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.
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)
| 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) |
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)
| 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
:
Check box if error adjustment is for an employer pickup amount **See example below**
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. |
Pay Report
Medicare Applicable Gross (with full pickup) is $3368.11 x 1.45% x 2 = $97.68
