Recording payroll checks after the fact (ATF), might result in incorrect amounts entered for Employee FICA/Medicare or other withholding. This article will help explain how to use the recalculate feature.
An incorrect entry for Employee FICA/Medicare also causes matching to be incorrect. For example:
Salary = $1000.00
FICA = $60.00
Medicare = $13.00
FWT = $100.00
Net Pay = $827.00
- Total FICA (Employee WH + Employer match) should be 12.4% of the check or $124.00.
- Employer FICA is calculated by subtracting Employee FICA from total FICA.
- Employer FICA would be $124.00 - 60.00 = $64.00.
- Employee FICA and Employer FICA don't match.
- The employer part is absorbing the difference.
- Total Medicare (Employee WH + Employer match) should be 2.9% of the check or $29.00.
- Employer Medicare is calculated by subtracting Employee Medicare from total Medicare.
- Total Medicare would be $29.00 - 13.00 = $16.00.
- Employee Medicare and employer Medicare don't match.
- The employer part is absorbing the difference.
To correct this, the check would need to be recalculated:
When the Recalculate button is selected, a prompt comes up informing you of which taxes are incorrect and what the correct numbers should be.
Using the example above, the prompt would look like this:
Current | Recalculated
Employee
FICA: 60.00 | 62.00
Medicare: 13.00 | 14.50
FWT: 100.00 | 96.50
Employer
FICA: 64.00 | 62.00
Medicare: 16.00 | 14.50
- Employee FICA/Medicare now matches Employer FICA/Medicare.
- Employee FICA is increased by $2.00 / Employer FICA is decreased by $2.00.
- Employee Medicare is increased by $1.50 / Employer Medicare is decreased by $1.50.
- Employee Federal Withholding is decreased by $3.50, used to offset the increased $2.00 + $1.50.
- The Net Pay remains the same.
- The recalculate button recalculates taxes ignoring any Payroll Entry Options.
- To recalculate the check based on the Payroll Entry Options, press Enter through all the fields of the check.
- If there is no difference between current and recalculated amounts, the Recalculate prompt doesn't come up.
- The Recalculate feature can be used for all existing checks.
There are special conditions that might prevent employee/employer amounts from adjusting this way when there are insufficient amounts of federal, state, or local withholding.
