The current system calculates the state unemployment tax for each employee during payroll processing. This calculated liability amount is entered into the the employees master file. This creates a problem with the quarterly tax reports. Since you rarely, if ever, receive the current year updated unemployment tax rate prior to completing one or more payrolls, your year to date tax liability totals are incorrect. When you run the quarterly tax reports, the quarter to date calculates based on the date the tax rate takes effect. However, it pulls the year to date total from the employee master file, which is based on a prior year rate. This creates a discrepancy between the actual YTD unemployment figure and the correctly calculated quarterly figure. They system should calculate the employment tax liability based on the rate in effect for the current period/year for both the current quarter and year to date. Currently the only solution is to go into each employee master file, change the system calculated liability amount to the correct number for each month. This is both tedious and time consuming. Unless I want to invest the hours/days necessary to correct each record, the quarterly tax reports year to date liability totals will always be wrong. One simple solution is to have a system utility that allows the user to correct this situation automatically by running a program to adjust the employee master file with the current effective rate. Otherwise, these YTD numbers are useless since they were calculated incorrectly and don't reflect the actual state unemployment tax liability.

by: Gerald Z. | over a year ago | Payroll / Job Cost