Payroll Deductions, Taxes, or Expenses Not Calculating

Background
Taxes, Deductions, or Expenses Not Being Calculated At All
Incorrect Tax, Expense, or Deduction is Being Calculated

Background

This support article explains the possible reasons for payroll taxes, deductions, or expenses not being calculated (or not being calculated properly) for an employee. When possible, it also includes suggestions for resolving calculation issues.

Taxes, Deductions, or Expenses Not Being Calculated At All

There are several possible causes for taxes not being calculcated when running a paycheck for an employee. The most common reasons include:

Employee or Wage is Exempt

You can choose to mark either an employee or a wage (or both) as Exempt from specific taxes and deductions. If this was done (and shouldn't have been) you can correct this by editing that wage or employee card. Please note that this will only effect paychecks going forward. If you are going to delete and recreate any checks you should leave them as exempt when you delete the checks and then remove the exempt status afterwards (before you recreate the checks).

Employee

You can choose whether or not a tax, deduction, or expense applies to a particular employee in that employee's card. To do this:

  1. Go to Lists > Cards from the menu bar at the top of the screen
  2. Click on the arrow/double arrow next to the employee in question
  3. Click on the Payroll Details tab
  4. Along the left hand side click on Taxes, Employer Expenses, or Deductions (whichever type is not calculating for that Employee)
  5. Make sure that there is a check mark next to the Tax, Expense, or Deduction name
  6. Click OK

Wage

You can choose whether a particular Wage is exempt from any tax, deduction, or expense. To do this:

  1. Go to Lists > Payroll Categories > Wages from the menu bar at the top of the screen
  2. Click on the arrow/double arrow next to the Wage in question
  3. Click on the Exempt button at the bottom of the Wage
  4. Make sure that any Tax, Deduction, or Expense that should apply to this Wage are NOT checked
  5. Click OK and then OK again to close out of the Wage

The Maximum Amount That Needs to Be Taken Out Has Been Reached

If you've reached a deduction, expense, or tax limit the software will (and should) stop calculating. As a note, the limits are based not on the actual dollar figure of a Wage but instead are a calculation based on the Wage Limit multipled by the Rate. This means, that if your Rate increased mid-year, the software will continue to calculate until the full amount is deducted/taxed/expensed.

As an example, if I have an SUI Wage Limit of $32,000 dollars and the SUI percentage is 3%, the expense limit is calculated by multiplying 32000 by .03 and equals $960.00. So even if I have made $32,000 dollars already it will continue to calculate until that $960.00 is expensed.

(Windows Only) Permission or User Access Problems

It's possible for taxes not to calculate at all if the software does't have the appropriate permission levels to access the files it needs.

This can often be resolved by speaking to an IT professional and have them set appropriate permissions on the Application and the folder that the Application is in (normally C:\AccountEdgePro[Year]).

You can also attempt to uninstall the software and then reinstall it to a folder on the Desktop. You can do this by:

  1. Follow the instructions for uninstalling the software
  2. Create a folder on the desktop called AccountEdge
  3. Reinstall the software but when it lists the Application path choose the folder on your Desktop

Incorrect Tax, Expense, or Deduction is Being Calculated

There are also several possible causes for taxes not being calculcated properly or not taking out expected amounts when running a paycheck for an employee. The most common reasons include:

Outdated Tax Tables

AccountEdge offers Payroll Tax Service for those customers who use AccountEdge to calculate and process their payroll checks. People who sign up for this tax service need to be on the latest version of the software and need to go through the process of loading payroll tax tables.

If you do not load these tax tables the calculations in the software will be incorrect.

Numbers Are Being Adjusted to Make Up for Earlier Calculations

If you did load your tax tables, but loaded them later in the year, AccountEdge will need to make up for previous calculations. This means that you may see that higher amounts are taken out of employees paychecks as it needs to account for the difference. This is correct as the employee will actually owe the additional money to the government.

Allowances are Improperly Set

When you set up Employee cards you can choose how many allowances they have (per their W-4) or whether to withhold extra money. If this is set improperly (or their marital status is set improperly) it will cause the tax calculation to be off.

You can change/verify the number of allowances by:

  1. Go to Lists > Cards from the menu bar at the top of the screen
  2. Click on the arrow/double arrow next to the Employee in question
  3. Click on the Payroll Details tab
  4. Click on Taxes along the left hand side of the card
  5. Verify that the marital status, number of allowances, and extra withheld is correct for this Employee