Policy: 101.B-Payments for Personal Services
Date: 02/23/04

Statement of Policy:

UW-System Financial Policy and Procedure Paper #31 (FPPP #31) provides guidance for determining whether payments for personal services should be made through payroll, purchasing, or PIR processes. The issues addressed in FPPP #31 are complex, and departments are encouraged to work through Dean/Director's Offices to apply the policies and procedures provided in the document to specific cases.

One essential factor in determining the method of payment is whether or not an employer-employee relationship exists. FPPP #31 Attachment 1 provides a flowchart to assist in determining the appropriate method of payment. Appendix 2 summarizes UW-Madison interpretations of policies for compliance with FPPP #31. For further assistance in determining if an employer-employee relationship exists, contact Academic Personnel Office at 262-3511. To determine if purchasing regulations apply or for help in executing an Academic Support Services Agreement, contact Purchasing Services at 262-5936. For assistance in processing PIRs or requisitions, contact your Dean/Director's office.

The IRS routinely audits payments to independent contractors and assesses substantial penalties for payments which should have been payrolled but were not. In case of IRS penalty, departments or divisions may incur financial liabilities.

Effective January 1, 2010, UW-Madison requires that a completed and signed form W-9 (or W-8BEN for NonResident Aliens) be attached to all tax reportable payments requested on Payment to Individual Reports (PIR) and Direct Payments (DP), but not for payments made through PO’s and ASSO. For PO’s and ASSO, Business Services' Purchasing and Accounting Departments will be working together on obtaining appropriate W-9 information as part of the contracting processes. Tax reportable payment account codes are posted on the Accounting Services web page at (http://www.bussvc.wisc.edu/acct/tax/1099tax.pdf). See Implementation of W-9 Compliance Letter at (http://www.bussvc.wisc.edu/acct/tax/W9IMPLEMENTATION_COMPLIANCE2009.doc).

Related Policy/Procedure:

Who should know this policy?

Deans, Directors, and Staff who prepare payments

Related Documents:


E-mail uwtravel@bussvc.wisc.edu with questions.

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