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Confused about NOPD Payroll Tax?
The Fraternal Order of Police has received a number of phone calls from members concerned about the way ADP is withholding income taxes from their NOPD biweekly paychecks.
The issue with taxes is quite confusing – but as a general rule it appears that ADP is doing it correctly.
Part of the confusion lies in the manner in which State Pay is handled for both pension and tax purposes.
Under the old system, the city computed income tax and pension deductions on State Pay for each commissioned employee by adding $230.76 ($6000.00 / 26) to gross pay on each paycheck prior to normal tax/pension calculation. This "evened out" the tax and pension consequences of State Pay.
The problem with that system is it assumed that every police officer received $500.00 per month in State Pay each and every month – and this simply is not the case. Leave Without Pay (LWOP) due to illness or suspension could leave an officer with a reduced State Pay check, or in some cases, no State Pay at all.
ADP is now adding the actual amount of State Pay received to the gross pay on a single check per month prior to calculating pension and income tax deductions. This makes the amount of pension and tax deductions fluctuate. On every other check, pension contribution will go up $50.00, based on 10% employee contribution; an employee in a 15% tax bracket, will see tax withholding increase by as much as $67.50. Combined that can cause one check to be nearly $120.00 less than the previous – even though the officer worked the same number of hours.
Also impacting the manner in which withholding tax is calculated is the IRS tax tables.
When an officer works overtime, or otherwise receives a greater gross pay amount, taxes are calculated at a higher percentage, based upon the IRS Tax Withholding Tables, and the IRS Form W-4 each employee files with the NOPD payroll office.
For example:
if you are single and claim zero exemptions on your W-4 the tables say the following:
Gross pay $1500 – $1520 Withholding $196.00 (13%)
Gross pay $2000 – $2020 Withholding $321.00 (16%)
if you are married and claim two (2) exemptions on your W-4 the tables say the following:
Gross pay $1500 – $1520 Withholding $97.00 (6.5%)
Gross pay $2000 – $2020 Withholding $172.00 (7.1%)
Officers can make sure that taxes are being properly withheld by checking their gross pay on a pay stub against the IRS tables. Each employee's W-4 status also appears on their individual pay stub (upper left portion). The IRS Tax Withholding Tables can be found at www.irs.gov/pub/irs-pdf/p15.pdf. The biweekly withholding tables start at page 49.
Employees can control the amount of taxes being withheld by filing a new W-4 with the city, and adjusting the status and the number of exemptions.
While the FOP hopes this explanation helps, it is not meant to say that individual employees are not experiencing some issues with the ADP system. Any employee having difficulty with ADP or the NOPD payroll system can contact the FOP at (504) 442-4050. If the problem requires action from the FOP we will be more than willing to assist.
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