**If the two period end dates overlap this will adjust tax calculations**
If you notice that payroll tax is over withheld, under withheld, or not withheld at all, check each of the following settings to determine the cause, and correct the problem for future payroll periods.
Changes are not retroactive and it may be necessary to correct the employee's W-2 form. Refer to How to make Tax or W-2 Adjustments for more information.
This troubleshooting checklist is offered as a general guide and should not be considered all-inclusive.
- In Payroll Configuration, click Taxes. Verify the tax tables contain the correct values. Update federal and state tax tables and compare them to your existing tax tables, the Circular E from the IRS, or the comparable state circular for the state taxing authority. Tax tables are always entered using the ANNUAL amounts.
- Verify the employee's wage amount meets the minimum to be taxed for the Federal Tax table being used in Configuration.
- Determine which employee(s) have incorrect withholding. Look for common factors. If the records have a common factor, look at it as a starting point to track down the error.
- Are they newly added employees?
- Are they in the same department?
- Are they all salaried, or all hourly?
- Do they have the same or similar other pays?
- Do they have the same or similar reduction/deductions?
- Edit the problem calculation and examine the tax settings. Verify the employee's withholding status, exemptions, and withholding adjustment are correct.
- Open the affected employee's record and select the Tax Settings tab. Verify the employee's withholding status, exemptions, and withholding adjustment are correct.
- Determine if the Employee's pay has been annualized. Payroll determines taxable pay and applies tax tables based on ANNUAL amounts.
- Adjust withholding to correct the tax withheld.
Note: For the end-of-year release, Federal tax table defaults have been updated. In addition, modifications have been made to State tax tables, where known to Blackbaud at the time of release. Please check your State table carefully for appropriate values and exemptions (including SUTA where applicable).