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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Zero Net Calculator

The zero net calculator is a tool to determine, within a penny, the amount of deferred compensation that can be deferred after taking required taxes to attempt to defer 100 percent.

Enter the full amount of the payment, click ‘Calculate’ and see the results.

Instructions for using this tool:

This calculator is only appropriate for employees deferring 100 percent of the annual leave lump sum payment to 401(k)/457 plans. The payroll system does not handle the circular calculation necessary to tax the payment at 25 percent and leave a net of $0; therefore, the deferred compensation amount must be processed as a deduction override on HUDU1.

The spreadsheet does not consider an employee’s payroll history; therefore, you will have to verify the deferred amount is within the maximum contribution rules for 401(k)/457 plans and the employee has not exceeded the maximum OASDI amount set by IRS.

If you have an employee that has met the maximum OASDI amount, contact vicki.smith@cpa.texas.gov for a second spreadsheet that will calculate a net of $0 without withholding OASDI.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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