Conference 7.286::digital

John,

Sometime in the last month or so, there was a blurb on my stub about the
FICA amount being wrong and that it would be corrected soon.

Bob

I can't help with the FICA changing, but there is a way to make it easier
to keep your checkbook balanced, if you have a savings deduction.

Most people seem to withhold a fixed amount for savings, and have the net
deposited into checking.  Thus whenever the paycheck varies, the net
changes and therefore your checking deposit.

I do it the other way - I have a fixed amount deposited into checking and
the net goes into savings (which I don't maintain an exact balance).  Thus
my checking deposit is fixed and I never have to check my paystub to see
how much went in this week.

FWIW,

John

    You're not the only one.  I've noticed the same thing -- never more
    than 2 or 3�.  Let us know what personnel comes up with.  They had
    "corrected" things to the penny, and I thought it would stop, but they
    started right up again.
    
    RE: net to savings...I wish.  DCU told me that that they can't do that,
    because DEC won't/can't route direct deposit to anything but a checking
    account.
    
    Tim

	I'm semi-glad :-) that someone else other than myself is
	experiencing this problem..  I too was fortunate to receive
	a raise around the first of the year, and ever since, it's
	been a pain..  Looking at the pay stubs, it does appear 
	that the penny difference is in the FICA section.

	I've warned my wife to be on the lookout for this when she
	balances the check book...  The first month it was HELL for
	both of us..  Took us both about 1-2 hours to find a lousy
	$.02..  Up till now, when you got a review, and the pay 
	changed, it was set until the next time.. So, we said,
	"Fine.. The pay will be XXX", and we enter the amount on a
	weekly basis.. 

	Now I actually have to look at the pay stub...  :-)

    There was a blurb on my payroll statement about a month ago saying that
    payroll would adjust the FICA withholdings weekly to ensure that the
    total FICA withholdings EXACTLY matches what is required. Sounds like
    unnecessary busy work to me but then that's DEC :^).
    
                                   JL

It has nothing to do with raises.  It's probably been happening to all U.S.
employees since the start of the year.  It may have to do with the way FICA
has been split into two parts with different upper limits.  If each part is
calculated as (FICA_wages_YTD*rate)-(last_week's_FICA_YTD), then each part
can vary by one cent.

    It's not limited to Digital. My wife works for Eastman Kodak and
    sure enough her's bounces every week too.
    
    Jim

    This is the first time I've responded to a notes file, so I hope this
    works...  Regarding the fluctuating FICA amount on paycheck stubs, I
    was told by Digital's Payroll department the reason the FICA amount
    changes by a few cents each week is due to a new software system they
    are using that "self adjusts" (?) the amount each week to make the
    amount of FICA being taken out more "exact".  They informed me that the
    fluctuating amount will continue since this is a more "accurate" way of
    figuring how much FICA should be taken out.
    
    I agree with the previous notes, it does make it difficult to balance
    your check book, but unfortunately it looks like this is the way it's
    gonna be.

    The government is getting every penny it can from us; now that the 
    FICA is split in two parts, there would be even more round-off or
    truncation error if they just paid us the same amount each week.
    
    If they let us all keep the extra 1/2 cent each week (rather than
    taking an entire cent from us the following week), they'd lose
    100 million workers * 52 weeks * 1/2 cent = $26,000,000.  That pays
    for a lot of boondoggles and pork by congress.

    See if you can follow this:
    
    
    1)	Previous         	This         	New
    	YTD           	+       Weeks       =   YTD
    	Gross Earnings          Gross Earn.     Gross Earnings
    
    
    2)	New               	FICA         	New
    	YTD           	*       Tax    	    =   YTD
    	Gross Earnings          Percent         FICA Tax
    
    
    3)	New                     Previous        This 
    	YTD     	-	YTD         =	Weeks
    	FICA Tax                FICA Tax        FICA Tax
    
    
    This approach to calculating FICA (automatically) compensates for
    fractions of a penny.  This may also cause each week's check to vary
    from one week to the next.
    
    	Don

    And one of those pieces has no maximum !
    
    FICA will hit the hi-rollers for ever now ! That's a little
    consolation.
    
    Lloyd

	For four and one half months my paycheck and deductions remained 
	the same.  Two weeks ago the amount went down by a penny.  Last week 
	it was back to the old amount.  That's a lot small fractions to 
	add up to 1 penny more of FICA.  

	You know, there is a very old programming scam (I think they 
	teach in High School programming).  A bank or other money handling 
	routine programmer funnels fractions of pennies to accounts the 
	programmer has access to.  I have heard 'stories' of a welfare 
	system programmer sending the change to multiple accounts and then 
	collecting for those people.  It doen't take a lot of imagination 
	or math skills to calculate the value of .01 times the number of US
	employees times how many times per year this occurs.  

	As the lottery commercial says, "Just imagine the feeling...."

If your checkbook is off a 1/2 cent every week, that adds up to 26 cents over a
year. In 20 years that will come to $5.20. Whoopee. I can never get my checkbook
to balance closer than a few cents anyway, so I can't get excited over all this.

Bruce 

	... matter! :>)  The FICA is now divided into two parts, the re-
tirement fund and the Medicare fund.  If I remember correctly, the retire-
ment portion of the 7.65% is about 6.5%, Medicare the rest. The retirement
side keeps the ~$52K cap on taxable earnings, the Medicare side goes to
~$125K.

	So, if you're used to seeing your net pay increase in October or
November, it won't increase quite as much as before this year!

    re .13
    
    but some of us won't rest until the ledger balances EXACTLY.
    
    t.

Because as stated in other replies, once it's off, you can't tell without
a lot of trouble who is scamming you. Frankly I think this is extremely
inconvenient and it would be much preferrable to have a single adjustment
made on the last paycheck of the year.

erik

    I would like to applogize to all my fellow DECers, as I feel partially
    responsible for this FICA problem.  If DEC were now paying it's
    employees every other week, maybe this penny up, penny down would have
    worked itself out.  As an opponant of bi-weekly pay, I feel a sense of
    guilt.
    
    Mark
    
    Then again, could this be pay-rolls revenge.  Naaaa, I guess I'm just
    paranoid these days.

Re: .3:
       
>    RE: net to savings...I wish.  DCU told me that that they can't do that,
>    because DEC won't/can't route direct deposit to anything but a checking
>    account.
    
    I wasn't suggesting a theoretical method - I've been depositing my net
    to savings in the DCU for 4-5 years.  Maybe you should try a different
    DCU office...
    
    It does work.
    
    John

The following is the official word my group got on this matter several weeks
ago.  The basic idea of certain previous noters is correct, the FICA fund
has two parts, calculated on separate bases.
To wit:

Subj:	PAYCHECK AMOUNT DIFFERENCES EXPLAINED

A number of you have asked me why their paychecks have varying amounts
each week.  Payroll has explained that these are due to the fact that the
FICA amount is now a self-adjusting system reported to the government in 2
pieces - one to Medicare and one to Social Security.  For a detailed 
explaination please see below:

-----------------------------------------------------------------------------

 1991 FICA contribution changes 

  On 05-Nov., President Bush signed the Omnibus Budget Reconciliation Act 
  of 1990 (OBRA).  Among those provisions has come changes in the 1991 
  FICA Tax contributions.

  In previous years, the Social Security and the Medicare Hospital Insurance 
  contributions had the same wage base in calculating the percentage of the 
  contribution. 

  EXAMPLE:
  For 1990 the FICA Contributions were:

  Social Security (OASDI)       6.20% of $51,300   or $3180.60
  Medicare Hospital Ins.(HI)    1.45% of $51,300   or $ 743.85
  Total FICA Contribution       7.65% of $51,300   or $3924.45

  Effective on 01-Jan.-1991, the wage base will be different for each program.

  EXAMPLE:
  For 1991 the FICA Contributions will be:

  Social Security (OASDI)      6.20% of $53,400   or $3,310.80
  Medicare Hospital Ins.(HI)   1.45% of $125,000  or $1,812.50
  Total FICA Contribution                                      $5,123.30

  For those employees whose total wages are $53,400 or less, the FICA
  percentage will remain at 7.65%.  For those employees whose total wages are 
  more than $53,400, the Medicare Hospital Insurance percentage of 1.45% will 
  continue on wages up to $125,000.

  These changes will, of course, require modifications to the Payroll system.
  FICA withholdings for 1991-affected payments, made prior to the implementation
  of system changes, will be adjusted during the calendar year.

Since the net pay varies by 2 cents, it's clear that payroll is treating the
two parts of FICA separately.  If they treated them as one item, where the
first 53,400 was taxed at 7.65% and the next 71,600 was taxed at 1.45%, it
would only vary by 1 cent.

    It seems amazing to me that so many people could have already passed
    the $53,400 income point this early in the year.
    
    Also, something doesn't seem to wash here.  If you multiply your gross
    weekly earnings by the percentages given -.x seems like every weeks'
    result should be the same, except of course on the week when you exceed
    the $53,400 point.  Then every week after that should be the same
    number.  Exactly where is that extra penny or two going?
    
    JC
    

	... exceeded $53K by this time?????  All everyone is saying is
that their checks vary a penney or so every couple of weeks.

	The problem, IMHO, is the fact that by dividing the already arcane
7.65% into two parts, you introduce "rounding" variance, which is made up
by the penny every so often.

	Now, if and when the retirement portion drops off, then the deduc-
tion should stabilize in a week or so.

    Re .21:
    
    Yes, X * .0765 is the same every time.  But the thing is, X * .0765
    might be some number that has fractions of a penny in it.  For example,
    if a person's taxable pay is $111, then $111 times .0765 is 8 dollars,
    49 cents, and 15/100 of a cent.  Digital can't deduct 8.4915 dollars,
    so it just deducts 8.49 dollars.
    
    Now if that were done every week, the government would be shy by almost
    eight cents at the end of the year.  If that happened with a hundred
    thousand employees, it would be eight thousand dollars, and the
    government would want to know where that eight thousand dollars went.
    
    A way to correct that problem is to take one's total taxable pay for
    the year so far and multiply it by .0765.  That gives the amount of
    this tax that the person should have paid so far.  Then we subtract the
    amount of this tax they have paid so far.  The result is the amount to
    be withheld this week.  In effect, this calculation adds up the
    fractions of pennies from week to week until they add up to enough to
    deduct another penny from the person -- and so their withholding
    changes by a penny that week.  It changes by two pennies if both the
    taxes in the FICA category go up or down at the same time.
    
    By the way, when I checked the withholding last year, Digital had, by
    the end of the year, withheld about ten cents more than the percentage
    would indicate Digital should have.
    
    
    				-- edp

	Between another half answer from Personel, a suggested answer 
	from my supervisor and the previous responses to this note I
	can rest assured that I have the definitive answer.

	Thanks to everyone for their help.

	Note: SSP = Social Security Pension
	Values shown on the pay stub are shown like this:  	<Name>
	Values NOT shown on the pay stub are shown like this:	{Name}

	<Current Adj. Gross Earnings> = <Current Gross Earnings> - 
		<Voluntary Deduction: Medical>

	<YTD Adj. Gross Earnings> = {Previous YTD Adj. Gross Earnings} + 
		<Current Adj. Gross Earnings>

	<YTD FICA Wages> = <YTD Adj. Gross Earnings> LIMITED TO {$54,400.00}

	{YTD Medicare Wages} = <YTD Adj. Gross Earnings> LIMITED TO {$125,000.00}

	{YTD SSP Tax} = (<YTD FICA Wages> * {6.2%}) ROUNDED TO 2 PLACES

	{YTD Medicare Tax} = (<YTD Medicare Wages> * {1.45%}) ROUNDED TO 2 PLACES

	<YTD FICA Tax> = {YTD SSP Tax} + {YTD Medicare Tax}

	<Current FICA Tax> = <YTD FICA Tax> - {Previous YTD FICA Tax}

  The "bobble" is caused by calculating Current values FICA tax from
  the YTD values instead of the old method of calculating Current 
  and adding that to Previous YTD to get New YTD.  This combines with
  the fact that SSP and Medicare taxes are rounded separately to cause
  an occasional jump by 2 instead of 1.

Re: various

Q.  Is this up/down flucuation going to continue?

    I'm a resident-type F/S person and I can't be in the office each
    payday to get my stub.  Since I'm WC4 I get the same pay each week.

    Yes, I like to keep my checkbook correct to the penny so I can tell
    if somthing has gone amiss somewhere. I spent a length of time a week
    ago trying to find the 2 cent error in my math.

Suggestion #1:

    Don't mess around with the FICA every few paychecks- save all the
    fractional bits to the last paystub of the year and do all the penny
    jockeying on that check.

Suggestion #2: (which I will post in the DCU notesfile)

    Modify DCU touchtone system to let users make queries about checks
    and deposits. For checks, by entering the check nubmer. For deposits,
    by entering the deposit date. My local bank offers some of that
    functionality. Then us type with direct DCU deposit that can't grab
    our stubs the day they arrive would be happy.

    Lee
              

The problem with suggestion #1 is that you may not be here at the end of
the year.

Hi All,

"Listening" to the discussion, it sounds like most of you find the "penny 
up/down game" more trouble than it's worth (with a few exceptions).

For all those of you who really don't care about that .26, I have a great
idea!  I want you to go to the DCU and put that .26 into MY savings account.

I promise you that *I* will cherish, norish, and worry over that .26 like you
never could imagine.  In fact, if enough of you come through, I will even send
you a trip report.

Barb ;)

p.s. Hi Bruce, I expect you to be first in line.

    [apologoes if someone said this already - I didn't have the patience
     to read ALL replies]
    
    
    When I called Payroll to complain/inquire, I was told that new Federal
    laws REQUIRE Digital to do this wobbly calculation. This wasn't some
    neat idea we had, it was foist upon us.  Sounds believable to me.
    
    	/Marvin

    I just talked to DCU...they said that up until about 2 years ago, you
    could have your net pay deposited to savings.  Then DEC payroll
    "changed the system" and can no longer do this.  Existing users at that
    time were grandfathered (which implies they still can do it, but just
    don't want to).
    
    Tim

    re: 0
    
    I checked my pay stubs for the year thus far and the deduction for FICA
    has not wobbled at all.  Perhaps I don't make enough for the variance
    per week to add up to a penny yet!
    
    Irving

re .30:

What matters is whether your weekly salary times 1.45% and your weekly salary
times 6.2% is a whole number of cents.  You could make $20 a week or $2000
a week and your FICA wouldn't wobble.  But if you made $20.01 a week, it would.

Re: .0

>>>	Since receiving a raise in March (1991) I have had a problem
>>>	with my FICA tax going up and down by a penny or two each
>>>	week. 

>>>	Not knowing what my pay will be from week to week is making it 
>>>	hard to keep my checkbook straight!

	Just be glad you weren't on international assignment from the US
	to Valbonne pre-1985.  Our paychecks were calculated on a home
	country compensation plan such that US FICA was deducted as part
	of our French salary calculations.  However, we later found out that 
	the money was not actually paid to the US Social Security system
	as we had been led to believe.  As a result, people lost as much as 
	FIVE YEARS US FICA CONTRIBUTIONS which can never be directly recovered
	because of the IRS tax status of the subsidiary at the time.  
	Our paychecks were therefore reduced by several percent each month
	for the money which we thought was going to US FICA.  (This issue
	is still pending resolution.)

	In the spirit of trying to keep things in perspective, I hope that
	no one is losing any sleep over fractions of a penny.

		- ken

	I contacted the Direct Deposit people (NIKON::DIR_DEPOSIT) and
	they say that they are working toward allowing direct deposit
	to Savings accounts.

	In the mean time, I've opened a second checking account and
	have set up an automatic transfer from my direct-deposited
	checking account to the second checking account.

	My direct-deposit checking account now acts as a buffer
	for variable pay checks (every Thursday), annually
	adjusted direct withdrawl mortgage payments (early in the 
	month) and direct withdrawl car payment (mid-month). 

	The new "general use" checking account has a nice neet
	chunk of cash deposited on the first every month.  This 
	will greatly simplify my record keeping.

	The FICA bobble no longer figures into my "general use"
	checking account balance.

	My thanks to John Wood for the idea (he uses direct-deposit
	to savings... a feature not currently supported).

    
    This is amazing.  When I joined the company 10 years ago, they were
    "working" on allowing direct deposit to savings accounts.  At the time,
    the only way to get this to work was through DCU.  But, for those of us
    who don't care about using DCU, this is still a problem.
    
    By going direct to savings, you don't have to track it each week. 
    Simple.
    
    This is not just a DEC problem.  I have tried to have other
    transactions in MASS deducted from my savings account.  No matter what
    I do - it ends up out of checking (like ins. payments, etc.).  Even
    giving the detailed routing numbers for the SAVINGS accounts fails to
    do this.  I think it's just part of the MASS banking industry goal of
    staying in the dark ages.  This was no big deal in New York.  

.34 At my last job, for a hi-tech company, I had no trouble routing my paycheck
into 4 different places, wether they be savings or checking, and regardless
of banks. And this was in the early-mid 80's onward.

So, I can't see how it the MASS banking industry's fault for the lack of
direct deposit flexibility here at DEC.