Round up, down, does it matter? I guess not.
Page 168, Chapter 10 of "Mastering Payroll" shows the FICA tax, employee portion, to be $156.83 on Gross Wages of $2,050. It's actually $156.825, but it has been rounded up.
Page 170, Quiz 1 shows FICA tax of $34.42 on Gross Wages of $450. It's actually $34.425. It's been rounded down. Same with FICA tax on Employee A on same page, FICA tax of $49.72 has been rounded down from $49.725, and Employee B's has been rounded down to $65.02 from $65.025.
Is this accepted practice or is this just errors in the text?
I've always rounded up at 5. I've never seen a round down before.
See line 7 of IRS form 941. In other words, it doesn't matter which way you do it.
The instructions say the following:
7.Current quarter's adjustment for fractions of cents. Enter adjustments for fractions of cents (due to rounding) relating to the employee share of social security and Medicare taxes withheld. The employee share of amounts shown in column 2 of lines 5a–5d may differ slightly from amounts actually withheld from employees' pay due to the rounding of social security and Medicare taxes based on statutory rates.
The same applies to W-2 information.