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Human Resources Services
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Payroll Information
Payment for Personal Services to
Employees and Independent Contractors/Consultants  
(updated 8/01/2011)


Introduction

Individuals who perform personal services for Pittsburg State University may be paid through either the payroll process or the accounts payable process. The correct process to use depends on whether the individual to be paid is an employee or an independent contractor/consultant. An employee must be paid through the payroll process. An independent contractor/consultant may be paid through the accounts payable process.

It is important that the department know the correct process to use to pay the individual BEFORE services are performed.  If the department wants to pay the individual as an independent contractor/consultant, the Independent Contractor/Consultant Certification & Request to Pay Worksheet should be completed and submitted to the PSU Purchasing Office a minimum of 10 working days prior to the date when the individual first performs services for PSU. This will provide time for the request to pay as an independent contractor/consultant to be reviewed and approved before services are rendered.  If there are 5 working days or less before services are first rendered, the department should appoint the individual as an employee to ensure that appropriate paperwork is completed in a timely manner.

The following information outlines the process to use to pay an individual as an employee or an independent contractor/consultant. 

#1 -- Payment to a new PSU Employee - Generally

New classified and unclassified employees and graduate assistants are appointed and reappointed through the GUS hiring process.  See information found in E-Appointment for more information.  Student employees are appointed through the GUS Student Employment menu.  

See #2, below, if a PSU employee who is already appointed to a benefits-eligible position performs extra duties for PSU.

See #3, below if a PSU employee is performing services for another Regents Institution.

See #4, below, if the individual to be paid is an employee from another Regents Institution.

  • Department's Responsibilities:

    • Complete the electronic hiring process to appoint the employee as an unclassified, classified or student employee or graduate assistant before the employee's first day at work.

    • Direct the employee to the President's Office, Human Resource Services Office, Student Employment or Graduate Office to complete personnel/payroll paperwork on or before their first day at work.

  • Employee's Responsibilities:

    • Complete a W-4 Form, I-9 Form and other required personnel/payroll paperwork on or before their first day at work.

    • Pay employee's share of Social Security and Medicare tax through payroll deduction. (May not apply to students, graduate assistants and nonresident aliens.)

    • Report taxable income on appropriate income tax forms, if required.

  • PSU's Administrative Responsibilities (HRS/Payroll):

    • Withhold federal and state income tax at appropriate rate based on employee's completion of W-4 Form and 8233, if eligible.

    • Withhold employee's share and pay employer's share of Social Security and Medicare tax. (May not apply to students, graduate assistants and nonresident aliens.)

    • Pay Federal Unemployment Tax. (Does not apply to students, graduate assistants and nonresident aliens.)

    • Pay workers compensation insurance.

    • Pay sick leave assessment.

    • Issue W-2 and/or 1042-S for calendar year.

#2 -- Payment to a PSU Employee for Extra Duty (Benefits-eligible Employees only)

This procedure is generally used to pay a PSU employee for duties performed in addition to the employee's regular, benefits-eligible appointment. Payments are processed through payroll. Contact Administration & Campus Life for assistance, if needed.

  • Department's Responsibilities:

Note: Departments should contact HRS before paying a non-exempt employee on an EDC form. Payments to non-exempt employees may require the payment of overtime compensation.

#3 -- Payment to a PSU Employee for Services Provided to Another Regents Institution

This procedure is used when a PSU employee provides services to another Regents Institution. The payment to the employee is processed through PSU's payroll. Contact Administration & Campus Life for assistance, if needed.

  • Other Regents Institution's Responsibilities:

    • Obtain written approval from PSU before the PSU employee provides services to the other Regents Institution.

    • Notify the PSU department when services have been completed.

  • Department's Responsibilities:

    • Complete an Extra Duty Compensation (EDC) form. Attach a copy of the notification from the other Regents Institution that the work has been completed.

    • Route the EDC form through the approval process.

  • PSU's Administrative Responsibilities (Administration & Campus Life):

    • Assign funding on the EDC form from "other agency overload."

    • Invoice the other Regents Institution for salary and fringe benefits charged after the employee has been paid through PSU's payroll from the EDC form.

#4 -- Payment to an Employee from Another Regents Institution for Services Provided to PSU

This procedure is used when PSU "hires" an employee from another Regents Institution. The payment to the employee is processed through the other Regents Institution's payroll. Contact Administration & Campus Life for assistance, if needed.

  • Department's Responsibilities:

    • Obtain written approval from the individual's Regents Institution before the employee provides services to PSU.

    • If the individual is teaching a class, prepare appropriate paperwork to appoint to an unclassified position. Note the following on the appointment form under Salary Source: "Employee of another Regents Institution." Attach the approval from the Regent's Institution to the appointment paperwork and route through the approval process.

    • Notify the Regents Institution when the service has been completed. This notification authorizes the institution to process payment through their payroll. The Regents Institution will prepare an invoice for the individual's salary and fringe benefits and will send the invoice to the PSU department.

    • Prepare a DPR after the invoice is received from the Regents Institution. Send the DPR to Purchasing with the invoice.

Note: Appointment paperwork may not be required if the individual is providing services other than teaching (i.e. guest speaker). Contact Administration & Campus Life, if needed.

  • PSU's Administrative Responsibilities (Business Office):

    • After receiving the invoice from the department, process an inter fund to reimburse the Regents Institution.



#5 -- Payment to an Independent Contractor/Consultant - Generally

This procedure is followed after the department has completed the "Independent Contractor/Consultant Certification & Request to Pay Worksheet" and PSU has determined that the individual is an independent contractor/consultant and is either a U.S. citizen or a resident alien. See #6, below, if the independent contractor/consultant is a nonresident alien.

  • Department's Responsibilities:

    • Complete Section II and III on the Independent Contractor/Consultant Certification & Request to Pay Worksheet and submit to the PSU Purchasing Office a minimum of 10 working days prior to the date when the individual performs services by PSU. If there are 5 working days or less before services are first rendered, the department should appoint the individual as an employee. See #1, above.

  • Independent Contractor/Consultant's Responsibilities:

    • Complete Section I on the Independent Contractor/Consultant Certification & Request to Pay Worksheet within established timelines.

    • Track and report taxable income to IRS.

    • Pay estimated income tax, including self-employment tax (for Social Security and Medicare).

    • File an income tax form each year and pay taxes on net earnings.

    • Provide workers compensation insurance, if required.

  • PSU's Administrative Responsibilities (Business Office):

    • Issue Form 1099 if the independent contractor/consultant is paid more than $600 in a calendar year. (Includes all payments from the State of Kansas.)



#6 -- Payment to an Independent Contractor/Consultant (Nonresident Alien)

This procedure is followed after the department has completed the "Independent Contractor/Consultant Worksheet Certification & Request to Pay Worksheet" and PSU has determined that the individual is an independent contractor/consultant and a nonresident alien.

  • Department's Responsibilities:

    • Complete Section II and III on the Independent Contractor/Consultant Certification & Request to Pay Worksheet and submit to the PSU Purchasing Office a minimum of 10 working days prior to the date when the individual performs services by PSU. If there are 5 working days or less before services are first rendered, the department should appoint the individual as an employee. See #1, Verify that the individual has provided a copy of their Visa, I-20 and Social Security card, and have completed a W-8 BEN. Copies of these documents must be attached to the Worksheet. Coordinate completion of IRS form 8233 (Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien individual) and determination of tax treaty provisions with the Business Office, if appropriate, before the individual provides services to PSU. Note: Independent contractor/consultant payments to nonresident alien individuals are subject to the federal income tax withholding at the rate of 30% and state income tax withholding at the rate of 5% unless specifically reduced or excluded by a tax treaty between the United States and the foreign visitor's country of residence. IRS form 8233 is completed by the nonresident alien to claim exclusion or reduction of federal income tax withholding.

       

  • Independent Contractor/Consultant's Responsibilities:

    • Complete Section I on the Independent Contractor/Consultant Certification & Request to Pay Worksheet within established timelines.

    • Provide a copy of their Visa, I-20, Social Security Card and W-8 BEN. Track and report taxable income.

    • Pay estimated income tax, including self-employment tax (for social security and Medicare) throughout the year.

    • File income tax form each year and pay taxes on net earnings.

    • Provide workers compensation insurance, if required.

  • PSU's Administrative Responsibilities (Business Office/Purchasing):

    • Send the completed 8233 to the following address within 5 days of receiving the form from the individual:

      Office of the Assistant Commissioner (Intern'l)
      Director, Office of Internat'l District Operations
      Attn: CP:IN:D:C:SS
      950 L'Enfant Plaza South, S.W.
      Washington, DC 20024
    • Complete DA-120 Payment Voucher and DA-35NRA. Send the DA-120, DA-35NRA and a copy of the 8233 to:

      Accounts & Reports
      900 SW Jackson
      Room 355S, LSOB
      Topeka, KS 66612-1220
    • Withhold federal state income tax at 30% rate and state income tax at 5% rate unless specifically reduced or excluded by a tax treaty between the United States and the foreign visitor's country of residence.

    • Issue Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) to report all payments in a calendar year.