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KathleenZ

Dumb Question about Federal Withholding Rates

Posted By

So, I have taken over doing payroll and am new to this and am trying to streamline it.

So - previously we would give one check for pay, one check for an auto allowance on the 4th week of the month.

I combined the pay and auto allowance onto one check (becsaue, why not?) and now there is ~$30 more in Fed WH being taken out than was on separate checks. wth?

I have looked up rates, but Everything seems to be auto in Sage. We can clearly see it's only the withholding that's affected, but there is no way a $225 Auto allowance puts everyone in a new tax bracket.

?

Parents Reply Children
  • in reply to MaryThompson

    That's along the lines of what I was thinking with it being supplemental /reimbursement. 

    The problem is that the money should be taxed, so it's going to affect returns in the end. 

    I personally would rather let it calculate at Jesse says, then in theory I won't owe as much at the end of the year, unfortunately not everyone else feels that way though.

    When I first took this over they told me they did 2 separate checks so it didn't get taxed as much and I thought they were crazy (along with several other people) because it was such a small amount. 

    I appreciate all this input - if I do add it as supplemental, I'm not sure how to adjust the rates.

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