How do I override the automatic payroll tax calculations?

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With every payroll check, AccuBuild calculates the total of the year-to-date earnings, determines the wages 'subject to' the tax, and multiplies this amount by the tax rate and then subtracts the tax amount previously deducted or accrued. Normally, these calculations will not have to be adjusted, however, these amounts may be changed if the Override Automatic Tax Calculations option is enabled on the Employees > Federal screen.  This option will allow you to override the tax amounts and the 'subject to' wage amounts when the system goes through the tax calculation process. The following examples are used to illustrate how this feature might be used.

 

Problem: A handwritten check was processed for an employee who had already reached his FICA cutoff limit for the calendar year. The FICA taxes were erroneously withheld from the employees' check and the employee has already deposited the check in the bank. The company owes the employee the FICA tax that was withheld.

 

Solution: If the employee had not deposited the check, the check could have been voided in the system and then a check could have been issued with the proper amounts. However, since the check has been cashed, it will be necessary to make an adjustment within the system to correct the error. There are two ways to handle the adjustment.

 

A.Void the check and re-enter the handwritten check with all the same information except for  the FICA and FWH tax amounts. The FICA amount would be entered with an amount of zero (the employee had already reached the cutoff limit) and the FWH amount would be increased by the amount that was originally withheld for FICA. The employee never receives back the original FICA amount on his paycheck using this method. If the employee will not be receiving any future paychecks, then this option is the proper choice.

 

B.To reimburse the employee for the FICA tax on his next paycheck, follow these steps to override the tax calculations:

 

1.On the selected employee, enable the Override Automatic Tax Calculations option on the Federal Tab of the Payroll > Employees option. The system will display a check mark if the option has been enabled. This option needs to be enabled prior to processing the next payroll check.        

 

2.Enter the employee's timecard as usual. When the payroll taxes are being calculated, the program will display the taxes that have been calculated for the employee.  Select the FICA tax field and enter a negative amount equal to the FICA amount that was withheld incorrectly.                        

 

3.Print the payroll checks. Notice that the FICA tax for the employee has been added in to the net amount on his paycheck. Note: Whenever you enter a negative deduction, the system adds the amount into the net amount of the check instead of deducting it from the check.

 

4.After the checks have been posted, disable the Override Automatic Tax Calculations option in the employee's file.                        

 

Problem: Sometimes employees within the same company are set up to be paid on different pay schedules. For example, most employees are set up to be paid on a weekly basis (52 pay periods per year) but the corporate officer may wish to be paid monthly (12 pay periods per year).

 

Solution: The Payroll Period (located on the General Tab of the Payroll > Properties screen) would be defaulted for weekly payroll and the Override Automatic Tax Calculations option would be enabled in the corporate officer's employee file. When the taxes are being calculated, the system will stop on this employee and display the taxes that have been calculated. Change the number of payroll periods from 52 to 12 for monthly payroll. The number of payroll periods indicates how many times the employee will be paid in one year. By changing this field, the system will calculate the withholding taxes (FWH & SWH) different from the weekly payroll employees.