Company: ADP
Filing Date: 2025-08-06
Form Type: 10-K
Source: 0000008670-25-000037
Chunk: 132

Company: AUTOMATIC DATA PROCESSING INC
Filing Date: 2025-08-06
Form: 10-K
Item: Item 8
Chunk 132
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 21.0 $1,023.2 21.0 $931.9 21.0 Increase/(decrease) in provision from:State taxes, net of federal tax benefit128.0 2.4 120.6 2.5 111.2 2.5 Foreign rate differential39.0 0.7 41.0 0.9 33.1 0.7 Excess tax benefit - Stock-based compensation(24.3)(0.4)(17.1)(0.4)(19.0)(0.4)Other(27.4)(0.5)(47.4)(1.0)(31.6)(0.7)$1,230.4 23.2 $1,120.3 23.0 $1,025.6 23.1 The effective tax rate in fiscal 2025 and 2024 was 23.2% and 23.0%, respectively. The increase in the effective tax rate is primarily due to higher reserves for uncertain tax positions in fiscal 2025 and a valuation allowance release in fiscal 2024 offset by an increase in the excess tax benefit on stock-based compensation in fiscal 2025.The effective tax rate for fiscal 2024 and 2023 was 23.0% and 23.1%, respectively. The decrease in the effective tax rate is primarily due to a valuation allowance release and an intercompany transfer of certain assets offset by a lower benefit for adjustments to prior year tax liabilities in fiscal 2024.

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The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:Years ended June 30,20252024Deferred tax assets:Accrued expenses not currently deductible$256.7 $237.4 Stock-based compensation expense56.0 51.3 Foreign tax credits8.8 12.0 Fixed and intangible assets 216.8 194.9 Net operating losses59.3 41.7 Disallowed business interest expense carryforward30.9 — Unrealized investment losses, net98.4 351.4 Other28.5 39.1 755.4 927.8 Less: valuation allowances(23.8)(11.1)Deferred tax assets, net$731.6 $916.7 Deferred tax liabilities:Deferred contract costs$654.0