Table of Contents
GROSS-UP AWARD PROCESS#
Certain payments are made to employees which are "grossed up" so that the after tax net pay is the target payment. If an employee is to receive a $500.00 payment after tax, then a gross up amount must be calculated so that the gross pay is increased to reflect an after tax payment of $500.00.
Personality uses third party software for legislative calculations. As a result there are no tax rates held in Personality. In order to calculate the gross up amount the federal, state, FICA and Medicare deduction percentages are referenced from user variables. These are then applied to the target amount to be paid to arrive at a gross pay which will, after all deductions are taken be the target amount.
IMVR - User Variables#
The tax rates are stored in the Vertex software and as such, Personality has no facility to access them for use in a process such as a gross-up. Tax percentages have been set up in the following user variables:| Variable code | Percentage |
|---|---|
| GU_FED_SUPP | 25 |
| GU_FICA | 6.2 |
| GU_MEDICARE | 1.45 |
| GU_NJ_TAX RATE | 5.5 |
| GU_NYC_TAX _RATE | 4 |
| GU_NYS-TAX RATE | 9.77 |
| GU_PA_TAX_RATE | 3.07 |
| GU_PHIL_TAX_RATE | 3.9296 |
| GU_RR_TIER2 | 3.9 |
| GU_SUI_NJ | .425 |
| GU_SUI_PA | .09 |
If there is a change in a tax rate, it will not be seen in the net pay result of the gross-up calculation as any difference between the target amount and the result of the legislative calculation's net pay is adjusted to equal the target amount. The difference is added to the federal tax deduction which may then reflect a higher-than intended deduction.
The BONUS pay category must be selected for Gross Up calculations.
All of these UserCalc's will only perform calculations if there is a value in PC2500, Gross Up payment.
UserCalc PR-2500_GROSS_UP#
This UserCalc will calculate the amount to be added to the target net pay to be paid to the employee. It is placed at sequence 10, 60-Gov't Calculations, before legislative calculations are triggered at sequence 100.GrossUpAwardProcess_01.jpg
UserCalc PR-2500_FICA_MED#
This UserCalc will check to determine if FICA and/or Medicare are at a zero deduction rate, caused by reaching their respective caps. If either of these is a zero deduction, then the grossed up gross pay will be reduced to reflect no FICA and/or Medicare deductions.This UserCalc is placed at sequence 20, 70-After Govt Calcs. If either FICA and/or Medicare are at zero values, the pay calc will continue in this sequence to re-calculate the legislative calculations. If there is no change to FICA and/or Medicare then the pay point type is exited before a re-calc of taxes.
GrossUpAwardProcess_02.jpg
User Calc PR-2500_GU_ADJST#
This UserCalc will compare the target amount and the calculated net pay from the grossed up gross and if there is a difference, it will be added to the net pay to insure that it will be exactly the target payment amount.GrossUpAwardProcess_03.jpg
IPPP - Define Pay Points#
GrossUpAwardProcess_04.jpg
IPPGU - US Pay Categories#
GrossUpAwardProcess_05.jpg
Process to Pay and Achievement Award with a gross up.#
Achievement awards are paid in separate checks from a regular pay.- Create a pay header(s) using the 'Gross Up' pay category.
- UPCPAY can be used for a manageable group of employees to be paid. In this case, PC2500 will be manually added to the pay headers with the achievement amount entered for each employee (the target amount).
- For a large number of employees, it may be more practical to use an Excel spread sheet to create a data load into IPTL which will then be loaded into pay headers using UPTL. This will consist of the employee number, date and amount. All other information will be defaulted into the IDIF that controls the load. (No IDIF has yet been built to load this data. If required a request should be entered to build it).
- The GROSS UP pay category will use the Federal Supplemental and State Supplemental percentage rates for the tax calculations. These are set as overrides to individual employee IPRLU settings.
Gross Up User Calc for Canada#
| Global Name | Global | Type Global Length | Initial Value |
|---|---|---|---|
| BK Stat payout | Number | 0 | |
| Def_comp_ded | Number | 0 | |
| EARNINGS | Number | 0 | |
| Fl_Hol_entitle | Number | 0 | |
| G_OT_Payout | Number | 0 | |
| G_current_OT | Number | 0 | |
| Gross_up_value | Number | 0 | |
| Payout $ | Number | 0 | |
| SUNOT | Number | 0 | |
| banked OT payout | Number | 0 | |
| jan2 | Date | ||
| service-date | Date | ||
| time lost | Number | 0 |
PR-GROSSUP_1 #
| Variable Name | Variable Type | Variable Length | Initial Value |
|---|---|---|---|
| Tax-Fed Number | Number | 0 | |
| Tax-St | Number | 0 |
| Line | Com. | Operand 1 | Oper. | Operand 2 | Operand 3 | Go To | Else | Description |
|---|---|---|---|---|---|---|---|---|
| 10 | LET | Variable Tax-Fed | PRC | Element-Current (N) GROSS | User Consant TAX_%_FED | 20 | Calculate Federal and state taxes on a gross up amount based on User Variables holding the tax rate percentages. This UserCalc is in IPPP before taxes are calculated. ++++++++++++++++++++++++ ++++++++++++++++++++++++ ++++++++++++++++++++++++ Load Federal tax calc into a variable | |
| 20 | LET | Variable Tax-St | PRC | Element-Current (N) GROSS | User Consant TAX_%_STATE | 30 | Load State taxes into a variable | |
| 30 | LET | Global Variable Gross_up_value | EQ | Pay Component - Current (N) 2011 | 40 | Load the entered gross up amount, before estimated taxes are added, to be picked up by UserCalc PR-GROSSUP_2. | ||
| 40 | LET | Pay Component - Current (N) 2110 | ADD | Pay Component - Current (N) 2011 | Variable Tax-Fed | 50 | Add Fed taxes to gross up amount | |
| 50 | LET | Pay Component - Current (N) 2110 | ADD | Pay Component - Current (N) 2011 | Variable Tax-St | 99999 | Add state taxes to gross up amount. This will represent the gross up + federal and state taxes based on UV percentages. | |
| 99999 | EXIT |
PR-GROSSUP_2 #
| Variable Name | Variable Type | Variable Length | Initial Value |
|---|---|---|---|
| Fed_difference | Number | 0 | |
| State_difference | Number | 0 | |
| difference | Number | 0 | |
| net_pay | Number | 0 |
| Line | Com. | Operand 1 | Oper. | Operand 2 | Operand 3 | Go to | Else | Description |
|---|---|---|---|---|---|---|---|---|
| 10 | LET | Variable net_pay | SUB | Element - Current (N) GROSS | Element - Current (N) DEDUCTIONS | 20 | This UserCalc finds the difference between the estimated gross up taxes and the calculated taxes. The difference is prorated and added back to the Fed and State tax deduction so that the Net Pay is the amount of the gross up pay before tax estimates are added. This UserCalc must be in the 70-After Govt Calc pay point type in IPPP ++++++++++++++++++++++++ ++++++++++++++++++++++++ ++++++++++++++++++++ | |
| 20 | IF | Global Variable Gross_up_value | EQ | Variable net_pay | 99999 | 30 | Determine the net pay If the gross up value is the same as net pay,exit | |
| 30 | LET | Variable difference | SUB | Variable net_pay | Global Variable Gross_up_value | 40 | Determine the difference between the net pay and the gross up value | |
| 40 | LET | Variable Fed_difference | DIV | User Constant TAX_%_STATE | User Constant TAX_%_FED | 50 | Determine the ratio of Fed to State taxes and load into variable. This will be the factor to multiply the difference by to determine what portion is for Fed taxes. | |
| 50 | LET | Variable Fed_difference | MLT | Variable difference | Variable Fed_difference | 60 | This is the amount that is the Federal Tax difference | |
| 60 | LET | Variable State_difference | SUB | Variable difference | Variable Fed_difference | 70 | This is the amount that is the State Tax difference | |
| 70 | LET | Pay Component - Current (N) 6000 | ADD | Pay Component - Current (N) 6000 | Variable Fed_difference | 80 | Add the Federal Tax difference to existing Federal Tax deduction | |
| 80 | LET | Pay Component - Current (N) 6020 | ADD | Pay Component - Current (N) 6020 | Variable State_difference | 99999 | Add the State Tax difference to the existing State Tax difference | |
| 99999 | EXIT |
