Payroll SSI and Medicare calculations

[Keats]

The Social Security and Medicare calculations in the Payroll module are not correct. Our church gives a Christmas love gift to employees each year. I have included it in the "Pay Items" for each employee and only put a check mark by that item in December (I uncheck the normal salary item). When I do this, the software recalculates the employee SSI and Medicare amounts but does not recalculate the employer amounts. Therefore the Payroll Liabilities on the Balance Sheet are incorrect and I can't rely on the other payroll reports. I will have to manually calculate the correct amount for my monthly 941 deposit, but how do I correct the amount in the Employer Payroll Taxes account?

[Zorak]

Both amounts should calculate automatically. It sounds like your employer liability item has a static amount assigned, rather than using a tax table.

[Keats]

Zorak, I am using a tax table and I have a percentage entered for both SSI and Medicare. I don't even see how you could enter a static amount unless you did it in the Pay Items for each employee.

In the Maintain Item Descriptions module, I have "Non-Tax Item" checked for the Employer SSI and Medicare liability. The Employee SSI and Medicare descriptions have "Social Security" and "Medicare" entered as Tax Type. Is this as it should be?

[Keats]

I had neglected to double-click on the Employer Liability (for EACH employee) and select percentage and enter it. It was set to "amount" previously. Apparently, there is no relationship between the Payroll Item Descriptions (Employer Liability) and the Tax Table modules. Doesn't seem like one should have to change those employer liability items for each employee.

[NeilZ]

I had neglected to double-click on the Employer Liability (for EACH employee) and select percentage and enter it. It was set to "amount" previously. Apparently, there is no relationship between the Payroll Item Descriptions (Employer Liability) and the Tax Table modules. Doesn't seem like one should have to change those employer liability items for each employee.

These are designed for flexibility of use, as employee tax items can be used for many different types of taxes or deductions.

For instance, for 2011, you have to have two separate tax tables for SSI, as the employee percentage went to 4.2, yet the employer stayed at 6.2.

Previously, you could point both the employee withholding pay item, and the employer liability pay item at the same table, this year you can't !!

[cwaligura]

Thank you so much - the answer to this question (even though the question was different) helped me greatly with the 4.2% change for employee while the employer liability stays at 6.2%. I changed the current SS table to 4.2% then added a new table called Social Security Employer and assigned it by employee to my Social Security Employer deduction item. I am not sure that it is common knowledge about the rate change - we never received a notification in the mail by the IRS. I found out from my full time employer. Power church might want to send an email to its users to highlight this issue.

[NeilZ]

Thank you so much - the answer to this question (even though the question was different) helped me greatly with the 4.2% change for employee while the employer liability stays at 6.2%. I changed the current SS table to 4.2% then added a new table called Social Security Employer and assigned it by employee to my Social Security Employer deduction item. I am not sure that it is common knowledge about the rate change - we never received a notification in the mail by the IRS. I found out from my full time employer. Power church might want to send an email to its users to highlight this issue.

Cherrise,

I'm not sure there's much that Powerchurch can do, it had the data posted on its website, and frankly, the IRS is supposed to send out the notice to all employers.

That said, the PCUSA Board of Pensions has a copy of the online webinar they gave on Jan 4th that highlighted many tax changes for 2011. You can find it at www.pensions.org .

[Zorak]

Power church might want to send an email to its users to highlight this issue.

The year end newsletter that we sent out in December mentioned it. You can add yourself to the mailing list here: http://www.powerchurch.com/email

[heidijo59]

I received notification of this social security rate change but either it wasn't clear or I didn't read it correctly. I thought that all social security rates would be 4.2%. Now that I am filing quarterly payroll taxes I am finding out that we didn't deduct enough for the employer part. Can we just pay the extra when we file our quarterly employer portion or do we have to do something else to make this all legal? I added a tax table and got things changed over for next payroll but just wanted to make sure that I get the first quarter in line.

[NeilZ]

I received notification of this social security rate change but either it wasn't clear or I didn't read it correctly. I thought that all social security rates would be 4.2%. Now that I am filing quarterly payroll taxes I am finding out that we didn't deduct enough for the employer part. Can we just pay the extra when we file our quarterly employer portion or do we have to do something else to make this all legal? I added a tax table and got things changed over for next payroll but just wanted to make sure that I get the first quarter in line.

Actually, you're not deducting the employer's part, you're contributing. That part is calculated as part of the payroll processing, then a transaction is created to move that amount from the Social Security Expense account, to the Social Security liability account.

Wat you need to do is create a transaction to move the difference in payment from the expense account to that liability account.

You may also want to make sure you setup the Employer's Social Security payroll item correctly by reviewing the knowledgebase article here:

http://www.powerchurch.com/support/kb/k ... cle_id=143

[heidijo59]

Thanks so much for your help.

Can I just pay the difference between the 4.2 and 6.2 and be all set with this quarters contribution.

[NeilZ]

Thanks so much for your help.

Can I just pay the difference between the 4.2 and 6.2 and be all set with this quarters contribution.

I would think so. If you started the incorrect percentage at the 1st pay period of January, then it would be total payroll (excluding the minister's) x 2% .

[heidijo59]

OK, sounds good. Thanks!