Increase taxable wages without affecting Gross/Net pay.
Issue/Symptom/Question
We need instructions on how to adjust an employee's FIT/FICA/MEDI/FUTA/SUT/SIT wages without affecting Gross/Net pay.
We need instructions on how to adjust an employee's SUT wages and Employer withholding without affecting Gross/Net pay.
Applies To
Manual Check Entry screen
Payroll> Exception Checks> Manual Checks
Master Deductions
Payroll> Setup> Deductions, Reimbursements, and Other Compensation
Employee Earnings History Query
Payroll> Inquiries> Employee Earnings History Query
Employee Payroll Information
Resolution/Fix/Answer
Before making any of these adjustments, make sure there are no records entered for these tax types in the Employee Payroll Information > Withholding > Tax Exempt Status pop-up window.
This adjustment can be used to adjust any/all of the following wage bases: FIT/FICA/FUTA/SUT/SIT.
Please attempt this in your test database before making any entries in Prod.
This wage adjustment will be accomplished through the use of 2 manual check adjustments:
Step 1: Create a Master Deduction
The deduction should be calc base 1
The account will act as a wash account
On the Taxable/Non Taxable tab
The "As a default, deduct (B)efore or (A)fter taxes are calculated(B/A)?" field should be set to A
Create federal level "(B)efore Tax" exceptions to any of the following wage bases that need adjusting: FIT/FICA/FUTA
Create "(B)efore Tax" State level exceptions for the following wage bases that need adjusting: SUT/SIT.
Step 2: Create and Distribute the 1st Manual Check
On the Document Tab
Enter 0 in the "Check #" field
Enter the intended distribution date as the "Check Date"
In the "Net Pay" field enter, as a positive number, the amount the taxable wage bases need to be increased by
Switch the last three fields to "N"
On the Distribution Tab
Enter the same date used for the "Check Date" in the "Work Date" field
Enter the Employee's OU in the "OU" Field
Enter the Account set up on the Deduction master in the "Account #" field
On the Deduct/Fringes tab
Enter the Deduction from Step 1 in the "Deduction #" field
In the "Amount Deducted" field enter, as a negative number, the amount the taxable wage bases need to be increased by.
Close out of the Manual Check Screen to distribute the adjustment.
Step 3: Adjust the taxability of the Deduction in the Master Deduction screen
Query back the adjustment created in Step 1
On the Taxable/Non Taxable tab:
Switch the Before tax before tax exceptions to (A) tax
Note: Do not change the "As a default, deduct (B)efore or (A)fter taxes are calculated(B/A)?" field
Note: Do not delete any of the individual exceptions.
Step 4: Create and Distribute the 2nd Manual Check
On the Document Tab
Enter 0 in the "Check #" field
Enter the intended distribution date as the "Check Date"
In the "Net Pay" field enter, as a negative number, the amount you adjusted wages by in Step 2
Switch the last three fields to "N"
On the Distribution Tab
Enter the same date used for the "Check Date" in the "Work Date" field
Enter the Employee's "OU" in the OU FIeld
Enter the Account set up on the Deduction master in the "Account #" field
On the Deduct/Fringes tab
Enter the Deduction created in Step 1 and Altered in Step 3 in the "Deduction #" field
In the "Amount Deducted" field enter, as a positive number, the amount you adjusted wages by in Step 2
Close out of the Manual Check Screen to distribute the adjustment.
Note: Because there is only ever Employer Only withholding for FUT/SUT, Penta automatically calculates the withholding amount based off of the Adjustment in Step 2.
Note: To adjust withholding on SIT/FICA/FIT a separate adjustement will need to be made.
Note: Please review the results for each employee this is performed on using the Employee Earnings History Query screen.