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Understanding Emoluments

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Introduction

This whitepaper addresses processing emoluments by the Texas A&M University System and integration with Workday and FAMIS.

Emoluments are compensations recorded in Workday that occur outside the regular payroll process. These payments can be either cash or noncash. For example, noncash emoluments might include company cars or housing provided to employees, whereas cash emoluments could be gift cards paid outside the payroll system. Recording these payments in Workday ensures they are properly taxed and reported on employees’ W2 forms.

Emoluments in Workday

  • Entry as one-time payment or allowance: Emoluments are entered into Workday as one-time payments (payroll inputs) or allowances or recorded as recurring allowances (e.g., Housing, Employer-Provided Vehicle, etc.).
  • Employee tax: Both cash and noncash emoluments are subject to federal taxes, and Workday calculates taxes (Federal Insurance Contributions Act [FICA] and Federal Income Tax) on these payments. This tax is usually deducted from other earnings the employee may have. If no earnings are present, the deductions will go into arrears.
  • No impact on retirement or GIP: Group Insurance Premium (GIP; sometimes referred to as State GIP [SGIP]) is the employer contribution made to cover an employee’s health insurance). Emoluments do not affect retirement calculations or GIP.
  • Employer contributions: The employer is also taxed for the employer FICA. It is applied and paid based on the current cost allocations for that employee. The costing allocation account can be specified as part of the emolument data entry.

FAMIS Integration

  • Allocation to FAMIS SL accounts: The FAMIS SL account to bear the employer tax (FICA) on the emoluments is usually derived from the payroll input or the allowance.
  • Zero gross pay: Emoluments are a zero gross pay payroll item.
  • FICA application: Workday calculates the FICA to these payments.
  • No GIP allocation: GIP is not allocated to emoluments. Beginning with July 2024 payrolls, Unemployment Compensation Insurance (UCI) and Workers’ Compensation Insurance (WCI) are not assessed on emoluments.
  • FTE report exclusion: Emoluments are not on the full-time equivalent (FTE) report.