How does Zenefits calculate the FFCRA tax credit? I don’t understand the amount I see in the run. I calculated it myself and got something different.
The Families First Coronavirus Response Act, or FFCRA, set forth certain calculations for the applied tax credit.
The general formula for the tax credit is =
Full amount of leave pay + 1.45% of the leave pay if the employee is subject to FICA
Full amount of leave pay + 1.45% of the leave pay if the employee is subject to FICA
The credit covers 100% of up to ten days of the qualified sick leave wages and up to ten weeks of the qualified family leave wages (and any qualified health plan expenses allocable to those wages) that an employer paid during a calendar quarter, plus the amount of the employer’s share of Medicare taxes imposed on those wages.
See the Department of Labor’s Families First Coronavirus Response Act: Questions and Answers for rules regarding required FFCRA paid sick leave and expanded family and medical leave and other leave entitlements.
When processing payroll in Zenefits, you will see the credit totals on your approval page equaling the total wages paid via the COVID-19 sick/leave pay earnings, plus the employer portion of the Medicare taxes.