Title: Allegheny Pennsylvania Employer Training Memo — Payroll Deductions: A Comprehensive Guide for Employers and Employees Introduction: In Allegheny, Pennsylvania, employers are required to adhere to certain guidelines when it comes to payroll deductions for their employees. This comprehensive memo aims to educate both employers and employees about the different aspects of payroll deductions, ensuring compliance with state and federal laws. 1. What are Payroll Deductions? Payroll deductions refer to the amounts withheld from an employee's paycheck to cover legally mandated or voluntary expenses. There are various types of payroll deductions an employer may need to consider, including taxes, insurance premiums, retirement contributions, loan repayments, and other authorized deductions. 2. Federal and State Tax Withholding: Employers must calculate and withhold federal income tax, Social Security tax, and Medicare tax from employees' paychecks according to the applicable rates. Similarly, Pennsylvania residents are subject to state income tax, and employers need to deduct the appropriate amount based on the state's tax brackets. 3. Social Security and Medicare Contributions: Both employers and employees are responsible for paying a portion of their employees' Social Security and Medicare taxes. Employers must calculate and withhold these taxes based on the employee's wages, while employees are required to contribute their share towards these federal programs. 4. Health Insurance Premiums: Some employers offer health insurance plans to their employees, and the premiums for these plans are deducted from employees' paychecks. Employers need to provide clear information about the deduction amount, coverage details, and any necessary enrollment forms employees must complete. 5. Retirement Contributions: If an employer offers retirement plans, such as a 401(k) or pension plan, employees may voluntarily opt to contribute a portion of their salary towards their retirement savings. Employers need to facilitate these contributions, ensuring accurate deductions and timely fund transfers. 6. Loan Repayments: In some cases, employees may request payroll deductions to repay loans, such as student loans or advances taken from employers. Employers need to establish agreements and deduct the agreed-upon amount from employees' paychecks, ensuring compliance with applicable laws and regulations. 7. Garnishments and Legal Deductions: In certain situations, employers might receive court orders to withhold a portion of an employee's wages for various legal reasons, including child support, alimony payments, or tax debts. Employers must follow these court orders diligently, providing regular reports and ensuring timely deductions. 8. Reimbursements, Advances, and Overpayments: Occasionally, an employer might owe an employee money due to a reimbursement, advance, or salary overpayment. Employers need to establish appropriate procedures to manage such situations, including deduction repayment plans or corrective actions. Conclusion: Employers in Allegheny, Pennsylvania, are required to manage payroll deductions accurately and efficiently. This employer training memo provides a broad understanding of payroll deductions, ensuring employers and employees comply with state and federal laws. By effectively managing payroll deductions, employers can contribute to a smooth and transparent employment relationship while ensuring adherence to legal obligations.
Allegheny Pennsylvania Employer Training Memo - Payroll Deductions
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What Can Be Deducted From Employee Wages? Payroll taxes; Retirement plan contributions; Social security contributions; Benefit plan contributions, such as the employee portion of health insurance premiums; Other items for the employee's benefit or for which the employee gives written consent, such as union dues;
Social security tax. 401(k) contributions. Wage garnishments. Child support payments.
Pre-tax deductions: Medical and dental benefits, 401(k) retirement plans (for federal and most state income taxes) and group-term life insurance. Mandatory deductions: Federal and state income tax, FICA taxes, and wage garnishments. Post-tax deductions: Garnishments, Roth IRA retirement plans and charitable donations.
Some mandatory payroll tax deductions that employers are required by law to withhold from an employee's paycheck include: Federal income tax withholding. Social Security & Medicare taxes also known as FICA taxes. State income tax withholding.
Social Security tax is 6.2% of an employee's income if it is at or below the Social Security wage base. Medicare tax is 1.45% of the employee's Medicare taxable wages. The total deduction for FICA is 7.65% from an employee's paycheck. As the employer, you must also pay a 7.65% contribution.
The standard payroll deductions are those that are required by law. They include federal income tax, Social Security, Medicare, state income tax, and court-ordered garnishments.
Employers can only deduct money for training courses if it was agreed in the contract or in writing beforehand. For example, an employer could ask someone to agree in writing before a training course to pay back costs if they leave within 6 months.
Mandatory payroll deductions are the wages that are withheld from your paycheck to meet income tax and other required obligations. Voluntary payroll deductions are the payments you make to retirement plan contributions, health and life insurance premiums, savings programs and before-tax health savings plans.
Allowable Paycheck Deductions Personal loans (cash advances, 401(k) or retirement loan payment, bail or bond payments, etc.) Personal purchases of a business's goods or services such as: Food purchases from the cafeteria.Employee's health, dental, vision, and other insurance payments or co-payments.