Why is the net pay in my off-cycle payroll off by a few cents?

Payroll admins: I’m about to save you like an hour of pulling your hair out.

Have you ever had to run an off-cycle payroll based on a regular check?

Depending on your payroll provider, some types of payments aren’t available through regular payroll, so you have to process them off-cycle. 

You run a draft payroll the regular way to get the numbers, enter the gross pay into an off-cycle payroll, and... 

...it spits out a number that’s off by 17¢ from what regular payroll said. 

Why? Whyyyyy?

You’re a detail-oriented person so you check each line on the two drafts.

SUI is off by 3¢. 

SIT is off by 6¢. 

FICA is off by 8¢. 

Why? Why is this happening to you? It makes no sense. Are you going crazy? 

You'll be fired for this, for sure. They'll run you out on a rail. Will you ever even work again? 

I have a very disappointing answer for you: It’s rounding. 

Rounding.

Tax calculations involve dividing oddball numbers into other ugly numbers. The results often go out several decimal places. There are several steps that depend on other steps. 

Each of those steps rounds somewhere. 

Add enough of them together with large enough amounts and voilà. 

You get a result that’s off by a few cents.

That’s all. Take a little walk. It’s going to be okay.

---

Does managing payroll make you want to throw your laptop out the window? Save a laptop (and your sanity). Let us help.

Let's Talk