Withholding calculation troubleshooting

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Important reminder!

Licenses for Payroll CS, Trial Balance CS, and Write-Up CS (but not Engagement CS) permanently expired on March 1, 2017.

For details, see CSA license expiration 2017 – frequently asked questions.

Some processes documented in the Help & How-To Center are no longer applicable, due to the discontinuation of these CSA modules.

There can be a number of reasons your FICA, FUTA, and other taxes may be calculating incorrectly. Check each of the following to determine the cause of the problem.

  1. Use the Tax Calculation Diagnostics utility to examine how the amounts for employee and employer withholdings are being calculated for the selected paycheck.
  2. Check that your tax tables are current. If the tax tables are out of date, the tax calculations will be incorrect. To verify your tax tables are current, go to Setup > System Configuration > Payroll Tax Information > Federal or State to verify the correct date. If your tax tables are not current and need to be updated, close the current dialog and choose Setup > System Configuration > Payroll Tax Information > Update. In the Automatic Update dialog, you can mark the checkbox to automatically look for tax table updates when entering payroll check entry. You can also just choose to update at that time by clicking the Yes button.
  3. Double-check that your deduction items are set up correctly. It is possible that a deduction item, such as medical insurance, is set up as pre-tax rather than after-tax. If this is the case, delete the check, correct the taxability of the deduction item by choosing Setup > System Configuration > Deduction Items. In the Deduction Items dialog, highlight the item causing the incorrect calculation, click Edit, and then click the Tax Calculations tab. Make any necessary changes to the deduction item, click Enter to save the deduction item with the correct taxability, and then reenter the check.
  4. Check to see if the employee in question is being over- or under-withheld elsewhere. Verify that the employee's prior YTD taxable wages and prior withholding amounts are correct. To verify whether or not employees are over or under withheld, mark the FICA variance checkbox when running an Earnings Report. Employees that are over- or under- withheld will be listed on the last page, along with the amount. Also, if you have manually overridden the withholding amounts at any point, the application will compensate for this by automatically forcing the employee to withhold the correct year to date amount of FICA.

    Note: The employee portion of FICA is based on YTD amounts, but the employer portion of FICA is based on per check amounts. More information.

    Tip: When an employee is under-withheld, FICA amounts may show up for that employee during payroll check entry before any amounts have been entered. If the employee is over-withheld, no FICA amounts may show up at all during payroll check entry.

  5. If you are comparing the calculations in Payroll CS with those of another application, it is very possible that they will not match exactly. Payroll CS calculates on an annualized basis rather than on a check by check basis. Please see the definition of annualization.

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