Why do I occasionally notice penny differences?

A variety of circumstances can cause temporary penny discrepancies:

• For example, a report might show a penny difference between the amounts owed by the employer and the employee for a tax where these amounts should be identical.
• You might also notice a difference of a few pennies between a report and a tax form.

These discrepancies are due to rounding during paycheck calculations.

Slight rounding on individual paychecks

During a pay period, for example, we do the tax calculation on each individual paycheck. Slight rounding for each paycheck can add up to several pennies over the entire tax period.

At the end of the period, when you use our service to make a payment, we add up the total wages and calculate the tax for the period, which minimizes rounding. We then update the reports. Because of this, you might notice slight differences between reports and tax forms before the end of a payroll cycle.

Larger differences

Larger differences can occur if you have changed the tax exemption status of an employee. We recalculate your tax for the entire tax period when you create the payment. You will see the correct amount on the Approve Payment screen. We will also update all reports with the approved payment amount.

You don't need to worry if you see a report that indicates that you owe $.01 in tax or if you write a check for a tax payment that is off by pennies. The government understands rounding discrepancies and ignores penny differences.

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