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Product support for the Creative Solutions Accounting platform ended on September 30, 2020.

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The application calculates liability by pay item using the department totals rather than company totals. Allocating by company totals can give an inaccurate report; pay items could be FUTA or SUTA exempt in some departments, for example, or over the limit in other departments. Therefore, CSA allocates subtotals according to the percentage of the department totals.

To illustrate, let's take a look at the allocations for FICA-MED for the Other Wages pay item in a Liability by Pay Item report. In this example, the Other Wages pay item is used only in the Grocery staff and Office staff departments.

Examples

The following formula is used to calculate the allocation for tax amounts.

In the Grocery staff department, the Other wages total ($440.00) is 47.83 percent of the pay item totals ($920.00). We then calculate that 47.83 percent of the total FICA-MED for Grocery staff ($13.34) is $6.38.

In the Office staff department, the Other wages total ($812.50) is 37.40 percent of the pay item totals for the department ($2172.50). We then calculate that 37.40 percent of the total FICA-MED for the Office staff department ($29.72) is $11.12.

Adding those totals, we find that

$6.38

+$11.12

=$17.50

This is reflected in the amount calculated by the application for All Departments.

If, however, we calculate the total for all departments allocating by company totals instead, we see that the Other Wages total($1252.50) is 13.36 percent of all pay items. We then calculate that 13.36 percent of the FICA-MED total ($131.68) would come out to $17.60, slightly off from our original (and more accurate) calculation of 17.50.

See also: Liability by Pay Item Report

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