Payroll Tax Configuration Issues – Birmingham, AL

Guys,

The configured tax rate in PeopleSoft for Birmingham, AL is 1.00% for both residents and nonresidents. However, the actual withholding reflects a rate of 0.974%, which is lower than expected.

On the paycheck review screen, the following details are shown:

• Taxable Gross: $4,396.74
• Tax Amount Withheld: $42.85
• Effective Tax Rate: (42.85 / 4,396.74) × 100 = 0.974%

It is supposed to be 1.00%, but some employees are being calculated at a lower rate (e.g., 0.97%, 0.98%, etc.), while others are correctly calculated at 1.00%.

Has anyone else experienced this issue?

TIA,

Raj.