Optional-twelve month payment plan

• News & Views

• Author By Payroll Office
• August 13, 2025

Salary deferrals for faculty

Tenured, probationary tenure-track, and non-tenure track faculty, faculty associates, and administrative/professional (A/P) employees at Illinois State University with an appointment of nine months through less than 12 months can elect to have their salary distributed evenly over a 12-month period. This can help you maintain a steady income throughout the year, including during the summer months when you're not on contract.

Eligibility requirements

To be eligible for the 12-month salary distribution plan, you must meet all of the following criteria:

• You must be a tenured, probationary tenure-track, non-tenure track, faculty associate, and administrative/professional (A/P) with a nine-month through less than 12-month appointment.

• Your annual salary cannot exceed $350,000. This limit is set by Section 401(a)(17) of the Internal Revenue Code for 2025.

• Your written election to defer your salary must be made before the start of your eligible appointment. This is a strict deadline, and no exceptions can be made once the eligible appointment begins.

• The election is irrevocable for the entire eligible appointment. You can't change your mind once the plan starts.

How the deferral works

The salary deferral plan works by distributing your total contract salary over twelve months beginning from the initial date of the contract. For example, if you have a nine-month contract and an annual salary of $90,000, your monthly payment will be $7,500 ($90,000/12).

Here is a simplified breakdown of the calculation:

• Your contract salary is multiplied by a liability factor to determine the amount you should be paid by the specified date, and compared to the amount actually paid to date to get your monthly earned amount.

• During your contract period, you will have a deferred balance. The difference between what you earn and what you are paid each month is deferred.

• This deferred balance is then paid out to you during the months you are not on contract.

Electing the plan

To enroll in the 12-month optional payment plan, you must submit a signed payment election authorization form to the University Payroll Office before the start date of your appointment.

You can submit the form in one of the following ways:

• Mail or deliver it in person to the University Payroll Office.

• Fax it to (309) 438-3357.

• Use the Dropbox for sensitive submissions.

Your election will remain in effect indefinitely until you revoke it. You can revoke your election at any time by submitting a signed revocation form, but the change will not take effect until the start date of your next eligible appointment.

In the case of retirement or termination, any outstanding deferred salary will be paid out as part of your final settlement.

Have any questions about your specific situation? Don't hesitate to reach out to the University Payroll Office for assistance.