Page 243 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
T IPS &T ECHNIQUES

When an employer has multiple pay periods in a month, it can choose
to make payroll deductions all in one pay period or spread them
equally throughout the month. The preferred approach is to spread
them throughout the month. By doing so, employees do not suffer a
significant decline in their take-home pay for one of their paychecks.
Also, by setting up deductions to occur in the same amounts in all pay
periods, the payroll staff does not have to constantly delete deductions
from the payroll system and then reenter them for one payroll per
month. Instead, the deductions stay in the payroll database as active
deductions for all pay periods; this requires much less maintenance.

A garnishment for unpaid taxes takes priority over all other types
of garnishments, except for child support orders that were received
prior to the date of the tax garnishment. If a business receives orders
from multiple taxing authorities to garnish an employee’s wages and

there are not enough wages to pay everyone, then the orders are imple-
mented in the order in which they were received.
The “Notice of Levy on Wages, Salary, and Other Income,” Form
668-W, is the standard form used for notifying a company to garnish an
employee’s wages. It has the following six parts:

Part 1. This is for the employer. It states the employer’s obligation
to withhold and remit the unpaid tax, and states the amount of
the unpaid tax.

Part 2. This is the employee’s copy of the notification.
Parts 3–4. The employee must complete these pages and return
them to the employer within three business days. The employer
completes the back side of part 3, returns it to the IRS, and
retains part 4.

Part 5. The employee keeps this page, which includes tax status and
exemption information.

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