Cash Advance Program

 

The Cash Advance Option Form is no longer available as of June 1, 2012.

If you have selected to receive a cash advance, you will receive the advance payment on the July 25, 2012 pay deposit/cheque. Repayment of the cash advance will begin on August 24, 2012.

An alternative paper-based enrollment process will only be available to specific types of employees as defined by Human Resource Services.

 

Semi-Monthly Pay Cycle Cash Advance Program Guidelines

To assist monthly paid employees, graduate students and postdoctoral fellows with the transition to a semi-monthly pay cycle, the University is offering an optional one-time cash advance to help offset any financial challenges individuals may face in the first month of the semi-monthly pay cycle.

In July 2012, monthly paid individuals moving to semi-monthly pay will only receive one pay deposit/cheque in July on July 25, 2012. The payment amount will be for 1/2 of July's monthly salary or fellowships plus any monthly scholarship payments. Payment for the period July 16-31 will be paid on August 10 rather than in July. Because staff will only take home approximately ½ their July salary in July 2012, a financial hardship may be experienced by some.

Eligible individuals will be able to select a one-time cash advance in any amount up to 70% of their July 1, 2012 semi-monthly base salary or fellowship payment. Base salary does not include scholarships, overtime, responsibility pay, shift differential, one-time payments or other supplements. The cash advance will be paid on July 25, 2012 and must be repaid in equal installments over a maximum of 24 pay periods or to the end of your appointment. The cash advance will only be available upon request and is offered only to those eligible below.

Other conditions of eligibility, advance amounts and repayment terms are defined below.

NOTE: These guidelines are subject to change until the formal option period opens to eligible individuals on April 1, 2012. Please ensure you return to this section to view the most up-to-date information about the Semi-Monthly Pay Cycle Cash Advance Program.


ELIGIBILITY CRITERIA

Who is Eligible?

  1. The one-time cash advance is available to monthly paid salaried employees, graduate students and postdoctoral fellows who are moving to the semi-monthly pay cycle. This includes:
    1. NASA staff in regular continuing appointments, recurring term appointments, auxiliary monthly appointments starting before July 1 and not ending before August 15.
    2. Graduate students with monthly paid graduate assistant, research assistant, teaching assistant and trust (TAP A & TAP B) appointments starting before July 1 and not ending before August 15.
    3. Postdoctoral fellows with fellowships starting before July 1 and not ending before August 15.
  2. Employees must be continuously employed for the month of July with their appointment ending no earlier than August 15.
  3. Employees with concurrent appointments are eligible for the advance only on the base salary of the eligible appointment.
  4. Postdoctoral fellows are eligible for the advance on the July 1 semi-monthly fellowship amount.
  5. Graduate students are eligible for the advance on the July 1 semi-monthly stipend (salary and award) amount.

 Who is Not Eligible?

  1. Employees or students that are paid hourly on the biweekly cycle before or during the July implementation period. These employees will receive the final biweekly payment for the period June 17-30 on July 10, 2012.
  2. Employees, graduate students and postdoctoral fellows commencing appointments on or after July 1, 2012.

The cash advance is only available upon request.


CASH ADVANCE PAYMENT

Eligible persons may choose the one-time cash advance in any amount up to 70% of their July 1, 2012 semi-monthly base salary, stipend or fellowship. The semi-monthly base salary is the monthly salary, stipend or fellowship rate divided by two. Base salary does not include scholarships, overtime, responsibility pay, shift differential, one-time payments or other supplements. For graduate students, the stipend amout is the sum of the monthly salary and award. The amount of the advance will be paid as an amount and rounded up to the nearest dollar.

If the employee, graduate student or postdoctoral fellow has a concurrent appointment in a non-eligible appointment type, the advance shall be based only on the semi-monthly base salary, stipend or fellowship of the eligible appointment.

The gross amount of the cash advance will be paid on the July 25, 2012 pay cheque or deposit. The cash advance will be identified as a separate earning and will not be subject to income tax, CPP, EI or other benefit deductions.

Example, an employee with a $4,000 monthly base salary elects to take a 60% cash advance:

Gross semi-monthly salary =   $2,000 ($4,000/2)
$2,000 x 60%=  $1,200 (amount of cash advance)

 
The cash advance will be paid from a central University account and will not affect the budgets of individual departments or trust holder accounts.


MAKING THE CHOICE

The one-time cash advance offer will be available between April 1 and June 1, 2012. The advance is only available to those eligible as defined above and must be elected during the enrollment period. The amount of the advance will be chosen using a personalized electronic form that will validate the amount of the advance against the amount of the person’s July 1 semi-monthly base pay, stipend or fellowship. The form will allow the individual to revise their choice for the amount of the advance and the term of the payback period throughout the enrollment period. The offer will no longer be available after the enrollment period ends on June 1, 2012.

An alternative paper-based enrollment process will only be available to specific types of employees as defined by Human Resource Services.

Eligible participants will be notified when the enrollment period opens on April 1, 2012 and will be provided with instructions on how to access the options form.


REPAYMENT PERIOD

The cash advance is similar to a short-term loan and must be repaid through payroll deduction in equal installments. Individuals choosing the advance will be allowed to choose a payback period not exceeding 24 pay periods or the end of their term of employment or fellowship as known on June 1, 2012, whichever is less. Graduate students, auxillary employees or postdoctoral fellows with appointments ending are encouraged to contact their departments to see if appointment extensions can be made before the enrollment period ceases.

The repayment period must be chosen by June 1 using the personalized electronic form and cannot be changed after that date. Once the repayment period begins, no changes may be made except to completely pay off any outstanding balance.

The repayment of the advance will begin on the August 24, 2012 pay date.

In the event that the individual ends employment or has a change in employment status to an ineligible appointment, any outstanding advance amount will be recovered on the last pay cheque. If there are insufficient funds on the last pay cheque, Payroll, at its discretion, may attempt to recover the advance from the final two pay cheques. If that option is not available, Payroll will require payment of the outstanding balance within 30 days by cheque, credit card or direct payment.

Employees starting an unpaid leave of absence during the repayment period must make alternate arrangements with Payroll to continue repayment by other methods while on leave.

Payroll will have the right to collect any outstanding advances after the closure of the repayment period.


OTHER INFORMATION ABOUT THE CASH ADVANCE

From a payroll and tax perspective, the one-time cash advance payment made on July 25 is considered an interest-free loan rather than a payroll advance. The cash advance is not the payment of actual earnings before the pay date but rather a short-term loan to help eligible participants adjust to the negative impact of only receiving one pay cheque/deposit in the month of July 2012. As a short-term loan, the amount advanced is repayable back to the University over an agreed upon length of time and the recipient must be assessed a taxable benefit on the value of the interest collectable on the loan.

While the recipient will not directly pay interest on the cash advance, the Canada Revenue Agency (CRA) does require that the University assess a taxable benefit for the amount of interest that would be charged on the interest-free loan. The interest taxable benefit will be charged using the CRA’s prescribed interest rate which is currently 1%. While the cash advance will be added to gross pay, it will not be taxed as income and therefore not reported on T4 slips next year.  Recipients will be assessed a taxable benefit for any interest collectable from the advance and that will be reported on the 2012 and/or 2013 tax slips.

 

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The Cash Advance Option Form is no longer available as of June 1, 2012. 

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Net Pay & Advance Calculator (Postdoctoral Fellows)

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