State and Local Income Tax

The University of Texas at Austin will withhold and remit state and local income taxes (SALT) from employee paychecks. These deductions are determined by the Primary Home and/or Work Addresses entered in to Workday for the employee. Employees who live and work in Texas will not have these deductions on their paychecks, since Texas does not have a state income tax. Addresses located outside of Texas may also prompt Family & Medical Leave deductions, dependent upon the state.

It is the responsibility of the employee and the hiring department to ensure address information entered in to Workday is current and accurate. If there are any changes to an employee’s home or physical work location, it is the responsibility of the employee to update their Workday account in a timely manner. Employees should regularly review their payslips and reach out to Tax Services if SALT deductions or taxable wages were included on their payment(s) in error.

Please direct any questions about SALT to tax@austin.utexas.edu. 

The University of Texas at Austin cannot provide tax advice; employees should consult with a tax professional for guidance on potential liabilities owed to the state(s) they live and/or work from.

State and Local Withholding Elections in Workday

When an employee or hiring department enters a Primary Home or Work address that is subject to SALT, Workday will prompt the Complete State and Local Withholding Elections task in Workday. The employee should complete this task so that SALT deductions from their paychecks will be calculated according to their preference. If this task is not completed, the tax will be calculated using the default rate for the state or the state-equivalent Form W-4 information set to the most conservative elections.

Occasionally, the Complete State and Local Withholding Elections task will be triggered in error for the employee to complete (for example, if the hiring department has entered the prospective employee’s address in another state, but they will be located in Texas when they begin working). To cancel this task, employees should follow these steps:

  1. In Workday, go to your Inbox
  2. Select the Complete State and Local Withholding Elections task
  3. Click on the gear icon in the upper right corner and select Cancel
  4. On the next page, enter a reason such as “Moved to Texas” in the box for comments
  5. Click Submit

Please note that employees will not be able to cancel this task until their hire date or later.

Updating Address Information in Workday

If an employee relocates or has an incorrect address listed in Workday, they should follow the steps below to update their address(es) in Workday:

  1. Log in to Workday
  2. Click on the Personal Information application
  3. Click on Contact information, located in the left panel
  4. Click the Edit button, located at the top left corner of screen
  5. To edit your existing Home Addresses, click the pencil icon to the right
  6. Please use the most appropriate Effective Date for the address.

If an employee is working remotely outside the state of Texas, they should add their “Alternate Work Location” in Workday via these steps:

  1. Scroll down to the Work Contact Information section
  2. Click the Add button, located under the Alternate Work Location section
  3. Checkmark the Use Primary Home Address box
  4. Update any other Contact Information as needed
  5. Click Submit to save your changes

There is also an option to add an "Additional Address" if an employee has alternate addresses they would like to keep on file with the University for specific usages. 

W-2 Form Reporting of SALT

SALT information (including the total amount deducted and taxable wages for the tax year) will be reported on the employee’s W-2 Form in Box 15 – 20. W-2 Forms are available for download in Workday, once they are issued by the IRS deadline of January 31st.

Out of Area Medical Coverage

Addresses located outside of Texas may result in medical coverage changes to an Out of Area Plan. Contact Human Resources for more information on how this change may impact your benefits and if you qualify for an exception.