Why do tax variances occur?

Tax variances primarily occur due to a difference between the tax rate on file for the employee or employer and the actual tax rate that should be applied.

This discrepancy can occur if there are issues in:

• Employee setup, if rated codes for taxes weren’t applied correctly throughout pay periods for employees.

• New tax rate information, if it is submitted to Namely late. While most agencies assign new tax rates at the beginning of the year, they can be tardy in sending this information to employers, and employers are delayed in sending this information to Namely.

• Payroll void, if an employer voids a check because they paid the wrong amount to the employee, and there is a credit back to the employer.