Payroll tax variances, caught the day they happen.
A variance is the gap between the tax payroll withheld and the tax that should have been withheld. Pay and File recalculates every tax code and flags each one the day it happens.
Click the SUI code to see its employees and where the variance comes from.
Example figures, one California client, one pay period.
Get ahead of variances the day they happen.
Not at quarter end, after every pay cycle since has carried them.
Variances pile up all quarter, then get worked under deadline. Whatever doesn’t clear in time becomes an amendment or a penalty.
Each variance is flagged the day it happens and settled before filing, so quarter end is spent verifying.
Legacy quarter ends run long because missing IDs, TPA access gaps and setup variances all surface at once, and teams pay penalties on what they can’t clear in time.
Every tax code recalculated, every variance settled before it’s remitted.
Recalculated from the source
Every tax code, from subject wages and the rate on file.
Compared with what payroll says
Against the wage report and imported liabilities, by tax code or by employee.
Settled on approval, or fixed at the source
Approval adds an offset so the remittance matches. A stale rate gets fixed instead.
CA-840-0000-035-ERCalifornia State Unemployment Tax (SUI)SUI rates are set per employer. If the rate on file is out of date, correct it rather than offsetting.
FE-840-0000-010-EEFederal Social Security Tax, Employee (FICA)Most trace to payroll setup, so the fix goes to payroll. Step three of the Pay and File daily flow.
Common questions.
What causes payroll tax variances?
Most come from payroll setup rather than math: an out-of-date SUI rate, the wrong work state or address, wrong subject wages, an exemption that wasn’t applied, or tips that leave FICA short.
How often are variances checked?
Every pay cycle. As each payroll comes in, the platform recalculates every tax code from the employee-level detail and compares it with what payroll withheld. A variance shows up the day its payroll lands, not at quarter end.
Does it need employee-level data or just payroll totals?
Employee-level data. The platform takes per-employee wages and taxes for each payroll, which is what lets it show a variance by employee as well as by tax code. Summary totals can show that something is off, but not where.
Who fixes a variance?
Usually the payroll team. The platform shows each variance by tax code and by employee, and most trace to payroll setup, like a work state, an address, a rate or an exemption, so they go to whoever owns that setup with the detail attached. The tax team reviews the report and approves it.
Should every variance just be offset?
No. An offset on approval is right when payroll’s liability is simply off from the calculated tax, so the agency still gets the full amount. When the cause is upstream, like an SUI rate that’s out of date or subject wages that are wrong for an employee, the better fix is the rate or the wages themselves, so the next payroll doesn’t produce the same variance again.
Will it catch a wrong SUI rate if payroll has the same wrong rate?
No. The platform recalculates using the rate on file, so a rate that’s wrong in both places produces no variance. That’s why a new rate notice needs its own check, separate from the daily variance review.
How does catching variances daily change quarter end?
Variances are settled pay cycle by pay cycle, so the quarter’s wage report, which ties wages and taxes, is usually clean by the time it needs approval. Filings go out only after that report is approved.
See what it would catch in your data.
We’ll pull a recent payroll in through the API and show you every variance it finds.