Hey, is stumbled upon a nice payroll software blog, check it out, it has some good information.

I have been busy all summer working on a number of projects. I will be posting new stuff, soon, I promise!

Payroll Software: Cafeteria Plan Payroll Deduction

In the coming few posts I will be discussing many types of deductions that need to be supported by a small business payroll software.

I will start with Cafeteria Plan payroll deduction.

A cafeteria plan is a separate written plan (in which all participants are employees )maintained by the employer. The plan must meet the specific requirements and regulations of section 125 of the Internal Revenue Code (Cafeteria plans). The plan may make the benefits available to the employee, his/her spouse and dependents. One thing to note is that a cafeteria plan doesn't include any plan which provides for deferred compensation. 

Payroll Taxes:

For a Cafeteria plan cash benefits the following payroll taxes apply: Federal income tax,  FICA and federal unemployment tax. These taxes DO NOT apply to a Cafeteria plan qualified benefits.

Please check out the following resources for more information about this deduction:

FAQs for government entities regarding Cafeteria Plans:

http://www.irs.gov/govt/fslg/article/0,,id=112720,00.html

Section 125 – Cafeteria Plans:

http://www.irs.gov/pub/irs-drop/n-05-42.pdf

Cafeteria Plan Payroll Software Download:

http://www.realtaxtools.com/download.html

Questions about cafeteria plans 

http://www.mycafeteriaplan.com/faq.htm

The Handbook of Employee Benefits

http://books.google.com/books?id=XKxLhDbOQjUC&pg=PA975&dq=Cafeteria+Plan&ei=wUHXR9WcCpbWzAT5i4DXAQ&sig=lRxUtT4sQ193Q-XD3c02FtNm-TU

Happy Payroll!

Dani

Payroll Software Books

In the coming few posts, I will be talking about some of the good payroll software books that I came across. 

The first book is “Essentials of Payroll: Management and Accounting”.

Below is the table of contents for this book:

• Creating a Payroll System

• Accumulating Time Worked

• Payroll Procedures and Controls

• Payroll Best Practices 

• Compensation

• Benefits

• Payroll Taxes and Remittances

• Payroll Deductions

• Payments to Employees

• Unemployment Insurance

To read more about this book, please visit the following links:

• Google Books: http://books.google.com/books?id=eunqTszlDcEC

• Wiley: http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471456144.html

• Amazon: http://www.amazon.com/Essentials-Payroll-Management-Steven-Bragg/dp/0471264962

Happy Payroll!

Dani

Payroll accounting software used to calculate Massachusetts 2008 withholding

The state of Massachusetts issued new payroll withholding tables for the tax year 2008.  These new tables can be used on or after January 1^st. If you are using a payroll software to calculate the state income tax for your employees, then make sure to do an update for your program. Each type of payroll solution comes with its own mechanism to do these updates.

Please check the Massachusetts “Guide to Withholding of Taxes on Wages” that can be found here : http://www.mass.gov/Ador/docs/dor/Publ/PDFS/withhold07.pdf . This guide shows how to calculate payroll taxes for the state of Massachusetts. In addition the guide answers other questions such as “What is withholding?”, “Who is an employer?”, “Who is an employee?”, “What are the responsibilities of an employer?” and other similar questions.

Most payroll softwares use the percentage method to calculate payroll withholding.  The percentage method is a mathematical formula for determining withholding amounts.

Happy Payroll,

Dani

Alabama Payroll Accounting : Alabama releases payroll withholding tables for 2008

The state of Alabama issues new withholding tables for the tax year 2008. If you are using a payroll accounting program then make sure to do an update for your software. If you are using a payroll service provider then the provider should automatically update the payroll calculations to reflect these changes. I highly recommend that you visit the Alabama Department of Revenue and review their updated Alabama Withholding Tax Forms, especially the “Withholding Tax Tables and Instructions for Employers and Withholding Agents (Revised January 2008)” that can be found here http://www.revenue.alabama.gov/Withholding/whbooklet_0108.pdf .

Happy Payroll

Dani

Publication 15 (Employer's Tax Guide) and Payroll Software

January 2008

Circular E Employer’s Tax Guide and your payroll software updates

The IRS Released Publication 15 a bit late this year This publication includes general tax information (simplification of payroll laws) for employers in addition to the 2008 Wage Withholding and Advance Earned Income Credit Payment Tables (two types of payroll taxes) If you are using a payroll software, then make sure to download the updated tax tables from the vendor's website or ask for a payroll program CD to be shipped to you

For the tax year 2008:

• Do not withhold social security tax after an employee reaches
  $102,000 in social security wages
• There is no limit on the amount of wages subject to Medicare tax
• Social security and Medicare taxes apply to the wages of household
  workers you pay $1,600 or more in cash
• Social security and Medicare taxes apply to election workers who are paid $1,400 or more
• The employee tax rate for social security is 62%
•  The employer tax rate for social security is 62%
• The employee tax rate for Medicare is 145%
• The employer tax rate for Medicare tax is 145%

Happy Payroll !

Dani

This post will cover Alabama , Alaska, Arizona , Arkansas, California, Colorado and Connecticut state unemployment tax rates 

Alabama SUI rates for tax year 2008

Wage base : $8000

Rates range from 0.60% to 6.2%

New employers rate : 2.70%

Alabama Payroll Software Download

Alaska SUI rates for tax year 2008

Wage Base : $31,300

Employer Rates range from 1.0% to 5.40%

New employer rates range from 2.00% to 2.96%.

Employee withholding is 0.50% on $31,300

Alaska Payroll Software Program

Arizona state unemployment rates for tax year 2008

Wage base : $7,000 and rates range from 0.02% to 5.40%

New employers rate : 2.0%

Arizona Payroll Softwares

Arkansas SUI rates for tax year 2008

Wage base : $10,000

Rates range from 0.90% to 6.80% including the stabilization tax rate of 0.80%

New employers : 3.70%

Arkansas Payroll Program

California SUI rates for tax year 2008

Wage base : $7,000

Rates range from 1.5% to 6.2% ( does NOT include Employment Training Fund Contribution of 0.10%) 

New employers :3.40%S

California Payroll System

Colorado SUI rates for 2008

Wage Base : $10,000

Rates range from 0.3% to 5.4%

New employers rate : 3.1%

Colorado Payroll Solution

Connecticut SUI rates for tax year 2008

Wage base: $15,000

Rates range from 1.20% to 6.10% ( includes fund solvency tax of 0.70%)

New employers : 3.1%

Connecticut Payroll

Next time we will include the payroll SUI rates for more states.

Happy Payroll!
Dani