• The Before employee or Before employer tax selection is incorrect on a deduction
• The Employee or Employer Tax Exempt selection is incorrect on a pay
• The tax on the Employee setup has the wrong Adj Method

Correct the Pay or Deduction setup

1. Go to Payroll, Setup.
2. Select Deductions or Pays, as applicable.
   • Deductions: Verify you selected the applicable Before employee tax and Before employer tax boxes
   • Pays: Verify you selected the applicable Employee taxes exempt and Employer taxes exempt boxes

Correct the Employee setup

1. Go to Payroll, Setup, Employees.
2. Enter the employee ID.
3. Click Taxes on the right.
4. Change the Adj Method to the appropriate type.

Run Recalculate Subject-to for affected employees

See steps to recalculate subject-to for the current year or steps to recalculate for the prior year.

Notes:

FICA Taxes are self-adjusting. If you change the pretax status for FICA taxes, see more information about FICA calculating the wrong amount.

If you need to correct the tax withheld for an Employee tax, you can use an employee loan. You’ll use an employee loan to cover the taxes and have the employee pay back the loan in installments. See more information about entering employee loan payments. Consult your tax advisor to determine any tax reporting needs.