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Net Pay Calculator PowerPoint Presentation

Net Pay Calculator PowerPoint Presentation

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Net Pay Calculator PowerPoint Presentation

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  1. Next  Net Pay CalculatorPowerPoint Presentation

  2. Next  What is Net Pay Calculator? Net Pay Calculator is an Excel spreadsheet designed to determine the effect of certain payroll changes on tax withholding and net pay, such as: • Pay raises • Special payments • Achievement awards • Deferred compensation • Dependant care deferrals • Federal or state tax allowances Net Pay Calculator includes state tax tables for Minnesota only. Residents of other states may use the calculator, but the state tax calculated will be Minnesota tax.

  3. Next Where is Net Pay Calculator? Access the Net Pay Calculator on the Minnesota Management & Budget Web site. The Web address is: http://www.mmb.state.mn.us/doc/sema4/calc/netpaycalc2014.xls

  4. Next Recommended use of Net Pay Calculator • Open the Net Pay Calculator Excel file and this Net Pay Calculator PowerPoint Presentation. Click between the files when you have questions. • This PowerPoint file may also be reviewed slide-by-slide, reading each description of what to enter in the Net Pay Calculator fields.

  5. Next What the colors mean In yellow fields, enter values or accept $0.00. In white fields, the program calculates or fills in values based on user entries. In red fields, the program calculates retirement, taxes and net pay based on user entries.

  6. Next For best results • Fill in actual amounts from a current paystub. • Verify that taxes, retirement and net pay are identical to the current paystub. Go to step 3 only when all amounts match. • Change something, such as the number of allowances or the amount of deferred compensation. • Review the effect of the change on taxes and net pay. Using these steps ensures the most accurate what if results.

  7. Net Pay Calculator To see the explanation for a field… CLICK ON IT!

  8. Form Biweekly Gross Enter the biweekly gross wage payment. • Include regular wages only, such as regular pay, vacation leave or sick leave. • Do not include leave conversions or supplemental earnings, such as overtime, achievement awards or leave payoffs. Where can this amount be found? In the Earnings section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Earnings section.

  9. Enter the TOTAL dollar amount of leave to be converted to deferred compensation. Total hours converted X Employee’s rate of pay Form Converted Leave Gross Where can this amount be found? In the Earnings section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Earnings section.

  10. Enter the gross amount of supplemental earnings. Regular wages are taxed using IRS tax tables. Supplemental wages, such as severance, vacation payoffs, moving expenses and overtime, are taxed at flat rates that occasionally change. Recently, the rates have been 25% for federal and 6.25% for state. Form Supplemental Gross Is a particular earnings type supplemental? Payroll staff can look in two places in SEMA4: • Set Up HRMS > Payroll Setup > Earnings > Earnings Table. For any earnings code, see Tax Method on the Taxes page. The Supplemental button is selected if the earnings is taxed using supplemental rates. • Payroll > Pay Distribution > Review Paycheck, Paycheck Earnings page. In the Other Earnings box, “Supplemental” displays under the Tax Method column for supplemental earnings. It looks like this:

  11. Enter the biweekly amount of deferred compensation and/or tax sheltered annuity deduction. Do not include leave converted to deferred compensation. Enter leave conversion deductions in the Converted Leave Deduction field. Form Deferred Compensation Where can this amount be found? In the Before-Tax Deductions section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Before-Tax Deductions section. If there is a leave conversion in the Earnings section, subtract it before entering the amount.

  12. Form Deferred Comp Employer Match Enter the state’s biweekly contribution to deferred compensation and/or tax-sheltered annuity. Bargaining agreements and compensation plans indicate the maximum match amounts. Where can this amount be found? In the Employer Paid Benefits section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Employer Paid Benefits section.

  13. Enter the same amount entered in the Converted Leave Gross field above. The leave conversion impacts net pay. Net pay is reduced by the amount of FICA/Medicare and retirement taken on the leave conversion. Form Converted Leave Deduction

  14. Enter biweekly amounts of employee paid health and dental deductions: + Health insurance deduction + Dental insurance deduction = Total Before-Tax Insurance • Form Before-Tax Insurance Where can this amount be found? In the Before-Tax Deductions section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Before-Tax Deductions section.

  15. Enter biweekly total of other before-tax deductions: + Dependent & Medical expense account + Parking/Transportation + Hlth Care Savings Plan/Hlth Savings Acct = Total other before-tax deductions Form Depend-MedExp/Park/Bus/Van/HCSP/HSA Where can this amount be found? In the Before-Tax Deductions section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Before-Tax Deductions section.

  16. Enter the taxable life insurance premium amount paid by the employer for coverage greater than $50,000. This amount increases the taxable gross wages. Form Taxable Insurance Where can this amount be found? In the Employer Paid Benefits section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Employer Paid Benefits section. The taxable item(s) have an asterisk, such as Basic Life*.

  17. Taxable mileage is: Reimbursed at a rate greater than the IRS rate Paid with earn codes MIT and MOT Taxable meals are: Meals without overnight lodging Paid with earn codes MEI and MEO Form Taxable Mileage & Meals Enter total dollar amount of taxable mileage and meals. Taxes are withheld at supplemental rates. Where can this amount be found? In the Earnings section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Earnings section.

  18. Form Personal Use Car - Dollars Enter the dollar amount calculated for personal use of employer-provided vehicles. Earn codes used to report personal use of state vehicles:CAR = number of commutes X $3.00CMI = number of miles driven for personal use X IRS mileage rateCRL = amount of annual lease value attributable to personal use Where can this amount be found? In the Earnings section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Earnings section.

  19. Enter the number of federal allowances claimed on the W-4 form (Employee’s Withholding Allowance Certificate). Form Federal Allowances Where can this number be found? In the Federal W4 Information section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Federal W4 Information section.

  20. Enter the number of state allowances claimed on the W-4/W-4MN form (Employee’s Withholding Allowance Certificate). Form State Allowances Where can this number be found? In the State W4 Information section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, State W4 Information section

  21. Form Tax Marital Status Enter the marital status claimed on the employee’s W-4 form (Employee’s Withholding Allowance Certificate). 1 = single 2 = married Where can this status be found? In the Federal and State W4 Information section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Federal and State W4 Information section

  22. Form Additional Federal Tax Enter the biweekly amount of additional federal tax to be withheld from gross pay, claimed on the employee’s W-4 form (Employee’s Withholding Allowance Certificate). Where can amount this be found? In the Federal W4 Information section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Federal W4 Information section

  23. Form Additional State Tax Enter the biweekly amount of additional state tax to be withheld from gross pay, claimed on the employee’s W-4MN form (Employee Withholding Allowance Certificate). Where can this be amount be found? In the State W4 Information section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, State W4 Information section.

  24. Form Biweekly Federal Tax The amount of federal tax that is withheld. Net Pay Calculator calculates this amount.

  25. Form Biweekly State Tax The amount of state tax that is withheld. Net Pay Calculator calculates this amount

  26. Form FWT Taxable Gross Federal withholding tax taxable gross Total amount of biweekly wages and other compensation subject to federal tax withholding Net Pay Calculator calculates this amount.

  27. Form SWT Taxable Gross (MN) State withholding tax taxable gross (MN) Total amount of biweekly wages and other compensation subject to Minnesota state tax withholding Net Pay Calculator calculates this amount.

  28. Form (1=MED, 2=FICA, 3=NONE) Enter FICA/Medicare status. • Enter “1” if subject to Medicare tax only. • Enter “2” if subject to FICA and Medicare tax. • Enter “3” if subject to neither FICA nor Medicare tax. Where can this status be found? In the Taxes section of the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, Taxes section. In the Taxes section, if there is an amount for Fed MED/EE (Medicare), enter “1.” If there is an amount for Fed MED/EE and Fed OASDI/EE (FICA), enter “2.” If neither Fed MED/EE nor Fed OASDI/EE display, enter “3.”

  29. Form Retirement % Employee Enter the percentage that is used to calculate the retirement deduction. Where can this percentage be found? Payroll/HR staff: • Employee’s retirement plan: Payroll > Deductions > Retirement Plans.Note the Benefit Plan, such as AA or AB. • Percentage for the Benefit Plan: Set Up HRMS > Payroll Setup > Deduction > Retirement Plan Table. Note the Employee Contribution Percent.

  30. Form Supplemental Retire % Employee Enter the percent deducted for supplemental retirement. Generally, only employees who have teachers retirement have supplemental retirement. Where can this percentage be found? Payroll/HR staff: • Set Up HRMS > Payroll Setup > Deduction > Savings Plan Table. • Type or select Plan Type 4M and a Benefit Plan. • See the Before-Tax percentage on the Employee Limit on Investments page.

  31. Form Retirement Gross Wages subject to retirement. Net Pay Calculator calculates this amount.

  32. Form Retirement Gross Adj. Regular Enter an adjustment to change retirement gross. When do you do this? Enter a negative amount only if there is an entry in the Retirement Gross field and part of the amount is not subject to retirement, e.g., some severance pay is not subject to retirement. Where can this information be found? Payroll staff: Set Up HRMS > Payroll Setup > Earnings > Earnings Table, Special Process page. Earnings are subject to retirement if Accumulator Code = RET and Effect on Special Balance = A.

  33. Form Retirement Gross Adj. Supp Enter the amount to adjust earnings subject to supplemental retirement. When do you do this? Enter a negative amount only if there is an entry in the Retirement Gross field and part of the amount is not subject to retirement. Generally, only employees who have teachers retirement have supplemental retirement. Where can this amount be found? Payroll staff: Same amount that was entered in the Retirement Gross Adj. Regular field.

  34. Form Supplemental Retire Gross Enter the amount of wages subject to supplemental retirement. Generally, only employees who have teachers retirement deductions have supplemental retirement. Where can this amount be found? Payroll staff: Payroll > Pay Distribution > Review Paycheck, Special Accumulator RET. Multiply the RET earnings by the percentage in the Supplemental Retire % Emple field. • If the result equals the deduction amount of the before-tax deduction (deduction code RSS_ _ _ on Paycheck Deductions), enter RET earnings in the Supplemental Retire Gross field. • If the result does not equal the deduction amount, divide the deduction amount by the percentage entered in the Supplemental Retire % Emple field. Enter the result in the Supplemental Retire Gross field.

  35. Form Retirement Ded-Employee Amount of retirement deducted from the employee’s pay Net Pay Calculator calculates this amount.

  36. Form Retirement-Supp Ded-Employee Amount of supplemental retirement deducted from the employee’s pay Net Pay Calculator calculates this amount.

  37. Form Retirement Refunds Used by Statewide Payroll Services only. Do not enter anything in this field.

  38. Form Retirement-BB-Employee Used by Statewide Payroll Services only Do not enter anything in this field.

  39. Form FICA Gross Amount of wages subject to FICA An amount appears here if the number “2” was entered in the field 1=MED,2=FICA,3=NONE. Net Pay Calculator calculates this amount.

  40. Form FICA Gross Adjustment Enter an adjustment amount to reduce the FICA gross. Do this only if the earnings are not subject to FICA. Rarely Used: Most earnings are subject to FICA. Where can this information be found? Payroll staff: Set Up HRMS > Payroll Setup > Earnings > Earnings Table, Taxes page. The Subject to FICA box is checked if earnings are subject to FICA.

  41. Form FICA Gross YTD Enter the FICA gross year-to-date amount from the previous paystub. Rarely Used: Necessary only if FICA Gross YTD exceeds the maximum . Where can this information be found? In the Gross to Net Information section on the paystub. Under the FICA Gross column, use the YTD amount.

  42. Form FICA Tax Employee Amount of FICA tax that is deducted. Net Pay Calculator calculates this amount. FICA Gross X 6.2% = FICA Tax

  43. Form Medicare Gross Amount of wages subject to Medicare. An amount appears here if the number “1” or “2” was entered in the field 1=MED,2=FICA,3=NONE. Net Pay Calculator calculates this amount.

  44. Form Medicare Gross Adjustment Enter an adjustment amount to reduce the Medicare gross. Necessary only if the earnings are not subject to FICA. Rarely Used: Most earnings are subject to FICA. Where can this information be found? Payroll staff: Set Up HRMS > Payroll Setup > Earnings > Earnings Table, Taxes page. The Subject to FICA box is checked if earnings are subject to Medicare.

  45. Form Medicare Gross YTD Enter the Medicare gross year-to-date amount from the previous paystub. Necessary only if Medicare Gross + Medicare Gross YTD may be greater than $200,000. Rarely Used: The portion of annual earnings greater than $200,000 is subject to an additional 0.9% Medicare tax. Where can this information be found? In the Gross to Net Information section on the paystub. Under the Medicare Gross column, use the YTD amount.

  46. Form Medicare Tax Employee Amount of Medicare tax that is deducted. Net Pay Calculator calculates this amount. Medicare Gross X 1.45% = Medicare Tax

  47. Form Additional Medicare Tax If applicable, the additional amount of Medicare tax that is deducted on the portion of earnings greater than $200,000. Net Pay Calculator calculates this amount as follows: 1. Medicare Gross + Medicare YTD = Total Medicare 2. Total Medicare - $200,000 = Amount taxed at additional rate 3. Amount taxed at additional rateX 0.9% = Additional Medicare Tax Reminder: Medicare Gross is from the current paystub, and Medicare YTD is from the previous paystub.

  48. Form Total Biweekly Taxes + Biweekly Federal Tax + Biweekly State Tax + FICA Tax Employee + Medicare Tax Employee = Total Biweekly Taxes Net Pay Calculator calculates this amount.

  49. Form Total Before-Tax Deductions + Deferred compensation + Converted leave deduction + Before-tax insurance (employee-paid health & dental) + Depend-MedExp/Park/Bus/Van/HCSP/HSA + Retirement deduction = Total Before-Tax Deductions Net Pay Calculator calculates this amount.

  50. Form Total After-Tax Deductions Enter the biweekly total of all after-tax deductions + Union dues + Charity deductions + Deferred compensation (ROTH) + Long term care insurance + Other after-tax insurance = Total After-Tax Deductions Where can this total be found? In the After-Tax Deductions section on the paystub. Payroll staff: Payroll > Pay Distribution > Paystub, After-Tax Deductions section.