The process for making an independent contractor payment to an individual who is providing a service to the University of Iowa and who is using a Social Security number (SSN) or an individual taxpayer identification number (ITIN) begins with creating a services voucher available through the Accounts Payable e-Voucher system in Employee Self-Service.
Paper payroll voucher forms continue to be accepted for the following types of payment requests:
- Payment to an individual who does not have or will not provide either a valid SSN or ITIN.
- Payment to an individual of $10,000 or more. A written professional services agreement should be used for individuals who are not university employees and who receive payments from the university in excess of $10,000 per project year. Please refer to the PSA policies and procedures on the Purchasing website.
- Payment to a non-U.S. citizen if all work was performed outside the United States and the individual did not come to the United States
Use the payroll voucher form when paying an individual who is using a Social Security number, is not employed by or associated with the University of Iowa, who may be working under a consultant or contractual agreement, or who is an independent contractor.
Generally, any person providing a service that is similar to services provided by employees on campus may need to be treated as a University of Iowa employee. In these cases, please refer to IRS Publication 1779 at www.irs.gov, or find more info about independent contractor payments.
See below for additional information about completing a payroll voucher.
Name must correspond with correct SSN. If the payee does not have a valid SSN, please indicate so. Do not use an employer identification number (EIN) on this form.
Full-time federal employee: May be restricted from consultant fee payments from federal funds.
Primarily a UI student or University of Iowa employee: Generally, students, current employees, and those employed in the previous calendar year are excluded from being paid as independent contractors (consultants) by the arms-length-transaction or continuing-relationship rules.
Relative of the project director: May constitute a conflict of interest. Please refer to Conflicts of Commitment and Interest, Policy Manual.
Please provide complete contact information.
If the payee is not a U.S. citizen, a resident of U.S. territories, or a resident alien for tax purposes, federal tax will be withheld. The payee in this case must complete the Foreign National Information System (FNIS) form. The department must provide Payroll with an email address for the visitor prior to their arrival. Payroll will send a questionnaire directly to the visitor to gather immigration information. Please be aware that failure to supply the recipient's e-mail address or failure to complete the questionnaire may delay the payment. Payroll will wait a maximum of two weeks for the questionnaire to be returned via email. If we do not receive a response, Payroll will withhold taxes at the maximum rates to ensure compliance with state and federal law.
Requirements affecting nonresident aliens coming to the United States to participate in academic activities when an honorarium may be awarded can vary. Usually these nonresidents come as Visiting B or visa waiver (VW) non-immigrant aliens. Rules determine whether or not payment is allowed. The criteria for payment are:
- The academic activity cannot last longer than nine days at any given institution.
- The nonresident has not accepted payment or reimbursement for expenses from more than five institutions or organizations in the previous six-month period.
For these individuals, a Compliance Statement (PDF) must be completed and included with the Payroll Voucher (pdf). Both forms are available on the Payroll website. If the individual refuses to sign the Form W-8Ben or won't submit one, a $50 fine will be charged to the department. Contact Xuefen Zhen at 319-353-2460 or Jenny Loeser at 319-335-0153 with questions about these rules.
Provide the dates of service for this payment and a specific, detailed description of service. (i.e. name and /or location of conference or project, type of service for honorarium, whom the payee spoke to, additional details regarding the consulting service provided, etc.)
Provide the complete MFK number to be charged. Payroll vouchers require an Institutional account in the 6000 series, excluding Travel IACT numbers 6025-6064. Indicate the gross amount of compensation to be paid.
Obtain two authorized signatures. Some departments and colleges may require additional signatures. For information about your specific signature approval requirements, please contact your HR unit rep.
Complete the Special Handling Instructions fields if necessary.
All paper payroll vouchers should be sent to Payroll Services, 120-30 USB for audit. After the audit is complete, vouchers will be forwarded to Accounts Payable, 202 PCO, for processing and payment. Payment status can be viewed online in Employee Self Service under the Administration/Data Access tab AP/PO Peoplesoft"=.