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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Payroll FICA SOc Secur...
Microsoft Dynamics GP (Archived)

Payroll FICA SOc Security and Medicare calculation

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Posted on by AndreaIES 1,005

I have a situation where we pay a bonus to the employees. The amount of the bonus is the same for all the employees $27.05 but the FICA SS and FICA Med is different for some employees. What will cause this difference? I check all setup and it seems to be correct. 

Screenshot-at-Sep-05-15_2D00_24_2D00_39.png

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  • Suggested answer
    Thomas Franz Profile Picture
    Thomas Franz 1,105 on at

    Dynamics GP does penny variance rounding to ensure that the SS & Med taxes are correct at the end of the year.

    Let's say for example that an employee's SS tax for a regular pay period is calculated to be 3.33333. The system rounds that to $3.33 the first week and drops the 0.00333 amount. The second week, the system calculates the same tax amount. But, if the system calculated tax on the full YTD wage amount, it would calculate to be 6.66666 or rounded to $6.67. So, the second week, the system picks up the penny and sets the tax amount to $3.34. The contra to this can occur as well if the system rounds down the prior week. The system will never adjust the tax amount by more than $.01 per pay run.

    Hope this helps.

  • AndreaIES Profile Picture
    AndreaIES 1,005 on at

    Thanks for your reply so you are saying that this happens on the first weeks and it will correct as they go? This is happening to some new employees, which will make sense to what you are saying but also happens to existing employees.  

  • Suggested answer
    Thomas Franz Profile Picture
    Thomas Franz 1,105 on at

    Yes, this will happen periodically throughout the year for all employees.

    As an FYI, it looked like you were trying to gross up a bonus amount. If so, you might want to take a look at our Paycheck What If product. It will automatically perform the gross up calculations, accounting for this type of issue.

    www.integrity-data.com/.../paycheck-calculator

    Hope this helps. Let me know if you have any further questions.

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