QP Pro 2002 Payroll question

[Matt]

I'm temporarily handling payroll until our new accountant starts at the
first of the year so please don't flame me for my ignorance...

And I'm not exactly sure if anyone can help without looking at my files,
but I thought I'd ask anyway...

We do a weekly manual payroll and I'm having some strange problems. If
I add a new salary employee (it happens with all employees, I'm just
using this as an example) everything in the system matches up to our
paper version of payroll for the first couple of weeks. Then the Social
Security and Medicare numbers start to drift a penny or so a week until
they are eventually 10 to 15 cents off of our records. Any ideas? Or
can this one not be answered without looking at our setup (which was
done by the previous accountant)?

[Allan Martin]

Post by Matt
I'm temporarily handling payroll until our new accountant starts at the
first of the year so please don't flame me for my ignorance...
And I'm not exactly sure if anyone can help without looking at my files,
but I thought I'd ask anyway...
We do a weekly manual payroll and I'm having some strange problems. If
I add a new salary employee (it happens with all employees, I'm just
using this as an example) everything in the system matches up to our
paper version of payroll for the first couple of weeks. Then the Social
Security and Medicare numbers start to drift a penny or so a week until
they are eventually 10 to 15 cents off of our records. Any ideas? Or
can this one not be answered without looking at our setup (which was
done by the previous accountant)?

These are usually rounding errors that must creep into any system, manual or
computerized. The difference is that Quickbooks automatically corrects for
these small errors over time and in a manual system the same rounding error
keeps adding up and does not get corrected. You can prove this for yourself
by calculating the Social Social tax as if the payroll were paid in one big
check. You should find the QB total closer to this value.

[Matt]

Post by Allan Martin
These are usually rounding errors that must creep into any system, manual or
computerized. The difference is that Quickbooks automatically corrects for
these small errors over time and in a manual system the same rounding error
keeps adding up and does not get corrected. You can prove this for yourself
by calculating the Social Social tax as if the payroll were paid in one big
check. You should find the QB total closer to this value.

So basically you're saying that instead of just simply loosing a penny
or two due to the percent rounding difference between a weekly check and
a yearly check that QuickBooks adjusts the taxes throughout the year to
compensate? If that's the case then how do you explain to the salary
employees that their check totals shift from week to week when they
should be making the same amount every week? I've got some people that
freak out when withholding changes at the beginning of the year...
they'd probably want to bring in their own accountant if their check
amount shifted from week to week.

[Lisa C]

Post by Allan Martin

Post by Allan Martin
These are usually rounding errors that must creep into any system,

manual or

Post by Allan Martin
computerized. The difference is that Quickbooks automatically corrects

for

Post by Allan Martin
these small errors over time and in a manual system the same rounding

error

Post by Allan Martin
keeps adding up and does not get corrected. You can prove this for

yourself

Post by Allan Martin
by calculating the Social Social tax as if the payroll were paid in

one big

Post by Allan Martin
check. You should find the QB total closer to this value.

So basically you're saying that instead of just simply loosing a penny
or two due to the percent rounding difference between a weekly check and
a yearly check that QuickBooks adjusts the taxes throughout the year to
compensate?

Yes. That is exactly what he is saying. When you do the taxes in manual
system, you adjust for this rounding quarterly.

Post by Allan Martin
If that's the case then how do you explain to the salary
employees that their check totals shift from week to week when they
should be making the same amount every week?

You are speaking of PENNIES. And, the fractions of cents need awhile to add
up to the point where they show up in a check.

Post by Allan Martin
I've got some people that
freak out when withholding changes at the beginning of the year...

The beginning of the year is when any tax rate changes take place. Tell them
to 'freak out' to their local congressman. Also remind them that taxes with
limits 'peter out' before year end - they probably noticed an increase in
pay when that happened.

Post by Allan Martin
they'd probably want to bring in their own accountant if their check
amount shifted from week to week.

They won't get an accountant to check it out for the "a penny or so a week
until
they are eventually 10 to 15 cents off". Also, look at the paychecks.. the
checks themselves are usually the same. The rounding errors show up on the
company records side, and are handled from that side at tax time.

[Allan Martin]

Post by Allan Martin

Post by Allan Martin
These are usually rounding errors that must creep into any system,

manual or

Post by Allan Martin
computerized. The difference is that Quickbooks automatically corrects

for

Post by Allan Martin
these small errors over time and in a manual system the same rounding

error

Post by Allan Martin
keeps adding up and does not get corrected. You can prove this for

yourself

Post by Allan Martin
by calculating the Social Social tax as if the payroll were paid in

one big

Post by Allan Martin
check. You should find the QB total closer to this value.

So basically you're saying that instead of just simply loosing a penny
or two due to the percent rounding difference between a weekly check and
a yearly check that QuickBooks adjusts the taxes throughout the year to
compensate? If that's the case then how do you explain to the salary
employees that their check totals shift from week to week when they
should be making the same amount every week?

If you have employees that give you a hard time over the penny or two
rounding difference then I sugest you take a nickel out of your pocket, hand
it over to them and suguest they shove it. Good God man, life is too short
for this type of sillyness.

I've got some people that

Post by Allan Martin
freak out when withholding changes at the beginning of the year...
they'd probably want to bring in their own accountant if their check
amount shifted from week to week.

[Matt]

Post by Allan Martin
If you have employees that give you a hard time over the penny or two
rounding difference then I sugest you take a nickel out of your pocket, hand
it over to them and suguest they shove it. Good God man, life is too short
for this type of sillyness.

Oh I agree with you, but that's just the way some people are around
here...

[Allan Martin]

Post by Allan Martin

Post by Allan Martin
If you have employees that give you a hard time over the penny or two
rounding difference then I sugest you take a nickel out of your

pocket, hand

Post by Allan Martin
it over to them and suguest they shove it. Good God man, life is too

short

Post by Allan Martin
for this type of sillyness.

Oh I agree with you, but that's just the way some people are around
here...

Sorry to say this but they are just giving you the business.

[Matt]

Post by Allan Martin

Post by Allan Martin

Post by Allan Martin
If you have employees that give you a hard time over the penny or two
rounding difference then I sugest you take a nickel out of your

pocket, hand

Post by Allan Martin
it over to them and suguest they shove it. Good God man, life is too

short

Post by Allan Martin
for this type of sillyness.

Oh I agree with you, but that's just the way some people are around
here...

Sorry to say this but they are just giving you the business.

well I guess that when you get paid as little as we do, every penny
counts?!

[Allan Martin]

Post by Matt

Post by Allan Martin

Post by Allan Martin

Post by Allan Martin
If you have employees that give you a hard time over the penny or

two

Post by Allan Martin

Post by Allan Martin

Post by Allan Martin
rounding difference then I sugest you take a nickel out of your

pocket, hand

Post by Allan Martin
it over to them and suguest they shove it. Good God man, life is

too

Post by Allan Martin

Post by Allan Martin
short

Post by Allan Martin
for this type of sillyness.

Oh I agree with you, but that's just the way some people are around
here...

Sorry to say this but they are just giving you the business.

well I guess that when you get paid as little as we do, every penny
counts?!

A penny earned is a penny saved. Yada Yada Yada.

[John]

Post by Matt
So basically you're saying that instead of just simply loosing a penny
or two due to the percent rounding difference between a weekly check and
a yearly check that QuickBooks adjusts the taxes throughout the year to
compensate? If that's the case then how do you explain to the salary
employees that their check totals shift from week to week when they
should be making the same amount every week? I've got some people that
freak out when withholding changes at the beginning of the year...
they'd probably want to bring in their own accountant if their check
amount shifted from week to week.

This is exactly what happens because of the annual adjusting. The check
changes by a penny or two when the rounding difference adds up to more than
1/2 a cent of slush.

The employee **is** making the same amount each week (gross pay is the
same), but their tax changes slightly in this case (net pay is different.)
If they complain, tell them they could find some employer to work for that
pays using ADP or ProBusiness or similar and... the exact same thing will
happen.