*headdesk*

[rm]

I used to get paid twice a month and my takehome was a consistent amount.

We switched to once monthly, and I figured it would be doubled, but no, there was an extra $250 tax hit.

Do I change my withholding or will this sort itself out when I don't get paid again for a month?

Comments

[rosepurr.livejournal.com]

Just to clarify, were you being paid twice monthly or bi-weekly? This will significantly affect your tax withholdings by paycheck.

[rm.livejournal.com]

I used to get paid twice a month.
Now I get one paycheck for the whole month.
Now my tax hit is $250 more than the tax hit when I added the tax hit on the two checks (back when it was twice a month) together.
I am making the exact same amount of money, so I don't understand why the total tax hit is so much more.

[rosepurr.livejournal.com]

Yeah, that doesn't make any sense.

If you were getting paid bi-weekly, it could be because of the extra two pay periods. It may be because of the shift, this first month added a few extra days from the end of last month to your taxable income, or something like that. I'd wait until you get one more paycheck to make sure that it isn't anything like that, and then I'd either talk to your accountant or to your HR department and make sure that there wasn't a mistake.

[hodsthorn.livejournal.com]

I wouldn't count on it getting sorted out in the short-term; this is one of those "it'll all come out in the laundry/ tax-time" types of things.

I went through something similar at a job about ten years ago. If this is, in fact, the same problem, what's going on is that the tax withholding is a myopic and automatic system--it only looks at your current paycheck, and an arbitrary amount is taken out on the assumption that this is what you get paid all the time (i.e., on a biweekly basis). So you're now losing taxes at a greater rate because, as far as the bureaucracy is concerned, you just got your salary doubled.

Of course, since you didn't, the overage will be returned to you next April--but in the meantime, the only way to offset the problem is, indeed, to change your deductions so that less is taken out.

Of course, I'm not actually any good at this stuff--you might want to talk to whoever's in charge of personnel before making a change so you don't overdo the withholding and end up owing money at the end of the year. Good luck!

[alexpgp.livejournal.com]

It would seem that whoever is in charge of payroll recalculated your withholding as if the new amount was being paid twice per month instead of once.

If speaking with TPTB doesn't clarify this, I would go ahead and redo the number of withholding deductions so as to bring the amount withheld in line with what you owe on April 15.

Cheers...

[spiralflames.livejournal.com]

the monthly pay is a screw. it WON'T sort out, to my knowledge. if you got paid QUARTERLY, the fed would still view it as one paycheck. change your withholding.

[00goddess.livejournal.com]

The Tax Professional says: see what happens next month, because it should not be different.

Did you get two paychecks last month, or one? If you got one, they could have switched in the middle of the month, so your withholding would have been pro-rated. If you got two, then you need to talk to the payroll department because someone screwed up.