For the months of payroll that were processed for employee withholding from January 2024 through early July 2024, the New Jersey State Unemployment Tax calculation only included the Unemployment Insurance rate and did not include the Workforce Development portion.

With the release of the Sage 50 Payroll Solutions for July 2024 Tax Update, the formula now includes both the Unemployment Insurance and Workforce Development portions as expected.

You may wish to make a manual catchup deduction to each employee’s paycheck in a future pay run before the end of the year to reflect the missed withholdings for payrolls processed from January to July when the July 2024 Tax Update was installed on your system/local area network.

By manually computing the Year-to-Date totals for wages earned by each employee using certain Payroll Reports and/or using the attached Excel spreadsheet, you will be able to compute the small portion of under-withheld wages for Workforce Development Funds taxes that each employee incurred from January through July and add the result to the computed total for the NJSUI tax component in a future payroll run.

For reference, the rates for each portion of the Tax are included in the table below:

Collectively, the combined tax rate for both components is 0.425% (0.00425).

You will be able to make the change in any of the remaining periods of the year where you will be processing payroll to make the adjustment entry when issuing paychecks to employees.

 Follow the steps below to manually adjust the withholding amount calculated for NJSUI to recapture the proper amount:

1. From the Reports menu, select Payroll and open the Yearly Earnings Report.
2. In the Yearly Earnings Report, the totals for all earnings, taxes and other deductions such as benefits are displayed.
3. For each employee, take note of the Gross Wages earned for the year and optionally the Year-To-Date total for NJSUI taxes withheld from the employee’s wages.
4. Multiply the gross wages by 0.000425.
   • Optionally, you may refer to the Excel spreadsheet attached below. This contains the calculations covered above to help you calculate and validate the uncaptured Workforce Development Funds tax embedded in the NJSUI tax calculation
5. In the next payroll, add this amount to the employee’s computed withholding total for NJSUI.
    NOTE: 

   
   

   The employee taxes are reflected as a NEGATIVE with the minus sign to represent a deduction withholding. There is a complimentary Employer tax recorded as a positive liability. 

Attachment: S50-NJWorkforceDevFundsAdj.xlsx

Spreadsheet example:

In the spreadsheet and using the example where the Year-to-Date Gross Wages of an example is $35,000 from January 1 to July 11, 2024, the New Jersey State Unemployment Taxes collected for the employee are $133.88, however, the uncaptured amount for Workforce Development Funds tax is $14.88 (accounting for rounding differences).
 
The “Manual Catchup Amount” $14.88 (highlighted in red text) is the amount that should be added to the total computed amount for the NJSUI tax in only one of the remaining payrolls you will process for employees for the 2024 year.
 
For instance, in the next payroll run $5.15 is computed for the employee and therefore $14.88 will be added to this amount leading to a total one-time deduction of -$20.03 for the employee.