If federal, state, local or employer payroll taxes are calculating incorrectly, review the solutions below:
EasyACCT annualizes the employee's pay regardless of the selected pay period.
- When comparing the tax calculation in EasyACCT to a tax publication, compare the annualized tables only (these are used by most software companies).
- For federal tax calculations, refer to Publication 15 (Circular E), Employer’s Tax Guide and Publication 15-T, Federal Income Tax Withholding Methods.
For after-the-fact payroll, EasyACCT automatically adjusts FICA and Medicare to the correct amount if the employee is over, or under-withheld, and this adjustment is taken out of federal withholding.
- The employer portion is also adjusted so total FICA and Medicare are correct for reporting on Form 941.
- For more information, refer to Using the Recalculate Button in Payroll Processing
Make sure the latest year's tax tables are present and that rates and limits haven't changed:
- Go to Company Selection and select System.
- Select System Utilities.
- Go to Payroll/Sales Tax Tables.
- Select Federal Tax Tables.
- Repeat for state, local and other state taxes.
The employee might not be setup correctly, or you've set up tax-exempt withholding items that reduce the tax. To check the employee setup:
- Go to the Employee Information screen and make sure there are no extra withholding amounts or percentages, which will affect the calculation.
- Go to the Wage/Withholding tab to review if the setup is correct.
- For federal taxes, make sure the applicable box is selected on Gross Pay items.
- If a tax-exempt withholding item is set up, it should be selected to show the tax is exempt.
- For state, local and other state taxes, make sure the correct tax codes are selected.
- Go to the Earnings Records tab and make sure that YTD earnings don’t exceed any applicable tax limits.