CAUTION: This guidance is from the perspective of a business owner that is willing to risk minor fines and penalties in order to save time. For more information see The Hackers Guide to Payroll Taxes Philosophy.
If you are using Monchilla you shouldn't need this, but if for some reason you underpay or overpay an employee by a few dollars you can use this trick to adjust the federal income tax withholding by a few bucks to make the paycheck match what was actually paid.
This works because federal income tax withholding is a pretty rough estimate (see Federal Income Tax Calculation Methods) and changing it a few dollars isn't significant. However, if you have already sent your employee a pay stub you might want to make sure they are OK with you changing this.
If you are adjusting a paycheck from a previous quarter and have sent in your 941 report you should amend that report (although if your change is for less than $10 it is probably not worth the extra effort).
If your paycheck is more than a few dollars off you may need to Use Employee Advances to Change Net Pay.
Determine new Federal Income Tax Withholding using Google Spreadsheets
1. Login to gmail.
Note: if you don't have a google account you can get one from https://accounts.google.com/SignUp.
2. Click here to open the spreadsheet template.
3. Click File and then Make a Copy and then click Ok.
4. Fill out the white cells in the spreadsheet. The blue cells will be calculated for you. You can hover your mouse over the column headings for additional info.
Determine new Federal Income Tax Withholding using Microsoft Excel
1. Click here to open the spreadsheet template.
2. Click File and then Download As... and then Microsoft Excell (.xlsx).
3. Open the file you downloaded and fill out the white cells in the spreadsheet. The blue cells will be calculated for you. You can hover your mouse over the column headings for additional info.
If you are using Monchilla you can Adjust your Federal Income Tax Withholding on a paycheck easily.