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Posted: Thu Apr 01, 2021 10:34 am
Is there a way to see how TimeTrax is doing some of the built in calculations? I found that they are rounding to the nearest cent in social security withholding but SurePayroll appears to be taking the floor value (aka always rounding down).
Re: Calculation details
Posted: Fri Apr 02, 2021 8:38 am
I would argue SurePayroll is doing it "wrong", considering right in the IRS Publication 15 on Page 35 it explains:
"Fractions-of-cents adjustment. If there is a small difference between total taxes after adjustments and nonrefundable credits (Form 941, line 12; Form 944, line 9) and total deposits (Form 941, line 13a; Form 944, line 10a), it may have been caused, all or in part, by rounding to the nearest cent each time you figured payroll. This rounding occurs when you figure the amount of social security and Medicare tax to be withheld and deposited from each employee's wages. The IRS refers to rounding differences relating to employee withholding of social security and Medicare taxes as “fractions-of-cents” adjustments."
Regardless though, Social Security and Medicare are calculated as a whole across all of your employees and reconciled when you file your 941 Form. Therefore as stated above, minor adjustments for fractions of a cent will almost always occur and be adjusted for in Box 7 (Current quarter’s adjustment for fractions of cents) of the 941.
If SurePayroll is always rounding down, especially on the employee portion of the tax, they are simply moving the burden onto the employer to pay that fraction of a cent rather than have the employee pay it. They are also certainly increasing the chance that adjustments may be needed at some point. Either way the government gets their money though.