Medicare calc

[Peggy]

When I run the Payroll Totals report for January, the amount calculated for employee & employer medicare appears to be incorrect. I marked the cafeteria/ins deduction as being exempt from it, but it is calculating it before the deduction. Did I miss a step somewhere? Thanks

[Paul Mayer]

The deductions for any non-taxable deductions, must be set as a constant in the employee's record, it cannot be added on the fly. See the Tutorial titled "How to set up and use non-taxable deductions" at http://zpay.com/help (http://zpay.com/help).

Are you sure that your deduction is exempt from Medicare? The reason I ask is it is very seldom that is exempt.

In any case, all must be set up before performing any payroll in order for it to be excluded from taxing the deduction.

[Peggy]

It was set as a constant on the company's deductions tab as the instructions said to do and it was done prior to running any payrolls. Yes I am sure it is exempt...Health/Medical savings plans are per IRS Circular E, Section 5, Page 13 in certain circumstances.

[Paul Mayer]

When I run the Payroll Totals report for January, the amount calculated for employee & employer medicare appears to be incorrect. I marked the cafeteria/ins deduction as being exempt from it, but it is calculating it before the deduction. Did I miss a step somewhere? Thanks

Not as a constant in the company settings, but the employee settings as seen in this example of the employee settings in the help file:

http://zpay.com/pw-online-help/module_10_4.htm?MenuState=AcOXw5VVXcOVV8OdXXVVw5d1 dcO1w5XvtIrvtIRVBcOnAAEUAQ==

[Peggy]

It is also set as a constant deduction at the employee level, but only the company level allows you to specify from what taxes it is exempt.

[Paul Mayer]

It is also set as a constant deduction at the employee level, but only the company level allows you to specify from what taxes it is exempt.

That's true, and I just tested it by performing a payroll with Medicare set to be taxable (no checks in the employer setup) and paid an employee for today and printed the reports and then deleted the transaction so I could change the settings and run another test. Then I set the deduction to be exempt from Medicare and paid the employee again and printed the reports and they were exempt from the Medicare tax as expected on the reports.

[Peggy]

Actually it is just calculating incorrectly...it shows the correct amount as gross wages subject to Medicare (17372.71), but has calculated the tax as 254.61 or 1.4655%. It shows on the report to be 1.45%. What else could be pulling into this?

[Peggy]

I will send you a copy of the report if needed.

[Paul Mayer]

I'm guessing that you' possibly edited a payroll transaction or did a manual entry "after-the-fact-payroll" which was incorrectly entered and that is why the total is off. I just did a quick spot check of six companies I have here and the Medicare comes out to the penny.

We store evidence in the database of any edits made, send me your database to inspect by following these instructions:

http://zpay.com/vbulletin/showthread.php?1449-How-to-Send-us-your-Backup-Database

[Paul Mayer]

Actually it is just calculating incorrectly...it shows the correct amount as gross wages subject to Medicare (17372.71), but has calculated the tax as 254.61 or 1.4655%. It shows on the report to be 1.45%. What else could be pulling into this?

I think we figured out what you did. You had the check boxes telling what a deduction is exempt from set one way in the deduction settings but changed it after paying the employees. That will change your "taxable wages" but pull in data that was used under the original settings throwing it off.

The check boxes I'm referring to are shown on this page in the help file:

http://zpay.com/pw-online-help/module_9_3.htm?MenuState=AcOXw5VVXcOVV8OdXXVVw5d1d cO1w5XvtIrvtIRVBcOnAAElAA==

Once a deduction is set and you start using it, you cannot change those settings without any repercussions..

It took us about an hour to be able to find that made the taxable wages change and should have know that from the code, I just got lucky as I tested the sample company that I checked Medicare earlier this week when I tested after your first message. So that is what tossed it off on you after checking that box.

Whew! :-)

[Peggy]

Thanks - that could be as there are two of us using the system. Neither of us recall making changes but as the system is new to us it could easily have happened. Is there a way to make sure the employee's record correctly shows the taxable wages as intended or are we stuck with it the way it is? We overwithheld medicare though, correct?

[Paul Mayer]

Going forward will be correct but the stored transactions are incorrect and the only way to fix them would be to delete them, set the date to that pay date and run those payrolls over again.