Using Split Direct Deposit to Establish Reserves for Summer Months
Faculty with 9-month appointments can take advantage of the split deposit feature in Workday to help manage their reserves for the summer months. With a one-time election in Workday, faculty can distribute their monthly paychecks across two accounts. One of those accounts can be used to provide regular monthly income during the nine-month appointment, while the other accumulates income that will be reserved for the summer months. The guidance below is intended to help address the most common questions. Please reach out directly to payroll@austin.utexas.edu for personal assistance.
How should I split my paycheck?
How you split your paycheck should be determined by your personal goals for your salary management. You can choose whether to put a specific dollar amount or a percentage of each paycheck into the first account. The balance will go to your second account. Below are two examples demonstrating each option. In both examples, Account 1 would be your summer reserves.
Percentage Split Example
Putting a percentage of your paycheck into your first account is a good option if you want to treat your 9- month salary as 12 months of income. Note that if your salary changes (e.g., you receive a one-time supplement), the percentage split will be applied to that supplement as well.
Example 1: I want to distribute my 9-month salary of $90,000 so I have the same amount available each month of the year. (Example based on gross pay.)
Strategy: Put 25% of each paycheck into one account and use the balance (75%) for monthly expenses.
Desired Monthly Rate |
|
|
Faculty’s 9-month rate | $90,000 |
|
Monthly gross income (divided over 9 months) | $10,000 |
|
Desired monthly gross income (divided over 12 months) | $7,500 |
|
Split Deposit |
|
|
Monthly paycheck | $10,000 |
|
25% to Account 1 (example: savings) | $2,500 |
|
75% to Account 2 (example: checking) | $7,500 | <- monthly income (9 months) |
Summer Funds Reserved in Account 1 |
|
|
Reserved each month | $2,500 |
|
Total reserved (over 9 months) | $22,500 |
|
Available each month of summer (over 3 months) | $7,500 | <- monthly income (summer) |
Specific Amount Split Example
Selecting a specific amount to put into your first account each month is a good option if you have a specific financial target in mind for your reserves. If you anticipate a loss in income at any point (e.g., go on LWOP), you may want to change your split to ensure you have sufficient funds available to you. Note that with this method, Workday will deposit the specified amount to Account 1 and any amount over that will deposit to Account 2. If your salary changes (e.g., you receive a one-time supplement), the full amount of the supplement will go to Account 2.
Example 2: I want to save $25,000 for the summer from my $90,000 nine-month salary. (Example based on gross pay.)
Strategy: Determine the fixed amount that must be put into Account 1 each month.
Desired Summer Savings |
|
Desired Total Amount | $25,000 |
Amount to save each month (divided by 9) | $2,778 |
Split Deposit |
|
Monthly paycheck | $10,000 |
Amount to Account 1 (example: savings) | $2,778 |
Balance amount to Account 2 (example: checking) | $7,222 |
Summer Funds Reserved in Account 1 |
|
Monthly deposit | $2,778 |
Total after 9 months | $25,000 |
Can I change my elections?
The good news about split deposits is that you can change your payment elections anytime throughout the year. Changes will be reflected on your next payslip.
What are other benefits of split deposits?
Wages you set aside for the summer can accrue interest through a savings account, high yield savings account, money market account, or a certificate of deposit (CD) account. Also, the funds are held in personal accounts, giving greater access and flexibility to address unanticipated needs.
How do I set up a split direct deposit in Workday?
In Workday, go to “Payment Elections” from the Pay tab. Add two separate accounts. Then edit payment elections to enable split deposit from those accounts. You can find helpful guidelines in the Workday Instructional Guide here. Please complete payment election changes by the 15th of the month to be included in that month’s pay result.