About self-adjusting taxes in Payroll

unavailable in ajeraCore unless you have the Payroll add-on

In Ajera, some taxes self-adjust to ensure that the accumulated tax withheld is always correct for the year-to-date (YTD).

A self-adjusting tax is any tax set up with a wage limit amount, such as Federal Unemployment Tax, Social Security, and State Unemployment.

For example, Social Security tax has a wage limit. Each time Ajera calculates this tax, it confirms that enough tax is withheld by testing the accumulated tax withheld for the year-to-date. If needed, it then automatically self-adjusts the amount of tax withheld. Because Ajera corrects over-withholding or under-withholding each time it calculates self-adjusting taxes, adjustments can occur on more than one check.

Example

An employee's starting balances for YTD subject-to taxes are incorrect. Social Security YTD taxes are under-withheld by $5.00 because of an incorrect starting balance for the employee. To correct the YTD total, Ajera automatically withholds $5.00 more than normal on the next check.