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Evo-ERP and DBA Classic >> Payroll >> Fed W/H on hrly not computing correctly
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Message started by Helfrich Tool on 02/02/10 at 13:36:14

Title: Fed W/H on hrly not computing correctly
Post by Helfrich Tool on 02/02/10 at 13:36:14

We are on classic DBA V2002.4 and have been using PR for 11 years.

We hadn't noticed, but 2009 fed w/h wasn't computing correctly for the hrly employees. An employee with about the same hours last year as this year had roughly half of the FIT withheld in 2009 vs. 2008.

Tested 2010 hourly employee against the Pub 15 percentage and bracket methods with the same results as in 2009.

The hourly are in Div.2 and paid weekly, Salary are div 1 and paid semi-monthly and have been computing correctly.

Any ideas on what may have changed that could cause the problem and how to fix it?

Title: Re: Fed W/H on hrly not computing correctly
Post by Lynn_Pantic on 02/02/10 at 15:45:21

Did you change the Hourly division from bi-weekly or semi-weekly to weekly? If you started processing payroll weekly but didn't actually change the division settings then the program calculation will be incorrect and it would be by about a factor of 2 such as you are seeing. The way it works, based on the division setting it takes the pay per pay period and projects forward to get an annual total and then calculates the appropriate withholding. If you are processing a week's pay but the division is set for bi-weekly then the calculated annual total will be way too low and the resulting tax withheld will also be too low.

Also, if you are still on 2002.4 with no updates, then there may be other inaccuracies (although certainly not a factor of 2) because some of the calculation logic is in the tax table which you can update but some is embedded in the program and requires programming updates when states or the federal government makes changes. We do have updated payroll programs available as part of the IS Tech DBA updates.

Title: Re: Fed W/H on hrly not computing correctly
Post by Helfrich Tool on 02/02/10 at 16:17:47

Thanks for the prompt reply!

But, PR-M is set correctly for the divisions, '1' bi-weekly for the salaried and '2' weekly for the hourly. The employee is also division correct.

What is required to take advantage of the updates? Do you thing it would somehow help?

Title: Re: Fed W/H on hrly not computing correctly
Post by Lynn_Pantic on 02/02/10 at 20:39:11

When you go into PR-B and select an employee in the hourly division, does the "Days in Period" show 5? That is what it should show for weekly pay.

Title: Re: Fed W/H on hrly not computing correctly
Post by Helfrich Tool on 02/03/10 at 08:36:59

Yes, PR-B does come up with 5 days.

I guess I could double the values in the tax tables to get closer to actual.

Title: Re: Fed W/H on hrly not computing correctly
Post by Helfrich Tool on 02/05/10 at 11:23:02

Double the factor in the fed and CA state tables comes close with the fed (12% greater than manual calculation) and way off with CA ( 130% greater than manual calc)

Open for suggestions....