Employment Tax

Payroll Tax Rates

The Federal Withholding tax rates are based on the IRS tax tables. The IRS tax tables are adjusted each year and may result in a minor difference in your federal withholding amount.

The Social Security tax rate is 6.2% on all taxable wage up to the below YTD amounts. When your YTD taxable wage reach the maximum amount for a tax year, wages above the maximum amount are not taxed for Social Security.

2025 Tax Year: $176,100

2024  Tax Year: $168,600

2023 Tax Year: $160,200

2022 Tax Year: $147,000

Please note: If reached the maximum taxable wage limit while employed by a previous employer and before your employment with Texas A&M University (TAMU), you will be taxed Social Security on all TAMU pay until you reach the maximum taxable wage limit under TAMU. When you have more than one job in a year, each of your employers must withhold Social Security taxes from your wages without regard to what the other employers may have withheld. You may then end up with total Social Security taxes withheld that exceed the maximum. You can claim a refund from the IRS of those Social Security taxes withheld that exceeded the maximum amount when you file your tax return the following year. For more information, see the SSA website.

The Medicare tax rate is 1.45% on all taxable earnings. In addition, any taxable earnings over $200,000 is taxed additionally at 0.9% bringing the total tax rate for all wages over $200,000 to 2.35%.

All supplemental wages will be subject to federal income tax at 22% per IRS regulations and all pre-taxable deductions will be proportionately distributed across both supplemental wage and regular taxable wages. This may result in a minor difference in your federal withholding amount.

If you have any questions, you may email tax@tamu.edu.

Tax Withholding on Non-Salary Compensation (Emoluments)

A Request One Time Payment business process must be initiated and submitted through Workday to collect the taxes on non-salary compensation. A PDF screenshot showing the submission to payroll from Workday should be attached to the Concur expense report or Aggiebuy document. This can be accessed by clicking on your Inbox and then Archive in Workday.

Emolument one-time payment plan choices begin with "Emolument" and include common categories such as cash awards, gifts, non-qualified moving expense (relocation allowance not grossed up and paid through AggieBuy), >v90 day reimbursement, etc. Please file back-up material in your employee's departmental file for audit purposes.

Note: Any choices that start with Emolument will tax the employee on the gross and net pay will be reduced; it will not pay the employee the amount of the one-time payment.

Emolument Exceptions

Some emoluments should not be entered using the "Request One-Time Payment" business process. These exceptions must be handled by payroll services and include:

  • Emoluments for a Terminated Employee
  • Emoluments for a Retired Employee
  • Emolument Gross-Up (department pays taxes on employee's behalf)
  • Emoluments for employees who don't work in your supervisory organization

Emolument exceptions should be requested using the Payroll Payment Request form located on Payroll Services Website. Complete the Emolument Payment section, include the reason number from the second page, and provide a detailed explanation. Send the completed and signed form to payroll@tamu.edu.

Emoluments for Less than 12-month Annual Work Period Employees

Taxes on non-salary compensation cannot be taken if an employee is not receiving pay. Emoluments for Employees working in less than a 12-month annual work period cannot be processed if the effective date is in a period the employee is not working. If payroll services discovers this error before pay calculation it will be deleted; HROE will be notified to request the business process be rescinded. Once rescinded, departments have two choices for processing the emolument; they can initiate a new Request One Time Payment business process when the employee has returned to work or if they want to pay the taxes on behalf of the employee, they can complete and send the Payroll Payment Request form to be processed as a gross up exception.

Employment Tax Resources

Employment Tax Rules and SAPs

Employment Tax Forms