Full Medicare Pickup on Pickup
For full Medicare Pickup on pickup, enter 2.9% in the Employer Rate field and leave the Employee Rate field blank.
The Medicare pickup calculation is determined if the Employer portion > 1.45% (current standard employer amount in our tax tables) If above 1.45 the system would do the necessary inflation accordingly.
The code is setup to also check for Medicare partial pickup.
Employer Pays Entire Employee Portion of Medicare Calculations
An example of the Employer's intent to pay the entire employee portion of Medicare.
Salary = $10,000.00
Employee's Portion of Medicare Paid by the Employer = 1.45%
| Payroll Item | Field Name | Percent |
|---|---|---|
| 692 | Employer Rate | 2.9% |
The inflated gross wages are shown in the 692 Payroll Item Record.
The formula for calculating Medicare wages with Employer pick-up is:
W = S <div symbol> (100% - R)
- W = The employee's total Medicare wages after the increase reflecting the pick-up effect.
- S = Stated pay before pick-up of Medicare.
- R = Percentage of employee Medicare being picked-up by the Employer
| Medicare Wages | |||
|---|---|---|---|
| $10,000.00 | <div symbol> | (100%-1.45%) | 98.55% |
| $10,000.00 | <div symbol> | 98.55% | $10,147.13 Medicare Wages |
| Contributions to Medicare | Medicare Gross | ||||
|---|---|---|---|---|---|
| Employee Portion Paid by Employer | $10,147.13 | * | 1.45% | = | $147.1334 or $147.14 (rounded amount) |
| Employer Portion | $10,147.13 | * | 1.45% | = | $147.1334 or$147.14 (rounded amount) |
| Total Contributions | = | $294.2693 or $294.28 (sum of rounded amounts) |
Example of 692 record set up for Full Board Pickup
Employer Pays Part of Employee Portion of Medicare Calculations
An example of Employer's intent to pay part of employee portion of Medicare.
Salary = $10,000.00
Employee's Portion of Medicare Paid by the Employer = 2.45%
| Employer Partial Medicare Pickup | ||
|---|---|---|
Employee's Salary | = | $10,000.00 |
| Employee's Medicare Portion paid by the Employer | = | 1.00% |
| Employee's Medicare Portion paid by the Employee | = | .45% |
| Employer's Medicare Portion | = | 1.45% |
These figures can be substituted into the above formula as follows:
| Payroll Item Code | Field Name | Percentage |
|---|---|---|
| 692 | Rate | .45% |
| 692 | Employer Rate | 2.45% |
The inflated gross wages are shown in the 692 Payroll Item Record.
The formula for calculating Medicare wages with Employer pick-up is:
W = S <div symbol> (100% - R)
- W = The employee's total Medicare wages after the increase reflecting the pick-up effect.
- S = Stated pay before pick-up of Medicare.
- R = Rate of employee Medicare being picked up by the Employer.
| Medicare Wages | ||||
|---|---|---|---|---|
$10,000.00 | <div symbol> | (100%-1%) | = | 99% |
$10,000.00 | <div symbol> | 99% | = | $10,101.01 Medicare Wages |
| Contributions to Medicare | Medicare Inflated Gross | ||||
|---|---|---|---|---|---|
Employee Portion Paid by Employer | $10,101.01 | * | 1.00% | = | $101.01 |
| Employee Portion Paid by Employee | $10,101.01 | * | .45% | = | $45.454545 or $45.46 (rounded amount) |
| Employer Portion | $10,101.01 | * | 1.45% | = | $146.464645 or $146.47 (rounded amount) |
| Total Contributions | = | $292.9292 or $292.94 (sum of rounded amounts) |
The Employer Error Adjustments field is used to make corrections for over or under withholding of the Payroll Item in previous payrolls. This field is used for corrections to the board portion of the Payroll Item. A negative amount in this field will give money back to the board the next time the employee is paid. A positive amount in this field will cause the board to pay more in addition to the regular Payroll Item amount the next time the employee is paid. Click on
:
- Amount - enter in the amount of the error adjustment- Required field
- Description - Enter the description of the error adjustment
- Date - If the Date field is left blank then the Error Adjustment will be processed on the next processed payroll. If the Error Adjustment is to be processed on a specific payroll then the Date field must be a date within the payroll processing period (date range from Beginning Date of a payroll to Ending Date of a payroll) for the payroll you wish to have the Error Adjustment applied.
- Pickup -
Check box if error adjustment is for an employer pickup amount **See example below** - To Delete or cancel, click on
The TD fields on any effected Payroll Items will be updated accordingly when the error adjustment is processed through a pay or through Payroll Item Refund.
**** Medicare Full Pickup example **This calculation is the same for Full FICA Pick up****
Pay Report
Medicare Applicable Gross (with full pickup) is $3368.11 x 1.45% x 2 = $97.68
