July 23, 2020
When an employee passed away during our eight-week period, we split up his duties to other current employees and gave out raises that pushed two employees over the $100,000 limit (annually). Do I use my last payroll (for the eight-week period) to calculate their costs?
Posted by Armanino Financial Advisory Team
No. To calculate payroll costs, add up the total amount paid to your employees during the Covered Period you choose. Apply the maximum limit threshold explained elsewhere where necessary. Then add in any employer payments made for health insurance, retirement benefits or state/local taxes on compensation. Do not simply take the last payroll and multiply by eight.