Pay Plan: Frequently Asked Questions

The pay plan, which was originally included in the 2023‒25 State of Wisconsin budget process in July, 2023, provides a four percent pay increase for Universities of Wisconsin employees, retroactive to July 2, 2023 for eligible employees, as well as a two percent increase planned for July 2024.

Faculty, Academic Staff, University Staff, Limited Appointees, Research Associates, and Research Interns may be eligible for Pay Plan. Some employee categories, including Temporary Employees and student hourly employees, are not eligible.

To be eligible to receive the pay increase, individuals must have been employed in their current positions on July 2, 2023. Employees must also have met performance expectations as identified in their last performance evaluation. Supervisors are required to complete performance evaluations for the employees they supervise. Additional criteria may apply at the divisional level.

Due to the retroactive nature of the pay increase, nine-month appointees and employees who had changes in employment after July 2, 2023, may have different eligibility criteria. These special eligibility criteria are detailed in the FAQs below.

Employees who are eligible for the 2023‒24 pay plan increase will see the increase on their earnings statement dated January 11, 2024. This earnings statement will also include back pay to July 2, 2023, for annual and hourly paid employees or August 21, 2023, for 9-month employees, paid as a lump sum, for hours worked in an eligible position.

Your actual earnings will be prorated to your percentage of full-time employment.

Employees who are eligible to receive the pay plan increase will receive a written communication confirming their new pay rate.

For employees paid on an academic year basis (“C Basis”), the new pay rate is calculated from your appointment at the beginning of the 2023‒24 academic contract.

Summer pay rates cannot be modified and retroactive payments will not apply to summer appointments. You will still receive a pay rate increase and back pay (lump sum) on your nine-month, academic-year contract.

You will receive back pay, paid as a lump sum, from the effective date, up to the date of your transfer to a new position. You will not receive a pay rate increase for the new position.

You will receive back pay, paid as a lump sum, based on your pay rate as of the pay plan effective date. Your back pay will not be recalculated to account for any increases or decreases in your base pay that occurred after the effective date.

You will also receive a pay rate increase based on your pay rate as of the effective date.

Please consult with the human resources office in your school, college, or division if you would like to better understand these calculations.

No. You will not receive a lump sum for back pay and you will not receive a pay rate increase for 2023‒24. New employees may be eligible for a future increase approved as part of the 2023‒25 pay plan package.

No. You will not receive a lump sum for back pay if your employment was terminated after the effective date.

If an employee retired or died after the pay plan effective date, back pay will be paid, as a lump sum, from the effective date of up to the date of retirement or death. For those that died, payments will be issued the week of December 25, 2023. Payments to those that have retired will be processed for payment on January 11, 2024.

Each appointment will be treated independently and calculated accordingly. If you have multiple appointments, you will receive multiple written notifications of any pay plan increases for which you are eligible.

Employees in the building trades are subject to a collective bargaining agreement and are not eligible for pay plan. Pay raises for trades employees, as part of the Tentative Collective Bargaining Agreements, were also approved by JCOER on December 19, 2023. The full state legislature and the governor need to approve the collective bargaining agreements before the pay increases can be implemented.

For Wisconsin Retirement System (WRS) purposes, wages in your lump sum payment will be allocated to the year in which the earnings would have been paid if they had been paid on the effective date.

For employees in the WRS General category (University Staff employees) the wages will be reported in calendar year 2023. For employees in the WRS Teacher category (Faculty, Academic Staff, Limited Appointees) the wages will be reported in fiscal year 2024 (July 1, 2023‒June 30, 2024).

Wages are taxable when they are paid. UW‒Madison does not provide tax advice. We recommend talking with your tax advisor if you have questions regarding any impact on your taxes.

For federal withholding, the lump sum payment is considered supplemental wages and is taxed differently than regular wages. UW‒Madison does not provide tax advice. We recommend talking with your tax advisor if you have further questions regarding any impact on your taxes.

The additional earnings from the lump sum payment for back pay increase the taxable wage base, which is used to determine both federal and state tax withholding. The annual withholding tables are defined in publication 15 and WI DOR Publication 166. In addition to increasing the taxable wage base, supplemental wages (pay plan lump sum payment) are required to be withheld at the supplemental tax rate calculation. The Universities of Wisconsin withholds tax on supplemental wages using the aggregate percentage method if the employee is receiving additional regular wages being taxed at the regular rate in addition to the supplemental tax rate. Employees can review their tax withholding on future paychecks by reviewing the IRS tax estimator and adjust their W-4 in self-service at any time. UW‒Madison does not provide tax advice. We recommend talking with your tax advisor if you have further questions regarding any impact on your taxes.

Employees can do a tax check and review their tax withholding for future paychecks by reviewing the IRS tax estimator and adjust their W-4 in self-service at any time. UW‒Madison does not provide tax advice. We recommend talking with your tax advisor if you have further questions regarding any impact on your taxes.

Eligible employees may receive pay plan up to 10% over the maximum of their pay range, based on their base rate of pay (not prorated by FTE or percent appointment). Amounts above that maximum will be paid in a lump sum.

Payments for 12-month, full-time employees will be calculated by multiplying the hourly amount determined to be appropriate for the employee by 2080 hours. The 2080 hours are calculated based on the 26 full pay periods paid in the fiscal year. Payments will be prorated based on full-time equivalency (FTE).

Eligible employees may receive pay plan up to 10% over the maximum of their pay range, based on their base rate of pay (not prorated by FTE or percent appointment). Amounts above that maximum will be paid in a lump sum.

Payments for 12-month, full-time employees will be calculated by multiplying the hourly amount determined to be appropriate for the employee by 2080 hours. The 2080 hours are calculated based on the 26 full pay periods paid in the fiscal year. Payments will be prorated based on full-time equivalency (FTE).