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Nature Girl
Forum Contributor

2 Posts
Posted - 07/15/2010 :  12:03:12 AM  Show Profile  Reply with Quote
Just kind of curious why the amounts for employee Medicare and Employer Match Medicare do not agree. They seem to be off by a few cents each month. I imagine there is a logical reason?

Nature Girl
Forum Contributor

2 Posts
Posted - 07/15/2010 :  11:36:39 AM  Show Profile  Reply with Quote
I understand now about the rounding amount per employee per pay period. I would expect that this is not accumulative though. The total withheld will not match the 941 liability calculation for a given quarter, by worst case of 1 cent per employee.

Does Pensoft adjust the employee withholding amount downward by 1 cent sometimes to help compensate for these very slight occasional over-withholdings?

I could see this as a bigger issue with employees that have a fixed wage amount on every check, and may always be rounded upward.
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Jillian
PenSoft Program Support

USA
14 Posts
Posted - 08/09/2010 :  3:01:47 PM  Show Profile  Reply with Quote
Thank you for your inquiry regarding the rounding differences in Medicare taxes. The IRS anticipiated this very scenario due to the calculation method on Form 941, Line 5c. To offset, Line 7a, current quarters fractions of cents was created. This is where the rounding discrepancies are placed rather than as a balance due. When the software performs the calculation, the fraction of cents is automatically placed in the appropriate field on Form 941. For a more detailed explanation of Form 941 and Line 7a, visit the IRS website at www.irs.gov. Thank you.
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