SAP, Flex Dollars and Your Paycheck

You may have recently noticed your paycheck looks a little different. With the conversion to SAP the full bi-weekly flex allotment now shows up as income on your paycheck, and the biweekly cost of your benefits are also shown as deductions. These deductions will be in a pre-tax form thus negating the flex allotment and will not affect your net income. A very small group of employees may also see some post-tax deductions, which generally involves domestic partners.

Some members have expressed concern that the new way of showing the flex allotment will cause a tax complication. The only way this would become an issue is if your pre-tax flex deductions were less than your allotment. This would occur if you put any money into the cash-out option during open enrollment. Cash-out option funds have, and will always be taxed since the IRS deems this as taxable income. This also means that if you took the cash-out option, you will no longer get two large payouts. Instead, the City will provide you with smaller payouts on a bi-weekly basis.

If you feel there is an error in your paycheck or with any deduction, please immediately contact your payroll specialist. If you have additional questions or comments on the new SAP conversion, please email MEA at info@sdmea.org.