The salary cap amount for each half year is calculated as follows:
CAP = $181,500
NOTE: There will be a second federal cap applicable to the effort report due to federal legislation raising the cap maximum from $179,700, and it will affect effort reporting beginning on the 7/14 report. We will have more information on that in the near future. Thank you.
January – June = 181 days (182 if leap year)
July – December = 184 days
$181,500/365 days = $497.26/day
$497.26/day x 184 = $91,495.84 (salary cap amt. for 6 month period July – Dec.)
$497.26/day x 181 = $90,004.06 (salary cap amt. for 6 month period January – June)
Individuals with 1 FTE, which is the majority, will have the difference between the cap paid amount, and what should have paid calculated as follows:
$142,695.48 = ~ ½ of total base of $285,391 (4 cent difference due to HCM systemic rounding). This is the amount used to calculate the cost share portion in the system.
$142,695.48 x 3.49% adjusted pay = $498,007.23/$100,670.08 (salary cap maximum amount of pay)
= 4.946% (4.95% rounded).
4.95% - 3.49% = 1.46%
1.46% is, then, the minimum effort adjustment needed. Obviously, this can be more depending on amount of effort actually committed. (E.g., 5% was actual vs. 4.95%)
Should there be an occurrence of an individual less than 1.0 FTE, the system calculates what their salary would be at 1.0 in order to be able to ascertain this adjustment. For example:
Annual Base Salary = $200,000
FTE = 0.75
Salary Cap = $181,500
Amount of actual pay against salary cap in system = 10%
$200,000/.75 = $266,667 (Adjusted amount salary would be if 1.0 FTE)
$266,667*.10 (% paid in system) = 26,667/$181,500 (salary cap) = .1469 or 14.69%
14.69%-10% = 4.69%
4.69% is, then, the minimum effort adjustment needed. Again, this can be more depending on amount of effort actually committed.