Federal payroll deduction?

[calie_j]

My H started an new job and the deductions on his 1st paycheck seemed way off. I used to do payroll (by hand the old fashioned way) for years so I got a copy of the book the IRS/State sends and not only were his deductions off by around $15 but I noticed something else. For federal withholding the $ amount is ALWAYS an even dollar with no cents, on his paystub they withheld 24.98 I gave H the numbers and they found the problem with the withholding (he was listed as single) but she's claiming with computer programs now the federal withholding isn't even dollars anymore. This doesn't sound right since the book they send with the table always has the withholding in even $$ and I know your refund is always an even $ also.

So I thought I'd ask all the helpful people here on the budget board. If your reading this and have your payroll stub handy could you please look at the fed withholding and post if it was an even $$ or had cents taken out? Or if anyone does payroll can you clear this up on fed withholding?

Thanks, Calie

 

[Scutapipig]

My husband's is right in front of me....cents were taken out.

 

[Chicago526]

Cents taken out on mine, too.

 

[tar heel]

No even dollars at our house either. I can honestly say that the only even dollar withholding I've ever seen was on my teens' paychecks. Neither mine nor DH's has ever been that way.

 

[WeLoveThePoly]

Taxes on my paycheck and DH's paycheck include the cents.

 

[brentalex]

My taxes on my pay stub include cents. But when you do your taxes at the end of the year, the government likes you to round all the dollar figures up or down to even dollars. If you use a computer program to do your taxes it will do this automatically. If you do your taxes by hand on the 1040 form, there is nothing to stop you from entering everything with the dollars and cents. Then at the end your figure will be in dollars and cents and you will pay or get refunded that amount. It is harder to do all the calculations with dollars and cents, but you can do it if you want.

 

[MichaelsMickey]

I do payroll for the company I work for and everyones Federal Withholding is an evan number (20.00/22.00). But I think this has to do with the Payroll program you use. We use quickbooks (which I just love).

 

[katied]

I used to do payroll manually (with the book) and yes, it was whole dollars at the time. However, now with computer programs, the programs pull withholding based on the tax schedules, not the tax tables. Therefore, it's cents.

 

[SleepyatDVC]

Bunch of cents on DH's W/H. Net pay includes cents too.

DH had a problem with his first paycheck at his new job too. They listed him as single even though he filled out the W-4 correctly.

I used this internet calculator to figure out what his pay should be. Check it out: http://www.paycycle.com/resources/paycheckCalculators.jsp

I do my own payroll and I like to round the W/H up or down a few cents to even out the FICA so the net pay is an even number. Easy for me to right the manual checks this way.

 

[mamacatnv]

I do payroll and my stubb has cents on it, also when I do the payroll tax deposits they are never even amounts.

The tax schedules are tied into percentages and with the computer programs these days they are exact.

The books provided by the IRS are a guideline, they do not give the specific tax needed for every specific gross pay amount, they are listed in gross pay ranges. If a person consistently makes the top of the range then their tax liability in theory would be higher than the person who consistently grosses at the bottom of the range.

MamaCatNV

 

[dadto1]

Most accounting software will allow you the option of rounding to the nearest dollar on W/H. Our company does for what reason I don't know. The W/H could be off due to your DH's company not properly updating the software's W/H tables or they entered his W-4 info incorrectly!

 

[moniot]

I do our payroll and use Quickbooks. All the Fed. w/h is even amounts. The rest has cents. I checked and didn't see where we had the option to round up or not. We do update our payroll information every month through Quickbooks. I never noticed this before.

 

[Cheshire Figment]

IRS Publication 15 (Also called Circular E) shows two methods to compute withholding. One is to use a table and the other a formula. Most large payroll programs are set to use the formula so when the rates chage all they need to do is make about a dozen entries to an internal table. In this situation the large payroll system will always go to the penny.

 

[disneychrista]

All deductions have cents.

 

[calie_j]

Thanks everyone for the replies. This new job hasn't turned out as good as H thought and there are some very questionable practices going on regarding the employees but he's sticking it out for a yr to get experience for a better job. It's reassuring to know at least the withholding is being done right.

Calie