Paychex Incorporated

★★☆☆☆

About Paychex Incorporated

Finance

Finance
More choices in Chicago:
Resultset_next

login Tony Garcia, CPA - Accounting in Chicago, IL

10716 South Ewing Avenue Chicago, IL

Resultset_next

Lemay, John R, Cpa - John R Le May & Assoc

2000 N Racine Ave Chicago, IL

2.0 1
Hi! Sign in to let us know how Paychex Incorporated was?
Write a Review
.

I have a small company that's been through three payroll processors. Paychex is our fourth. None of them have been able to handle the simplest deviation from regular payroll: An occassional bonus.

I'm a programmer, not an accountant. But I can google the IRS and I know that "supplemental income" is handled as described in "Circular E". There are two ways to calculate withholding on a bonus. 1) Project annual pay based on regular salary plus any bonuses to date and calculate the withholding on that amount. Then add the current period's bonus and calculate withholding on that amount. The withholding on the bonus is the difference between the two. Or 2) Use a flat rate (as specified in Circular E) and apply it to the bonus regardless of the employee's tax bracket.

Why can't the payroll companies like Paychex figure this out? They insist on doing one of two things: 1) Add the bonus to the current paycheck and treat it like a regular paycheck. Problem is if you get a $1000 bonus twice per year but get paid 26 times per year, it will look like you get $24,000 more per year than you really do, which may kick you into a higher bracket and affect the withholding on the bonus. Or, 2) Treat the bonus like a regular paycheck. So they take your $100 bonus, figure you get paid $100 every pay period (say, biweekly), then figure taxes on that amount. Unfortunately, there's almost no tax on $2600/year income, especially after you take out a couple exemptions. So no tax will be withheld.

Paychex has switched account reps on us four times in two years. Every time we pay a bonus I have to educate a rep, even if I educated the same rep last time. Everything else they do is fine but they simply can't handle anything out of the ordinary.

2
★★☆☆☆

I have a small company that's been through three payroll processors. Paychex is our fourth. None of them have been able to handle the simplest deviation from regular payroll: An occassional bonus.

I'm a programmer, not an accountant. But I can google the IRS and I know that "supplemental income" is handled as described in "Circular E". There are two ways to calculate withholding on a bonus. 1) Project annual pay based on regular salary plus any bonuses to date and calculate the withholding on that amount. Then add the current period's bonus and calculate withholding on that amount. The withholding on the bonus is the difference between the two. Or 2) Use a flat rate (as specified in Circular E) and apply it to the bonus regardless of the employee's tax bracket.

Why can't the payroll companies like Paychex figure this out? They insist on doing one of two things: 1) Add the bonus to the current paycheck and treat it like a regular paycheck. Problem is if you get a $1000 bonus twice per year but get paid 26 times per year, it will look like you get $24,000 more per year than you really do, which may kick you into a higher bracket and affect the withholding on the bonus. Or, 2) Treat the bonus like a regular paycheck. So they take your $100 bonus, figure you get paid $100 every pay period (say, biweekly), then figure taxes on that amount. Unfortunately, there's almost no tax on $2600/year income, especially after you take out a couple exemptions. So no tax will be withheld.

Paychex has switched account reps on us four times in two years. Every time we pay a bonus I have to educate a rep, even if I educated the same rep last time. Everything else they do is fine but they simply can't handle anything out of the ordinary.

Was this review helpful to you?
Ratings_icons Ratings_icons

 

Wait, you're the expert.

If you've been to or used Paychex Incorporated, leave a review.

It's easy, only takes a couple of minutes and you'll help thousands make an informed decision.



Write a Review