings. Off-cycle payments are NOT a substitute for meeting payroll deadlines established in the published payroll calendars.

Off-Cycles May NOT Be Used For:

  • Awards or additional/supplemental payments (Overload, Extra Duty, Moving Allowance, etc.)
  • Quota payouts
  • Amounts less than $100
  • Extending payroll deadlines

Exceptions require approval from Human Resources.

 

How Off-Cycle Payments Are Taxed

Off-cycle payments are taxed differently than regular payroll and often result in higher federal withholding.

Federal Tax Withholding

  • Regardless of wage type (e.g., signing bonus, vacation payout), the missed amount is added to the employee’s most recent regular paycheck for tax calculation purposes.
  • The system calculates how much additional federal tax would have been withheld if the payment had been included with the prior paycheck.
  • Special wage-type tax rates (such as the 22% supplemental/bonus rate) are ignored in off-cycle processing.

What this means in practice:

  • Payments around $10,000 may have roughly 20% federal withholding.
  • Payments over $20,000 can have federal withholding up to 37% (top marginal tax rate).

Other Tax Withholding

In addition to federal tax, the following are withheld at flat percentages, totaling approximately 12%:

  • State tax
  • Local tax (if applicable)
  • Social Security
  • Medicare

Important: For large off-cycle payments, combined tax withholding can approach 50% of gross pay.

Benefits Impact on Off-Cycle Payments

  • HSA and 401(a) employee deductions do not occur on off-cycle payments.
  • Purdue University will still make the employer 401(a) contribution.
  • If the employee wants to increase HSA contributions later to make up the difference:
    • Log into BenefitFocus and adjust the HSA election for the remainder of the year.

Employee Decision: Get Paid Now or Wait

Given the higher federal withholding and benefit limitations, employees should choose between the following options:

Option 1: Receive Pay via Off-Cycle

  • Paid before the next regular payday
  • Higher federal tax withholding
  • Lower net pay than expected

Option 2: Wait for Next Regular Payroll

  • Paid on the next scheduled payday
  • Normal federal withholding calculations apply
  • Special supplemental payments will calculate using the correct 22% rate, when applicable

Note: Because federal withholding is marginal, both options often result in a similar total federal withholding over time.

Other FAQs

Payment Method

Off-cycle payments are issued using the same method as regular payroll:

  • Direct deposit
  • Paper check

Pay Schedules

For scheduled off-cycle pay dates and deadlines, refer to the published Payroll Calendars.

System Constraints

  • Off-cycles cannot pay a monthly-position employee for work performed in a biweekly position before the scheduled monthly pay date.

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 appropriate person from 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.