Statewide Payroll Policy



This document identifies the established policies and procedures as determined by the state controller involving the state payroll system and how state employees will receive compensation.

Advanced Payments

The State of Idaho does not and will not issue advance payment for wages to any employee, for any reason. 

Direct Deposit

The Idaho State Controller has mandated the use of direct deposit for all employees paid via the SCO payroll system. Link to Direct Deposit Policy

Direct Deposit has been determined to be the fastest, most efficient, and safest method used to receive compensation.

Fastest: Ensures employees receive pay on payday.
Efficient: Saves tax dollars by not creating and mailing paper warrants.
Safest: In case of disaster, employees will still receive pay on payday.

The use of this feature allows employees to have their net pay automatically deposited into the financial institution(s) of their choice. The SCO payroll system will allow the employee to deposit their pay into as many as 4 accounts (2 checking and 2 savings accounts). In addition, this feature has been made available to the employees via 'self-service' on the SCO Web site. 

The settlement date for direct deposit is payday. The individual financial institution controls what time the information is applied to their customer's accounts on payday. However, employees with direct deposit should have access to their funds after opening for business on payday. If a chosen financial institution does not grant the employee access to their pay after opening for business on the Friday payday, please contact the State Controller's Office immediately.

Note:  Once payroll has processed, all direct deposit information is sent electronically to the state controller's originating financial institution. Once the information has been sent, the SCO payroll staff can no longer cancel any direct deposits for that payroll. 

Early Redemption of Payroll Warrants (Checks)

The difference between a payroll warrant and a payroll check is as follows:

Warrant: An order drawn by a legislative body or governmental unit authorizing the payment of a sum of money to the person named or the bearer. A warrant is a negotiable instrument that contains a promise to pay when the state has funds available for such payment, but not before.
Check: A check is a negotiable instrument that contains an immediate promise to pay and may be payable on demand.

The State Treasurer does not set aside funds to cover payroll warrants until payday (warrant date). Therefore, warrants presented to a financial institution before that date will not be honored by the State Treasurer and funds will not be deposited. In these situations, the employee will be responsible for any fees charged by the financial institution due to the early redemption of a payroll warrant.

Note:  Employees that repeatedly redeem warrants early will cause warrant delivery schedule restrictions to be placed on the respective agency. 

Employees Performing Services Outside of the State of Idaho

The State of Idaho has no legal obligation to withhold taxes and remit them to another state.  However, DSP will continue to report income to and withhold taxes for the state of Oregon and Washington as a matter of comity, not because of any legal requirement.

All employees who perform services outside of the State of Idaho, Oregon or Washington will be individually responsible for ensuring that their income is reported correctly and taxes are remitted to the state they are working in. 

Lag Time

Idaho Code 59-503 also states that the state controller 'shall insure that payment is made on or before the end of the pay period following the pay period for which salaries are due'. Therefore, all state employees are subject to a 'lag time' of two weeks between time earned and actual payment. As a result, they will receive their pay on the Friday of week 2 for the prior pay period.
New employees will receive pay for their first pay period worked 13 days after the end of that pay period. All wages received thereafter will be for time worked two weeks prior to the current pay period.
Employees terminating employment with the state will receive their final pay 13 days after the pay period that includes the separation date.

Example:  (Pay period begin date = Sun, June 1 and end date = Sat, June 14)  The employee begins working on Mon, June 9th.  With 'lag time', the employee will receive pay for hours worked June 9th through June 14th on payday Friday, June 27th.  Calendars

Note: In July, 1989 the Department of Labor determined that the State of Idaho was exempt from Idaho Code 45-606 section that states,
'if an employee makes written request upon the employer for earlier payment of wages, all wages then due the employee shall be paid within forty-eight (48) hours'

The Department of Labor granted the exception based upon the section in Idaho Code that gives specific statutory authority to the State Controller authorizing payment of the bi-weekly payroll by the end of the following pay period.

Lost Payroll Warrants

The State assumes no responsibility for the delay in receiving a paper warrant (check) via the United States mail or its equivalent.  If the employee has not received his/her paper warrant (check) within seven business days after the pay date, a replacement warrant (check) may be requested.  Any reissued warrants (checks) will be mailed within two business days of receipt of a Certification and Request for Warrant Cancellation attesting to the loss.

Replacement of a lost or stolen payroll warrant requires the following actions:

  • Employee signs a Certification and Request for Warrant Cancellation
  • If after seven business days from the specific pay date, the employee has not received pay, the agency payroll staff sends original certification to SCO for replacement
  • Upon receipt of the original certification, DSP staff processes a replacement warrant (check) and mails it to the employee's address on file within two business days

    Note:  Once the certification has been forwarded to the SCO, if the original payroll warrant (check) is recovered/found, it must be returned to the State Controller's Office for cancellation. Legal action will be taken should the original payroll warrant be endorsed and redeemed by the employee.

Mailing/Delivery of Payroll Warrants

The State, as the employer, is only required to mail/distribute payroll warrants to the employee on Friday payday. Since the state has no control over delivery services, delays could be experienced.

Note:  In the event of an extended delay, the State Controller's Office will implement procedures as described in the Payroll Disruption section of this policy. 

Net Pay Stub

The employing agency is required to provide their employees with a statement of earnings.  This information may be provided via a printed report (Net Pay Stub) or accessed by the employee via the 'Online Pay Stub' application.

Note:  Employing agencies must provide those employees who have opted not to participate or are not eligible to participate in the online pay stub feature with a paper copy of their Net Pay Stub information. Link to more information on the Net Pay Stub report.     

Online Pay Stub

The State Controller's Office continues to offer the convenience of online pay stubs. This feature, like direct deposit, is another way of creating efficiencies in state government. Therefore, employees may view their pay stubs online and eliminate creating a paper pay stub. 


Idaho Code 59-503 states, 'the State Controller may prescribe pay periods different from a monthly pay period'. The method chosen is 'Biweekly'. The biweekly pay period set by the State Controller is from Sunday (12:00 am) of week 1 through Saturday (11:59 pm) of week 2.  Calendars

All payroll warrants and direct deposits are negotiable on payday.

Payday on Holiday

If the scheduled Friday payday falls on a State of Idaho holiday, the funds will be distributed on the preceding Thursday.     

Payroll Disruption (Disaster Recovery Plan)

The SCO, Division of Statewide Payroll (DSP) has established a 'Disaster Recovery Plan'. Should the payroll processing be disrupted by extreme computer failure or a disaster occurs (fire, sabotage, etc.), DSP will implement the plan in an attempt to minimize the effect the disaster will have upon on-going operations.

System data backups are performed daily/weekly and kept at an off site facility operated by the Department of Administration (Bureau of State Records).

In the case of responding to a severe disaster, DSP will move day to day operations to a backup facility. From this off site facility, system data backups will be brought to the new off site location and operations will resume.

Occurrences of a less severe nature are controlled at the appropriate management level as part of the total plan. 

Reversing a direct deposit for voided payments

DSP cannot stop an original direct deposit from being sent to an employee's account once the payroll has processed. However, DSP does have the ability to reverse direct deposits for void purposes only.

This process would allow DSP staff to retrieve money back from an employee's bank account after the original direct deposit was sent with payroll (without requiring the employee to write a personal check for the wages paid in error.)

The reversal process works in the following manner:

  • Once the payroll has processed, the direct deposit file is created and sent to Automated Clearing House (ACH) for deposit into employee's designated account(s).
  • When necessary, DSP is able to send a reversal file to the employee's financial institution and reverse the direct deposit. This process can only be used up to two (2) working days prior to payday. After this deadline, DSP staff members are unable to process the automatic reversal. An IPOPS MVA must be submitted and the employee must write a personal check for the full amount of the net pay paid in error.To request the use of this process, the paying agency must notify DSP and the employee in writing (an e-mail or fax will be accepted) by 11:00 am, two (2) days prior to payday. (Employee notification is required per ACH Rule Subsection 2.5.1)
  • The financial institution does have the option to reject any reversal transaction. Therefore, the paying agency should make sure the employee has been notified as to how the reverse direct deposit process works and to watch their account closely.
  • Once the reversal file has been sent, the employee's account will show a direct deposit amount being deposited and a reversal direct deposit amount being withdrawn. The financial institution will decide what processing order and/or method the deposit and reversal show in the employee's account.

Note:  Should the employee's account be overspent at any time during this process, it is the responsibility of the employee to satisfy any fees associated. 

Separation/Termination Pay 

An employee who is separated/terminated (voluntarily or involuntarily) will receive final pay for all hours submitted, pay off for all vacation hours remaining, and pay off for comp time hours remaining (if applicable) after all statutory obligations have been deducted. Statutory obligations include (not limited to) insurance, retirement contributions, etc.

Employee will receive their final payroll warrant on the regularly prescribed payday for that pay period. (Two weeks after the pay period in which the separation/termination date occurs)

It is the responsibility of the employee to make suitable arrangements with any financial institutions or vendors should the final pay amount not meet the employee's obligations. (i.e. direct deposit and voluntary deductions)

For the employing agency to retrieve monies owed to the state outside of the regular payroll deductions via that payroll process, the agency must first contact the Division of Statewide Payroll.  These situations will be evaluated on a case by case basis and must be approved by DSP prior to making an agreement with the employee.  Some situations, such as settlements, may require the employing agency to seek legal guidance from their Deputy Attorney General or internal legal counsel.  

State Employees also appointed to Part-time Boards or Commissions

Employees (including university and elected officials) receiving a salary from the State of Idaho are not eligible to also receive either compensation or an honorarium as a part-time board/commission member.

However, these part-time board/commission members are eligible for reimbursement of all vouchered expenses paid through the Division of Statewide Accounting system (STARS) for the part-time board/commission position.  

Note:  Part-time board/commission members who are or become an active State of Idaho employee for another state agency should not be entered into IPOPS or appear as an active      state employee in the part-time board/commission position for payroll purposes.   


  1. An individual appointed to multiple part-time boards or commissions and no additional employment with the State of Idaho is authorized to receive compensation or honorarium from all part-time boards and commissions.
  2. A Legislator filling a legislative position on a state part-time board or commission is authorized to receive compensation or honorarium from the part-time board or commission in addition to his/her legislative pay.  (As referred to in the Citizen's Committee on Legislative Compensation letter dated June 6, 2016) 

Time Sheet Accuracy and Certification

Idaho Code 67-2012 directs the State Controller's Office to process payroll information and create payment to agency employees only after receiving authorization (voucher) from the agency director, thus ensuring accuracy of the information. The agency I-time CPO has been empowered by the head of the agency to submit such authorization (voucher) on his/her behalf. Therefore, the ultimate certification of accuracy comes from the CPO when time is being submitted for payroll processing.

In addition, I-Time enhancements have helped lessen erroneous information being submitted by shifting some of the burden of certifying accuracy down to the supervisor and employee level. (Example: Statement on each I-Time time sheet, 'I hereby certify the information provided herein is true and accurate to the best of my knowledge.') 

Note:  All hours worked must be coded on the time sheet correctly and on the calendar day in which they are worked.   

Transfers Between Agencies

Employees who transfer between state agencies without a break in service will have their vacation and sick balances transferred to their new agency.

A break in service (according to the Division of Human Resources (DHR) and Statewide Policies) is one day, not including Saturday and Sunday.

Note:  For exceptions such as employees with a work schedule other than Monday through Friday, please contact the Division of Human Resources.

The following examples are for employees working a Monday thru Friday schedule.

  • If the employee terminated on Tuesday and was rehired Thursday, this would be a one day break in service.

  • If the employee terminated on Friday and was rehired on Monday, there is no break in service.

    Note:  Employees transferring between state agencies must re-establish all voluntary deductions at the new agency as well as direct deposit. 

Void Payroll Warrants / Create Manual Checks  

When it has been determined that an employee has been paid incorrectly, the original payment must be voided and a manual check issued for the proper amount of pay due the employee for that pay period.

Idaho Code 59-503 requires that "all payments of salaries are to be made on or before the end of the pay period following the end of the pay period for which salaries are due." Therefore, all salary payments made in error to employees should be corrected immediately. These incorrect salary payments are not to be allowed to linger at the employing agency for extended periods of time.

Unless a prior arrangement has been established, all personal checks required to void an incorrect payment may be deposited by DSP on the same day it is received.

The manual check, void check and adjustment information will be posted to the database when the action is processed through payroll.

DSP staff is able to retrieve the incorrect payroll warrant (check) up to two business days prior to payday.  If notification is received later, the warrant (check) will be mailed.  Therefore, the employing agency must notify the employee to return the warrant (check) once it has been received.

No Partial Payment of Wages: 

DSP will not create a manual check for partial payment of wages due the employee. It is important to remember that the employee's involuntary tax withholding liability must be accurate and complete documentation is required to guarantee an audit trail exists.  Should the employee be in possession of the funds via cashing of the original payroll warrant (check) or direct deposit, DSP will provide the employing agency with recovery instructions necessary to retrieve the original pay amount.

Note:  A partial manual check will be accepted in two circumstances:

    1. To pay monies still owed to an employee no longer employed with the agency
    2. When payroll wages should have been paid to the employee in a prior calendar year - (issue of constructive receipt)

Year End Pay Period (Taxing Information)

Federal law requires wages to be taxed at the time of payment and not at the time the wages were earned. With the payroll ‘lag time’, there will be instances where the majority of work is performed prior to the new calendar year and yet the Friday payday is in the new calendar year. When this happens, all wages will be taxed based on the new calendar year requirements.