Ready For Your Payroll Software Update?

SEWilco writes "A federal payroll tax reduction for two months is being pushed by the President. Paying less money to the government seems good, but if the law is changed it will change the payroll taxes in January and February. Many of us can well imagine what that will do to the many payroll systems which are already programmed with the 2012 tax rates."

Comments

Re:For two months?

[emurphy42]

This. More specifically, Googling (2012 Social Security tax cut) leads to http://www.foxnews.com/politics/2011/12/20/payroll-processors-say-two-month-fix-undoable/

According to the proposed law, the two-month extension of a 4.2 percent taxable wage is applied only to the first $18,350 of income. Wages exceeding $18,350 paid during the first two months of 2012 would be subject to a 6.2 percent Social Security tax rate.

Yes, any decent payroll software has tax table updates, but they don't all support multi-tier rates like this. I consult on an accounting suite with a payroll module, and they had to release a full-on code patch this year to support a change in Connecticut that took effect in August, whereas they usually just release simple updates that save you the trouble of hand-entering all the new rates.