Payroll Processes Overview

The standard and SOPs below are centered around payroll cycles, the timing of payments at IU, how to access paycheck information, request and process paycheck reissues, and the procedures for paycard pickups.

The standard below outlines the process for recording, reviewing, and approving time worked by non-exempt employees, as well as the timing of on-cycle and off-cycle payroll for both biweekly and monthly pay schedules at Indiana University. It highlights the requirement for employees, payroll processors, supervisors, and fiscal officers related to the payroll cycle at IU. Following and understanding this standard helps ensure accuracy in wage calculation, compliance with labor and tax laws, and timely payment to employees-supporting trust, transparency, and financial integrity in IU’s payroll operations.

The Office of the University Controller is in the process of converting Standard Operating Procedures (SOPs) into IU accounting standards. As such, these SOPs are no longer being updated. Information is as current as of the date of last revision available on these SOPs. Please continue to check back as SOPs are converted into standards within this book.

• PSOP 7.0 – Paycard Information
• PSOP 8.0 – Paycheck Reissue Process
• PSOP 23.0 – Paycheck and Paycard Pick-Up

UCO-PAY-3.00: Payroll Cycles and Timing of Payments

Prerequisites

Prior to reading the standard on Payroll Cycles and Timing of Payments, it is beneficial to review the below item to gain foundational information:

1. FIN-PAY-030: Timing of Payments and Off-Cycle Payroll

Preface

This standard will explain the different payroll cycles and when employees can expect to receive payment.

Introduction

Federal and state authorities regulate the timing of payroll payments. To meet its obligations, the university must develop payroll calendars to schedule the timely payment of its employees. Additionally, it is necessary to provide mechanisms to pay employees outside the regular payroll schedule (on-cycle payroll), when, due to errors or omissions, employees are not paid the full amount due them. This standard establishes University Payroll responsibility for the development of payroll schedules, as well as sets conditions when payroll payments submitted for off-cycle payrolls will be paid, to comply with applicable regulations and to strengthen internal controls.

Importance and Impact of Payroll Cycles and Timing of Payments

Indiana University pays non-exempt employees on a biweekly basis, two weeks in arrears, and pays exempt employees monthly, on the last business day of the month in which the work was performed (except for December, which is paid on the first business day of January). The schedule for payment is established by University Payroll annually to distribute all pay on the regularly-scheduled paydays through on-cycle payroll processes. University student academic appointees follow a separate payment schedule, the timing of which is determined by University Payroll with input from Academic Affairs.

It is the responsibility of the fiscal officer to be aware of the university payroll calendar to ensure appropriate controls are in place for accurate and timely payments as well as for budget management. The university payroll calendar is also important for employees to determine when they will receive pay and to determine the accuracy of their pay advice. It is the employee’s responsibility to communicate with their supervisor about any errors they identify on their pay advice. It is the supervisor’s responsibility to report errors to their unit’s payroll processor and fiscal officer.

For detailed information on current year university payroll calendar, please see the UCO Pay Dates webpage.

Payroll Cycles and Timing of Payments Discussed in Detail

University Payroll has the authority and responsibility to create, implement, monitor, modify, and enforce operating procedures and internal control processes consistent with this standard to ensure accurate and timely payment of Indiana University’s employees in compliance with the university’s legal obligations, including development of the annual university payroll calendar.

It’s the responsibility of the supervisor and fiscal officer to verify that the individual is properly established as an employee before services are performed to ensure accurate and timely payment. It is also the responsibility of the employee to ensure all required onboarding documentation has been provided on a timely basis.

Fiscal officers and payroll processors are required to be aware of and adhere to payroll period closing dates, which generally occur several business days in advance of the pay date.

In cases where an employee was not properly paid for any reason, such as omission from the on-cycle payroll, the occurrence of processing errors, or direction of the payment to the wrong employee, the employee’s department must prepare an off-cycle payroll payment (in the form of an ACH payment, paycard deposit, or a paper check) to the employee on the next available off-cycle payroll.

Off-cycle payroll should be used for the following reasons:

• Corrections/Adjustments of previous pay periods
• Tax refunds
• Deduction refunds
• Grossed-up payments
• Settlement payments
• Payout after involuntary termination of employment
• Stop payments and/or reissue
• Direct deposit returns initiated by the employee’s financial institutions
• Other circumstances determined appropriate by University Payroll, such as special payments needed for regulatory or tax compliance, or payments needed due to errors or omissions

Other payments, such as discretionary bonuses and awards, should continue to be processed during the on-cycle payrolls.

Supervisors and fiscal officers are responsible to ensure employees are promptly terminated on the conclusion of their employment to avoid overpayment errors.

Requirements and Best Practices

Requirements

1. It’s the responsibility of the supervisor and fiscal officer to verify that the individual is properly established as an employee before services are performed to ensure accurate and timely payment.
2. It is the responsibility of the fiscal officer to be aware of the university payroll calendar to ensure appropriate controls are in place for accurate and timely payments as well as for budget management.
3. Fiscal officers and payroll processors are required to be aware of and adhere to payroll period closing dates, which generally occur several business days in advance of the pay date.
4. Employees should regularly review their pay advices for accuracy with regards to earnings, deductions, and taxes. Employees can review the View Paychecks Online guide for detailed explanations of fields on their paycheck. Employees should immediately notify their supervisor of any issues with their pay advices.
5. Off-cycle payroll should only be used for the reasons noted in this standard.
6. Supervisors and fiscal officers are responsible to ensure employees are promptly terminated on the conclusion of their employment to avoid overpayment errors.