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Texas Payroll/Personnel Resource

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Lump-Sum Payment of Accrued Vacation and Sick Time for Deceased Employees
Computation of the Applicable Hourly Rate

When computing a lump-sum payment to the estate of a deceased state employee, the applicable hourly rate is the employee’s rate of compensation on the date of death.

A state employee’s compensation includes:

  • Base pay.
  • Emoluments or stipends provided as a salary supplement.

Compensation does not include:

  • Longevity pay.
  • Hazardous duty pay.
  • Special items of compensation (such as housing, utilities, clothing and cleaning unless provided in lieu of base pay).

Deceased state employees who were not hourly employees immediately before their death must have their compensation expressed as an hourly rate.

The hourly rate of compensation for a particular month is calculated by dividing the rate of compensation by the standard number of working hours in a month.

As the standard number of working hours in a month varies from month to month, this should be considered when calculating the hourly rate of compensation.

Deceased state employees who worked fewer than 12 months but opted to be paid over a 12-month period must have an applicable hourly rate based on the amount of compensation earned each month the employee worked.

Sources

Texas Estates Code Section 453.004; 34 Texas Administrative Code Section 5.44; Texas Government Code, Section 661.031-.038; IRS Publication 15 (Circular E) PDF, Employee’s Tax Guide; IRS Publication 15-A PDF, Employer’s Supplemental Tax Guide.