Posting Date for Retroactive Technology Allowances Has Changed - 06/24/10
Effective immediately, technology allowances with retroactive dates received by the Shared Service Center will be paid in the current pay period to ensure proper gross-up tax calculations and reporting.
There are times when it is necessary to pay an employee for technology allowances in prior periods, such as when an employee is granted permission for an allowance but submits the paperwork too late for entry on a timely basis.
SAP calculates supplemental taxes only on wages paid in the current time period. If technology allowances are paid retroactively, the employee could either benefit from lower tax table withholding or be penalized by higher withholding, depending on individual circumstances.
Now the total of all retroactive amounts will be added to the current amount and keyed as a lump sum tech allowance for the current pay period. In doing so, the amount of the gross-up will approximately be offset by the withholdings, and the employee will net the correct amount.
Payroll and the Shared Service Center remind staff that the best solution is to always submit the paperwork on time.