CASH FLOW CALCULATOR TOOL This tool has been designed to demonstrate the estimated effect to cash flow due to the change in pay schedule for Academic Year (AY) Faculty and Staff. Its purpose is twofold: 1) To illustrate changes to cash flow based upon user input of key factors, 2) To assist the user in estimating the amount of savings necessary to sustain desired cash flow during non‐pay or partial pay months. This tool will assist in estimating Net Pay and Savings scenarios; results will vary depending upon individual estimates of tax burdens and deductions. All results derived from using this calculator are strictly estimates; actual net payments received by individuals will vary. INSTRUCTIONS FOR USE OF CASH FLOW CALCULATOR: STEP 1: Enter your AY Salary Enter the annual salary amount; this must be the annual salary amount, not the monthly rate of pay. This would be the annual salary rate (also referred to as FTE salary rate) multiplied by the percent time employed. STEP 2: Enter Tax/Deduction % Enter the anticipated total percentage (%) that will be deducted from gross pay for tax withholdings, retirement deferral deductions, insurance premiums, and other miscellaneous deductions. A base percentage to consider using might be 37%; this would include approximations for taxes and retirement. This is only an estimated number, keep in mind that each personal situation will vary and may include any of the following items. Most individuals will have deductions for the following taxes: Social Security (6.2%), Medicare (1.45%), Federal (20%), and State (4.35%). Most individuals will also have retirement deductions for Mandatory Base (5%); others may have supplemental retirement deductions as well. In addition, an individual may or may not have additional deductions for other items such as DCSA (Dependent Care Spending Account), HCSA (Health Care Spending Account), Insurances (Medical, Dental, Life, Long Term Care, Accident, Vision), Parking Fees, Charitable Contributions (United Way, Development Fund), Dues, Court‐Ordered Deductions or Tax Levies. STEP 3: Enter Desired Savings Enter the dollar value of desired savings; this is the total amount needed to sustain desired cash flow during non‐pay and partial pay months. This amount will vary according to each individual’s personal situation and needs. If a steady cash flow over the 12 month period is desired, then a general rule of thumb is to set aside 25% of Net Pay from the full pay months (September‐April). Total Desired Savings = Net Pay x 25% x 8 Full Pays. STEP 4: Analyze Results Review results obtained based upon user input of key factors. Determine actions to take based upon results. Actions may include: change to key factors, set up of savings plan, etc. CASH FLOW CALCULATOR Savings Step 1 Step 2 Withdrawal Enter Tax/ Schedule Enter Your *see note MAY AY Salary Deduction % JUNE JULY AUGUST Step 3 Savings should approximate amount desired to sustain cash flow for Enter Desired months without full pay (May,June,July,Aug). A general rule of thumb Savings is to set aside 25% of Net Pay from full pay months (Sept - April). Total Desired Savings = Net Pay x 25% x 8 pays Estimated Cash Flow Based Upon Entries Calendar Payroll Date Estimated Estimated Estimated Savings Estimated Savings Total Estimated Year actual pay date is GROSS Pay Taxes and NET PAY Deposit NET PAY Withdrawal CASH received dependent upon last (includes August Other (from which (amount being (after desired (from personal by Employee working day of of following Deductions* desired savings set aside for savings savings plan or for Pay Period month. contract year) is drawn) later use) deducted) MSUFCU plan) 2010 Aug/31 Sep/30 Oct/31 Nov/30 Dec/31 2011 Jan/31 Feb/28 Mar/31 Apr/30 May/31 Jun/30 Jul/31 Aug/31 *NOTE: A base assumption of 37% would approximate taxes and base retirement (Social Security 6.2%, Medicare 1.45%, Federal 20%, State 4.35%, Retirement 5%). Employee should factor in any other appropriate deductions such as: Supplemental Retirement, Health Insurance Premiums, etc. This calculator is provided to assist in estimating Net Pay and Saving scenarios. The results will vary depending on your individual estimates of tax burdens and deductions. The CASH received by an employee is ONLY an estimate; ACTUAL net payments will vary by individual.
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