Solution Properties
Solution ID:
222924650021782
Last Modified Date:
Fri Dec 09 08:44:12 UTC 2022
Taxonomy Path:
Category//Transactions//Calculations
Author:
sageadmin
How do I gross up a payroll check so the employer pays the employee FICA taxes?
Description

This same process can be used on other taxes that have a flat rate or supplemental rate.

To calculate the gross follow the steps below:
The example below is shown for an employee that has not reached the limit for Soc or threshold for MEDADDL.

  1. Calculate to total rate as a decimal.
    • For Social Security the rate for 2019 is 6.2% as a rate it is 0.062, add in Medicare 1.45% or 0.0145 and we get the rate that was used above. (1.0 - 0.0765=0.9235).
    • If a State had a supplemental rate of 5% the rate would be 0.05
    • When we add this to the Med and Soc rate we get 0.1265 for the total rate.
  2. Take 1 and subtract the the total rate.
    • Example: 1.0 - 0.1265 = 0.8735
  3. To gross up the check we then can divide the net by total in step 2 to get the gross.
Cause
Resolution

Option 1 - Employee has not reached the SOC limit

  1. Go to Payroll, Tasks, Enter Checks.
  2. Enter the View, Period begin date, and click OK.
  3. Enter the Employee, Period end date, Check seq, and Pay ID.
  4. For the Amount, enter the desired net check amount divided by .9235. For example, $1000 divided by .9235 equals $1082.83.
  5. Click Process, clear all calculation frequencies check boxes, and click OK.
  6. Enter .00 for any federal or state withholding taxes that calculated.
  7. Click Process, clear all calculation frequencies check boxes, and click OK.
  8. Click Chk Info, verify the Check amount is correct, and click OK.
  9. Click Accept check and Finish.

Option 2 - Employee has reached the SOC limit

  1. Go to Payroll, Tasks, Enter Checks.
  2. Enter the View, Period begin date, and click OK.
  3. Enter the Employee, Period end date, Check seq, and Pay ID.
  4. For the Amount, enter the desired net check amount divided by .9855. For example, $1000 divided by .9855 equals $1014.71.
  5. Click Process, clear all calculation frequencies check boxes, and click OK.
  6. Enter .00 for any federal or state withholding taxes that calculated.
  7. Click Process, clear all calculation frequencies check boxes, and click OK.
  8. Click Chk Info, verify the Check amount is correct, and click OK.
  9. Click Accept check and Finish.

Option 3 - Employee has reached MEDADDL threshold:

  1. Go to Payroll, Tasks, Enter Checks.
  2. Enter the View, Period begin date, and click OK.
  3. Enter the Employee, Period end date, Check seq, and Pay ID.
  4. For the Amount, enter the desired net check amount divided by .9765. For example, $1000 divided by .9765 equals $1024.07
  5. Click Process, clear all calculation frequencies check boxes, and click OK.
  6. Enter .00 for any federal or state withholding taxes that calculated.
  7. Click Process, clear all calculation frequencies check boxes, and click OK.
  8. Click Chk Info, verify the Check amount is correct, and click OK.
  9. Click Accept check and Finish.

Note: This should be a 2nd sequence check. Salary and base pay would be on a 1st sequence check.

DocLink: Why are the withholding taxes so high on bonus checks?
DocLink: How do I set up bonus pays or supplemental wages to be taxed at a specific rate in US Payroll?
DocLink: How do I enter a bonus check and have only taxes calculate?
Defect ID
529334
Steps to duplicate
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