A PDA is an official university employee. PDAs will have their taxes withheld (state and federal only along with Social Security) automatically by Human Resources. PDAs also have their benefits (health, vision, dental, parking) deducted from their paycheck pre-tax (meaning you end up paying less income tax). PDAs receive an official W-2 tax form at the end of the year, which is also reported to the federal government. Postdocs being hired to work on an existing R01 or other research grant awarded to their PI will most likely be PDAs.
A PDS is an official Postdoc position, but NOT a University employee. This position is generally restricted to Postdocs who have private funding sources or are part of Training Grants that do not permit benefits or other “overhead” charges to be applied to the grant. This situation can cause some problems for Postdocs when it comes to parking, child care access, work injury-related health care, and other benefits where the Postdoc is not recognized as an employee and cannot obtain access to these benefits through normal routes. It is up to you to discuss this with your supervisor and department to determine what benefits you have and work out the best arrangement. Typically, since this position provides the University with a sense of “honor” because it has been won by the Postdoc, and salary is not being charged to research grants, the department or PI will pay for these benefits (like a normal employee), out of departmental or research funds provided that such additional payments are permitted by the granting foundation. If a suitable arrangement cannot be made, the office of academic career development (OACD) may be able to mediate or help.
A summary of the differences between PDA and PDS benefits can be found here:
http://www.oacd.health.pitt.edu/sites/default/files/PDFs/Pitt%20Postdoc%20Classifications%20and%20Benefits%20September%202011.pdf
Another important distinction for the PDS is that the University does not take taxes out of your paycheck. It is up to you to pay estimated taxes (federal, state, and local) on a quarterly basis to avoid “underpayment penalties” which can be assessed by these government agencies for failing to pay a certain percentage of your taxes before April 15th. Because no W-2 is generated by the University, a 1099-M may be generated (although not always the case). It is sometimes best to consult with a tax professional to determine what the best course of action may be. Because the PDS is a non-employee, this can cause problems when applying for loans as the recent financial crisis has caused some lending institutions to tighten the restrictions on loans. A PDS is viewed by some lending institutions as “self-employed” or a “contract worker” and therefore ineligible for a loan. Consult with a financial advisor or shop around at different banking institutions if you are in need of a loan (for a car or a house).
Source: ‘Postdoctoral Guidelines updated Summer 2012’
http://www.provost.pitt.edu/documents/postdocguidelines2012.pdf