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Troubleshooting and explanation of the Payroll Exception Report

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The Exception Report is intended to identify and correct employee records with incorrect withholding amounts. These amounts are often the result of manually calculated payroll checks that were figured incorrectly or, in some cases a rounding adjustment (usually by a penny). This report shows the actual amount withheld, as entered on a payroll check, compared to the calculated withholding amount.

The following information outlines the various features of this report and how it can be used to correct withholding errors.

Section 1: Running the report

  1. Click Reports & Forms, Payroll.
  2. Open the Exception Report.
  3. In the Tax to check field, click the drop-down arrow and select the appropriate tax from the drop-down list.

    Note: The Tax to check field lists all Employee and Company payroll fields that use payroll tax tables to calculate the tax amount. These tables are located by going to File, Payroll Formulas and User-Maintained or Sage-Maintained and have been set up to appear on the Payroll Tax Report menus.
  4. Check the box for Prepare correcting entries
    Note: Before Preparing correcting entries make sure you have a backup. See How do I create a backup?
    To view the report first without applying the correcting entries, leave this box unchecked.
  5. In the Tax to adjust to field, select a payroll tax.

    • Only tax tables used in the current calendar year will appear in the Tax to Check and “Tax to Adjust to” menus on the Exception Report, Filter window.
    • The Tax to adjust to field contains a list of all available payroll fields.
    • The tax selected cannot be the same one selected in the Tax to Check list box.
    • The selected tax will be used to create a payroll entry that corrects the Tax to Check and places the adjustment into the Tax to adjust to.
    • Company taxes cannot be adjusted here; only employee taxes can be adjusted in this way.
    • The adjusting entries will appear in the Employee Paycheck List or on the Payroll Journal Report with a reference of ExcptAdj.
    • The entry can be edited or deleted, if desired.

Section 2: Information displayed on the report

For the tax selected and quarter filtered, the default Exception Report displays the following:

  • Employee ID, Employee Name, ST, and SS No: This information is pulled from the General tab of the Maintain, Employees/Sales Reps window.
  • Quarter: The quarter when the payroll exception took place.
  • Taxable Gross: This amount represents wages subject to the selected tax for the period reported. The wage amount in this column equals gross wages for the period up to the annual taxable wage limit, if applicable, after adjustment for any pretax deductions/additions. The annual taxable wage limit is found in the tax table formula for the selected tax. If the annual taxable wage limit for the selected tax was reached before the beginning of the report period, this field will show $0 for the wage amount. Pretax deductions/additions are determined by the Adjust button settings which are selected on the Employee/Company tab of the Maintain Employees/Sales Reps window.

    Note: If Use Defaults is checked for the selected payroll field, then refer to the adjust button settings on the Employee Fields and Company Fields tabs in Maintain, Default Information, Employees.
  • Amount Withheld: The total tax amount actually withheld on the payroll entry.
  • Calculated Amount: The total tax amount for the filtered payroll field for the quarter. The tax amount is recalculated based on the current taxable gross and payroll tax table settings.
  • Difference: The net change from Amount Withheld and Calculated Amount. This will be the amount of the payroll adjustment entries if prepare correcting entries was checked.
    Note: Before Preparing correcting entries make sure you have a backup. See How do I create a backup?

Section 3: Troubleshooting the Exception Report

  • If the open payroll tax year is not the year that you are displaying the payroll tax report for, close the payroll year in order to update the current calendar year.
  • If you attempt to prepare correcting entries for a company paid tax, you will receive an error stating You cannot adjust an employer tax. To adjust a company paid tax, manually create the adjustment through the payroll entry screen.
    Note: Before Preparing correcting entries make sure you have a backup. See How do I create a backup?
  • Only payroll fields that require a calculation that uses taxable (adjusted) gross will appear in the Tax to Check and Tax to Adjust to menus on the Filter tab of the Exception Report window.
  • Only tax tables with Use this formula as a filter on the Payroll Tax Report checked will appear in the Tax to Check and Tax to Adjust to menus on the filter window of the Payroll Exception Report.
  • The tax amount withheld and the calculated amount on the Exception report will be different if one of the following occurred:
    • The calculated tax amount on the payroll entry screen was modified at the time checks were created for the selected payroll field.
    • The payroll tax table for the selected payroll field has been modified since the checks were originally created.
    • Employee beginning balances were modified after payroll entries have been made.
  • If the problem is related to a state unemployment tax, then check the following:
    • Go to Maintain, Employees/Sales Reps... and select the General tab. Verify the employees have a state abbreviation in the State ID field.
    • Go to MaintainEmployees/Sales Reps and select the Company tab. Verify the Tax Name for SUI_ER has a state abbreviation in the name instead of wildcards or asterisks.

      Note: If Use Defaults is checked for the selected payroll field, then refer to the tax name on the Company Tab of the Maintain, Default Information, Employees window.

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