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GROSS-UP AWARD PROCESS#

Certain payments are made to employees which are “grossed up” so that a 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.

ePersonality uses third party software for legislative calculations. As a result there are no tax rates held in ePersonality. 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 (Not sure if this is used – re Karen)

Note that these may have to be updated if tax rates change. 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 user calc will only perform calculations if there is a value in PC2500, Gross Up payment.

User Calc PR-2500_GROSS_UP This user calc will calculate the amount to be added to the target net pay to be paid to the employee.

This user calc is placed at sequence 10, 60-gov’t calculations, before legislative calculations are triggered at sequence 100.

User Calc PR-2500_FICA_MED This user calc 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 user calc 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.

User Calc PR-2500_GU_ADJST This user calc 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.

IPPP Define Pay Points

IPPGU – US Pay Categories

Process to Pay and Achievement Award with a gross up. Achievement Awards are paid in separate checks from a regular pay. 1. Create a pay header(s) using the Pay Category GROSS UP. a. 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). b. 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). 2. The GROSS UP pay category will use the Federal Supplemental and State Supplemental percentage rates for the tax calculations. These are set as override to individual employee IPRLU settings.