1111 - University of North Carolina at Chapel Hill Policy on Student Employee FICA Exemption



This policy presents the federal guidelines by which the University will abide in determining which student employees are eligible for exemption from the FICA tax.

Internal Revenue Bulletin: 2005-2 contains excellent, detailed information for determining exemption eligibility.


All University of North Carolina at Chapel Hill student employees receiving compensation through Payroll Services.


Policy Statement

Under the Social Security Federal Insurance Contributions Act (FICA), as described by the Internal Revenue Service (IRS) and the Social Security Administration, students enrolled at UNC-Chapel Hill who receive payment for non-employment activities, including scholarships, fellowships, traineeships, or services as an independent contractor, are exempt from statutory FICA deductions.

In addition, student employees deemed as having a predominantly educational relationship with the school (prevailing over any relationship the student has as a University employee) and enrolled more than half-time in coursework, during the period being compensated are eligible for FICA exemption.

In making determinations on eligibility for FICA exemption, the University will utilize the federal "safe harbor" tests set forth in IRS Revenue Procedure 2005-11 in conjunction with consideration of the facts and circumstances surrounding the student's employment.

Payroll Services utilizes the ConnectCarolina Student Administration system to determine if a student is accurately classified. A "student" is defined by his/her eligibility according to the file generated from ConnectCarolina Student Administration system, which may vary from other definitions of a "student" for employment or other purposes.


Postdoctoral students, postdoctoral fellows, medical residents, medical interns, clinical fellows, residents and postdoctoral research associates are not exempt from FICA because services performed by these employees cannot be assumed to be for the purpose of pursuing a course of study.

Student employees who receive benefits are not eligible.

Related Requirements


Policy Contact
Subject Contact Telephone E-Mail
Student FICA Payroll Services 919-962-0047 payroll@unc.edu



  • May 15, 2020: Updated ConnectCarolina language
  • October 13, 2017: Updated main Payroll phone number.
  • May 1, 2015
  • September 8, 2009
  • May 29, 2007
  • May 26, 2005
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Article ID: 131384
Thu 4/8/21 9:07 PM
Wed 5/24/23 10:30 AM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Finance and Budget
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Director of Payroll Services
Next Review
Date on which the next document review is due.
04/14/2025 12:00 AM
Last Review
Date on which the most recent document review was completed.
04/10/2023 4:10 PM
Last Revised
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04/10/2023 4:10 PM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
01/09/2004 4:10 PM
Date on which the original version of this document was first made official.
01/09/2004 12:00 AM