In our first two years of sharing profit, I did not account for FICA tax. When paying bonuses (the way we distribute profit share), we were incurring an additional 7.65% fee to pay those bonuses out (roughly an extra $3,901 USD in 2018).
This was an oversight on my behalf when I first wrote the calculator code.
As our profit share pool is growing, this is becoming more important to calculate for. If I didn't account for it, this year (2019) we may end up pay like $8k or $9k extra, which risks our ability to make payroll in January. As such, we now need to absorb that amount in the profit share pool.
In our first two years of sharing profit, I did not account for FICA tax. When paying bonuses (the way we distribute profit share), we were incurring an additional 7.65% fee to pay those bonuses out (roughly an extra $3,901 USD in 2018).
This was an oversight on my behalf when I first wrote the calculator code.
As our profit share pool is growing, this is becoming more important to calculate for. If I didn't account for it, this year (2019) we may end up pay like $8k or $9k extra, which risks our ability to make payroll in January. As such, we now need to absorb that amount in the profit share pool.
https://www.accountingcoach.com/terms/F/federal-insurance-contributions-act