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Adjusting withholding for paycheck true-up

A start-up needed to drop employees down to minimum wage for 6 months. Now the company wants to pay the difference between the employees normal wages and minimum wage for the 6 months. This will result in large paychecks that will result in larger than normal withholding for the employees. Is there a way to avoid this? This is essentially back pay that would be normally spread out over 6 months.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Why not calculate what payroll would have been for 6 months. Then based on the IRS/State tax tables, calc what taxes would have been.

Subtract what was already paid and that is the amount you will subtract from the catch-up check. Remember FICA/MED has no effect... so calculate normally (if they go over the FICA max, they go over... and you stop calculating FICA)

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