Hi KathleenZ,

The way Sage 300CRE Payroll calculates tax uses an annualization based on the pay frequency (weekly = 52 pay periods) and taxable wages. Is does this for each individual check.

A check that is 225.00 would annualize out at 11,700.00 per year, which would be the lowest FWH tax rate of either 10% or 0, depending on filing status, exemptions, deductions, and credits:

If you were to tack that 225.00 on to a regular weekly paycheck that was 1000.00, that annualizes to 63,700.00, a 22% rate. That would make a difference in the withholding tax. Technically it would be more accurate.

Thanks!

Hi KathleenZ,

The way Sage 300CRE Payroll calculates tax uses an annualization based on the pay frequency (weekly = 52 pay periods) and taxable wages. Is does this for each individual check.

A check that is 225.00 would annualize out at 11,700.00 per year, which would be the lowest FWH tax rate of either 10% or 0, depending on filing status, exemptions, deductions, and credits:

If you were to tack that 225.00 on to a regular weekly paycheck that was 1000.00, that annualizes to 63,700.00, a 22% rate. That would make a difference in the withholding tax. Technically it would be more accurate.

Thanks!

That's crazy. So my only option to keep the withholding down where it was is to issue 2 separate checks.

It seems to me that the higher withholding rate would be more accurate for people in the long run, but I'm not sure the staff who just saw the difference will care, they want their $30 back...lol

Is it not true that I could label the Auto allowance as as supplemental (as it's a bonus that comes through once per month) and lessen the tax burden on it specifically?

Thank you so much for your answer!

Yes, you can do that in Payroll to specify a flat-rate tax for the pay.

We recommend discussing with a tax accountant to make sure that this is acceptable per IRS and state tax regulations.

Thanks!

It's looking like we are just going to continue giving out separate checks for the allowance. :/