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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."

19 of 105 comments (clear)

  1. Siren voice.... by spaceplanesfan · · Score: 5, Funny

    Attention! We need you, all you COBOL programmers!.

  2. Srsly? by Anonymous Coward · · Score: 4, Informative

    They'll load a different tax rate table. I'm sure it's modular enough they can just change a table (or two, or three) and be done.

    Seems easy to me. But then I write software for a living, so what would I know.

    1. Re:Srsly? by Anonymous Coward · · Score: 3, Insightful

      Yea, I have to say, this is only a complicated change for seriously poorly written payroll software. And are we really making the argument that in the middle of a massive recession it's acceptable to have our economic policy handcuffed because someone wrote some really crappy payroll software and doesn't want to fix it?

    2. Re:Srsly? by spudnic · · Score: 3, Informative

      This is exactly it. And almost every shop that processes payroll subscribes to a service that updates the tax tables for you as the laws change. www.bsi.com is one.

      I'm sure they have the tax tables written up either way the vote goes so they can get it out the door.

      --
      load "linux",8,1
  3. Software update? by Lumpy · · Score: 3, Insightful

    If your payroll software is that crappy that you have to update it for this change then please buy some real stuff. All you do is change the tax tables.

    Honestly, what crap software out there requires a full software update to change tax tables?

    --
    Do not look at laser with remaining good eye.
    1. Re:Software update? by Kamiza+Ikioi · · Score: 4, Funny

      Honestly, what crap software out there requires a full software update to change tax tables?

      Quicken 0.1a Private Garage Alpha "Cain" Edition running on 386 SX with DOS 5 known best for its 9/9/9 Sim City tax tables, no floating point operations, and inability to distinguish between charitable and political contributions.

      --
      I8-D
    2. Re:Software update? by Attila+Dimedici · · Score: 3, Insightful

      The problem is that it is only for two months and it is only for people who earn less than a certain amount. This is not income tax (which has varied according to how much you make since before computers were used to calculate payroll). This is for Social Security and Medicare taxes, which traditionally have been the same percentage for everyone up to a certain dollar amount of income (everything over that is not taxed). This only applies to people who make less than a certain amount. So, I suspect that, unlike income tax, this has traditionally been done by a straight percentage calculation (one that traditionally, also, automatically debited the same amount out of the the employer's payroll account without showing it on the paystub).

      --
      The truth is that all men having power ought to be mistrusted. James Madison
    3. Re:Software update? by The+Bastard · · Score: 3, Insightful

      Earlier in my career, I worked on a payroll system. It's not as straightforward as one might think, as payroll systems rarely are similar. In fact, the term "payroll" should really be replaced with "compensation", and "system" replaced with "rules engine system".

      In a simple small business, compensation is probably pretty straightforward. Hourly employees, owner takes a salary. But what if an owner takes a draw against the the equity of the business?

      Up the chain a bit, you now may have union dues to account for, bonuses, stock options instead of "cash", severance, and various other--often contractually obligated--quirks. Does health insurance count as compensation from the company? The smartphone with ultra data plan? The company car?

      On the political side, what are the basic rules? What are the exemptions the politicians put in for their buddies?

      There are a lot of little gotchas in "payroll" systems, and the use case testing needs to be spot on. Because no one wants their paycheck screwed up.

  4. Anti-cyclic thinking by captainpanic · · Score: 3, Interesting

    It's fine to do some anti-cyclic economy... and I understand the merits.

    But wasn't it the idea that you reduce expenses in boon times, and go anti-cyclic, and thereby spend more in bad times?
    But the last decade, the USA has clearly acted cyclic, not anti-cyclic. The US has spent money like its life depended on it (and many thought it really did, with terrorists lurking in every corner of the world, all aiming to bomb the US back into the Middle Ages).

    It's surprising to see that there is even more money available... and it makes me wonder who will go down first in economic terms: the EU, or the USA.

  5. Change Management PITA by Anonymous Coward · · Score: 4, Informative

    As others have said, updating the rates in the tax tables is trivial. It actually takes us more time to go through change management process and get no less than 4 levels of approval to make the changes in the production payroll system.

  6. Re:On a separate note... by mwvdlee · · Score: 3, Funny

    ...fuck you /., my Karma is terrible for some stupid reason, so i start at -1? It's not like I'm trolling or flame-baiting, every one of my posts is on topic. So fuck you, that's what i have to say about that. I'll just start a new account. With blackjack, and hookers. In fact, forget the new account!

    Nope... not trolling or flame-baiting at all there.

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  7. What? by lennier1 · · Score: 5, Funny

    A bunch of idiots introduces the need for a change in the last minute? That's something I'm sure no developer would've expected.

  8. Re:On a separate note... by icebraining · · Score: 3, Informative

    Actually they start at 0. And the "stupid reason" is simply because you don't seem to write informative, interesting or insightful posts, and funny doesn't give you karma.

  9. Re:For two months? by Attila+Dimedici · · Score: 4, Informative

    Actually, I don't think that is it. My bet would be that most payroll systems are coded to assume that everyone who pays the payroll taxes (Social Security and Medicare) pay the same percentage up to the limit (you only pay these taxes up to a certain amount because you only collect based on income up to a certain amount). They are now introducing a system whereby those who earn less than a certain amount pay less than those who earn more than that (and the cutoff point is different from the amount which you don't pay this tax on the income above that amount--although you still pay for everything less than that amount that you earn).

    --
    The truth is that all men having power ought to be mistrusted. James Madison
  10. Re:Hardly a Surprise by skids · · Score: 3, Insightful

    It's just an extension. If some payroll department cannot handle this, how did they handle the original tax break? Add to that, why is it suddenly Obama's fault that the congress can't get its act together and pass a clean bill (e.g. one that doesn't have a "lets grind up orphans and serve them in school lunches" provision or whatnot.)

  11. That's Congress for you... by PortHaven · · Score: 3, Insightful

    "We never think before we act, and when we act, we act with politics in mind. Not intelligence in mind."

    Progress - a forward or onward movement (as to an objective or to a goal) :

    Congress - opposite of progress.

  12. more October filings for IRS by peter303 · · Score: 3, Interesting

    The December 2010 tax changes meant several official IRS forms were not available until February or even March. A lot of this had to do with basis information now mandated on brokerage 1099s. So the old habit of filing in early February for anticipated refund becomes less possible. Even April filing is threatened by lack of forms and data. More people get the automatic October extension tax-preparers tell me.

  13. Re:For two months? by emurphy42 · · Score: 4, Interesting
    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.

  14. Re:Multiple tax tables by Slashdot+Parent · · Score: 4, Informative

    Unless a program's tax table data structure isn't sufficiently fine-grained to deal with multiple tax tables that apply to different parts of a single year.

    I can't speak for all payroll software packages, but QuickBooks can definitely handle this. All rates are specified with arbitrary effective dates. I'd be shocked if any payroll system could not handle mid-year changes. Stuff changes mid-year all the time.

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