According to IRS Notice 1036 if you withhold the employee's share of Social Security at the old, higher rate of 6.2% early in 2011, you should make an offsetting adjustment on a future paycheck(s) so the proper overall amount has been withheld. Any adjustments should be made as soon as possible, but no later than March 31, 2011.

To do so in Procare:

1. Print the following report(s) for the year to date (Jan 1st until now).
   1. For version 10 (v10): Reports > Standard Reports > Payroll > Employee Summary > Employee Earning / Withholding Summary.
   2. For version 9.1 (Earnings):  Reports > General Reports > Payroll > G - Earning Summary > Earning Summary.
   3. And version 9.1 (withholdings): Reports > General Reports > Payroll > H - Withholdings Summary > Simple Withholdings Summary.
2. For each employee multiply their Social Security Earnings (shown as FICA-SS) by .042. That will be the amount you should have withheld.
3. Find the actual amount withheld for Social Security. For v10 this is on the same report. Version 9.1 shows this on a separate report.
4. Subtract the amount you should have withheld (step 2) from the actual amount withheld (step 3). This is the amount you'll need to adjust on their next check.
5. The next time you calculate paychecks manually adjust the amount withheld for Social Security. Presumably you'll need to withhold less than usual to account for overwithholding earlier in the year.
6. To double check yourself run the same reports again (after you've made the paycheck adjustments). Your manual calculation of .042 times the Social Security Earnings should match the actual amount withheld so far this year.

Note: It's okay if there is a difference of a few cents.

tags: faq104