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Supplemental Pay Essentials - Severance Pay, Deferred Compensation, Recordkeeping and Fringe Benefits

instructor
By: Patrick Haggerty
Recorded Session
Duration
90 Minutes
Training Level
Intermediate to Advanced

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Recorded Session

Training CD

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Webinar Details

This training program will help attendees distinguish between supplemental wage payments and regular wage payments and help them identify wage payments that are neither supplemental nor regular. It will also detail methods used to compute withholding on supplemental pay including examples.

"Supplemental Pay Essentials - Severance Pay, Deferred Compensation, Recordkeeping and Fringe Benefits" - This course is approved by NASBA (National Association of State Boards of Accountancy). Attendees of Live Webinar are eligible for 1.8 CPE credit up on full completion of the course.

WHY SHOULD YOU ATTEND?

Supplemental pay includes compensation such as overtime premiums, bonuses, severance pay and fringe benefits. It is an important component of employee compensation but has its own set of withholding rules. Computing an appropriate amount of withholding for supplemental pay can be a challenge. Payroll departments often hear complaints of too much withholding from employees and sometimes too little withholding from highly compensated employees. The introduction of mandatory flat rate withholding for certain employees changed the definitions of supplemental and regular wages and created additional recordkeeping responsibilities for employers.

The rules for withholding from supplemental pay involve compliance issues for employers related to tracking supplemental wages paid to each employee during the calendar year, selecting the appropriate method to use to compute withholding from supplemental pay, and proper application of options and exceptions to the general rules. Failure to know and correctly apply the rules can result in costly penalties for failure to withhold the correct amount of tax.

This fast paced and detailed webinar will provide crucial information to effectively manage supplemental wage payments. It will discuss when optional methods may be elected and when they may not and the effect of Form W-4 claims and regular pay period on supplemental pay withholding.

AREA COVERED

  • Why Congress distinguished supplemental pay and enacted special rules for computing withholding.
  • Definitions and examples of supplemental and regular compensation including optional treatment and exceptions.
  • Detailed description of methods used to compute withholding on supplemental pay including examples.
  • When optional methods may be elected and when they may not.
  • When the mandatory flat rate method must be used and situations in which the employer has options.
  • The effect of Form W-4 claims and regular pay period on supplemental pay withholding.
  • Recordkeeping required for compliance with mandatory flat rate withholding rules.
  • Penalties for failure to withhold and penalty avoidance.
  • Application of the rules to specific examples of supplemental pay situations.

LEARNING OBJECTIVES

  • Distinguish between supplemental wage payments and regular wage payments and identify wage payments that are neither supplemental nor regular.
  • Compute withholding using each of the methods specified for supplemental wages.
  • Be aware of critical options and exceptions to the general rules.
  • Understand common and not so common examples of supplemental pay and how the rules apply.
  • Understand how the rules apply to severance pay, deferred compensation, and other post termination payments.
  • Understand when the 25% flat rate may be used and when it is not allowed.
  • Understand when the 39.6 % flat rate must be used and how to apply it to supplemental wage payments.
  • Learn how to avoid failure to withhold penalties.

WHO WILL BENEFIT?

  • Payroll Supervisors and Personnel
  • Payroll Consultants
  • Payroll Service Providers
  • Public Accountants
  • Internal Auditors
  • Tax Compliance Officers
  • Enrolled Agents
  • Employee Benefits Administrators
  • Officers and Managers with Payroll or Tax Compliance Oversight
  • Company / Business Owners
  • Managers/ Supervisors
  • Public Agency Managers
  • Audit and Compliance Personnel / Risk Managers

Supplemental pay includes compensation such as overtime premiums, bonuses, severance pay and fringe benefits. It is an important component of employee compensation but has its own set of withholding rules. Computing an appropriate amount of withholding for supplemental pay can be a challenge. Payroll departments often hear complaints of too much withholding from employees and sometimes too little withholding from highly compensated employees. The introduction of mandatory flat rate withholding for certain employees changed the definitions of supplemental and regular wages and created additional recordkeeping responsibilities for employers.

The rules for withholding from supplemental pay involve compliance issues for employers related to tracking supplemental wages paid to each employee during the calendar year, selecting the appropriate method to use to compute withholding from supplemental pay, and proper application of options and exceptions to the general rules. Failure to know and correctly apply the rules can result in costly penalties for failure to withhold the correct amount of tax.

This fast paced and detailed webinar will provide crucial information to effectively manage supplemental wage payments. It will discuss when optional methods may be elected and when they may not and the effect of Form W-4 claims and regular pay period on supplemental pay withholding.

  • Why Congress distinguished supplemental pay and enacted special rules for computing withholding.
  • Definitions and examples of supplemental and regular compensation including optional treatment and exceptions.
  • Detailed description of methods used to compute withholding on supplemental pay including examples.
  • When optional methods may be elected and when they may not.
  • When the mandatory flat rate method must be used and situations in which the employer has options.
  • The effect of Form W-4 claims and regular pay period on supplemental pay withholding.
  • Recordkeeping required for compliance with mandatory flat rate withholding rules.
  • Penalties for failure to withhold and penalty avoidance.
  • Application of the rules to specific examples of supplemental pay situations.
  • Distinguish between supplemental wage payments and regular wage payments and identify wage payments that are neither supplemental nor regular.
  • Compute withholding using each of the methods specified for supplemental wages.
  • Be aware of critical options and exceptions to the general rules.
  • Understand common and not so common examples of supplemental pay and how the rules apply.
  • Understand how the rules apply to severance pay, deferred compensation, and other post termination payments.
  • Understand when the 25% flat rate may be used and when it is not allowed.
  • Understand when the 39.6 % flat rate must be used and how to apply it to supplemental wage payments.
  • Learn how to avoid failure to withhold penalties.
  • Payroll Supervisors and Personnel
  • Payroll Consultants
  • Payroll Service Providers
  • Public Accountants
  • Internal Auditors
  • Tax Compliance Officers
  • Enrolled Agents
  • Employee Benefits Administrators
  • Officers and Managers with Payroll or Tax Compliance Oversight
  • Company / Business Owners
  • Managers/ Supervisors
  • Public Agency Managers
  • Audit and Compliance Personnel / Risk Managers

SPEAKER PROFILE

instructor

Patrick Haggerty is a tax practitioner, author, and educator. His work experience includes non-profit organization management, banking, manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent taxpayers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including Payroll tax issues, FLSA compliance, information returns, and accounting.

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