Lab 1
Trace one paycheck to the cent
Scenario
Priya wants to verify the engine before trusting it - auditor style. Target: Ben Carter, salary $52,000 biweekly ($2,000 gross), single, no W-4 extras, 6% 401(k), first check of the year, in a no-income-tax state.
Steps
- 1
Run a draft including Ben and open his paycheck’s calculation trace.
Expected: The trace lists each tax with base, rate, rate year, YTD before, and caps.
- 2
Verify Social Security by hand: 6.2% × $2,000.
Expected: $124.00 - the 401(k) does not reduce the SS base.
- 3
Verify Medicare: 1.45% × $2,000.
Expected: $29.00, no cap, no Additional Medicare (YTD far below $200,000).
- 4
Check the federal withholding base: $2,000 − $120 (401(k)) = $1,880, annualized to $48,880 through the 2025 single schedule.
Expected: The trace shows the annualize → schedule → de-annualize path; the withheld amount matches the trace output exactly.
- 5
Verify employer-side amounts: SS $124.00, Medicare $29.00, FUTA 0.6% × $2,000 = $12.00 (first $7,000 not yet reached).
Expected: Employer taxes match; FUTA will stop after Ben’s YTD passes $7,000.
- 6
Confirm the remittance rollup after approval includes Ben’s amounts in the federal and 401(k) buckets.
Expected: The per-agency totals move by exactly the traced amounts.
Checkpoints - you got it right if…
- Hand-computed SS ($124.00) and Medicare ($29.00) match the trace to the cent
- The 401(k) reduced the federal base to $1,880 but not the FICA base
- FUTA computed on the wage base with the $7,000 cap visible in the trace
- Approved amounts appeared in the remittance rollup per agency