The sponsoring reporting unit issues a "Graduate Internship Agreement" at the beginning of the academic year. The agreement contains the following elements:
Graduate intern is paid at the beginning of the quarter, or when the tuitions are due. Graduate intern is paid in advance, prior to hours being worked.
Graduate intern is required to turn in a special time sheet per quarter, detailing the total number of hours worked for each day. Intern should not use the standard time sheets used for on-campus students to avoid confusion and double payment.
The hourly wage is determined by dividing the quarterly compensation by the average number of hours each quarter.
For example: Graduate intern A is to receive $2,552 in Spring'01 . S/he works 20 hrs/week. Her/his hourly rate is calculated as follows:
Number of hours for Spring'01: March 26 - June 8'01: 11 weeks X 20 hrs/week = 220 hrs/quarter
Hourly rate: $2,552/qtr / 220 hrs/qtr = $11.60
****Note that the hourly rate for graduate intern is above the regular standard rate for on-campus students' position.
FICA and Medicare Taxes:
The University's policy corresponds to Internal Revenue Service (IRS) Revenue Procedure 98-16 (student FICA exception) guidelines which excludes FICA taxes of the wages paid to working students who are also enrolled and regularly attending classes. The Revenue Procedure exempts students who are at least half-time undergraduate, graduate or professional students, so long as they are not also career employees. Seattle University definition of half-time graduate means that the student is carrying a 3 credits academic workload per quarter.
In general, graduate intern is exempted from FICA and Medicare Taxes, by the Agreement he/she is required to enroll in at least 6 credits per quarter.
Federal Income Tax:
The amount of withholding is depending on wages per pay period and exemption status as filed on W-4.
Workman Comp/Industrial Tax:
Industrial Tax is calculated by multiplying the number of hours worked in a quarter times 0.04140 (rate for 2001)
The sponsoring reporting unit notifies the Payroll Office as soon as an intern leaves the position prior to completion of service. The Payroll Office will recalculate the earned compensation less taxes and request the graduate intern to issue a check to Seattle University in payment of the unearned compensation.