Allocation by department totals example

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Important reminder!

Licenses for Payroll CS, Trial Balance CS, and Write-Up CS (but not Engagement CS) permanently expired on March 1, 2017.

For details, see CSA license expiration 2017 – frequently asked questions.

Some processes documented in the Help & How-To Center are no longer applicable, due to the discontinuation of these CSA modules.

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.

/_images/acct_pr/csa/liability_formula.gif

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.

/_images/acct_pr/csa/liability_grocery_staff.gif

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.

/_images/acct_pr/csa/liability_office_staff.gif

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.

/_images/acct_pr/csa/liability_all_depts.gif

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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