July pay increases affect more than base pay, provide opportunity to review or adjust benefits


For the 2022-23 fiscal year, the salary tier for medical benefit premiums will be increased from $46,900 to $48,800, which is a 4% increase to match the merit pay distribution amount. 

This means employees who will have annual base pay below $48,800 after pay increases will pay the lower tier premiums, and those above the tier will pay the higher tier premiums for their medical insurance. Throughout the year, if an employee enrolled in a Purdue medical plan crosses above the salary tier, an increase in premium will take effect at the time of the pay increase.

Employees paid biweekly will see a partial effect in their July 13, 2022, pay and the full effect of their increase in their July 27, 2022, pay. Employees paid monthly will see the effect of their merit increase in the July 29, 2022, pay. 


Merit increases offer a good opportunity for employees to consider making adjustments to benefits like voluntary retirement savings or health savings accounts.

Simply increasing retirement contributions by as little as 1% can make a big difference to an employee’s retirement savings and decrease current tax withholding. Pay increases also result in increased retirement contributions from the University.

To make changes to voluntary retirement contributions, employees can log in to Fidelity, call 800-343-0860 or schedule a one-on-one, virtual appointment with a Fidelity retirement planner. To schedule a one-on-one, virtual appointment, call 800-642-7131 or schedule online.

Additional benefit and insurance programs affected by merit increase

Pay increases affect other benefits and insurance programs through both the value of coverage and benefit premium deductions. 

As an example, an employee’s higher earning years are factored into their Social Security benefit, leading to an increased benefit payment when the time comes to draw from Social Security benefits. Higher earnings also increase the value of benefits through basic and additional life insurancelong-term disability and short-term disability programs. These programs are based on salary-driven rates. So the value of the benefits increase when pay raises occur, along with slight increases to the premiums deducted.

With the basic term life insurance amount the University provides employees, imputed income amounts may also increase. Employees have the option to limit their basic coverage to $50,000 to avoid imputed income expense, which can be adjusted through Benefitfocus on the OneCampus portal. If an employee chooses to limit to the $50,000 benefit level and later wants to increase the level, a medical review process to prove insurability will be required. 

Questions about benefit-related items can be directed to Human Resources at 765-494-2222 or hr@purdue.edu

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