How to calculate and manage payroll deductions correctly
Calculating and managing payroll deductions is a pivotal aspect of payroll management, requiring precision and a deep understanding of various regulations. While the basics of tax withholdings and benefits deductions are commonly discussed, there are nuances and less talked about aspects that can significantly impact both the employer’s compliance posture and the employee’s net pay. This blog post explores the intricacies of calculating and managing payroll deductions correctly, offering insights into practices that ensure accuracy and compliance. Understanding the types of payroll deductions The overlooked aspect: payroll deductions go beyond federal and state taxes and social security contributions. They include a variety of voluntary deductions such as retirement plan contributions, health insurance premiums, and union dues, as well as involuntary deductions like wage garnishments and child support payments. Each type of deduction has its own set of rules for calculation and prioritization, especially when an employee’s wages do not suffice toContinue Reading