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Incorrect Taxable Wages

Problem

Taxable wages are incorrect on reports or tax forms. This may affect:

  • FICA taxable wages
  • Medicare taxable wages
  • SUI (State Unemployment Insurance) taxable wages
  • FUTA taxable wages
  • Other tax-specific wage calculations

Solution

Follow these steps to resolve taxable wage discrepancies.

Step 1: Check taxable wages integrity

  1. Go to Client Functions > Miscellaneous > File Integrity on the ProPay Main Menu.
  2. Select Check Taxable Wages.
  3. Review the results for any discrepancies.

Step 2: Re-index and recalculate

  1. Go to Client Functions > Miscellaneous > Re-Build Index Files on the ProPay Main Menu.
  2. After re-indexing completes, go to Employer > Recalc YTD on the Payroll Main Menu.

This will recalculate all year-to-date totals based on the individual payroll records.

If the problem is resolved, you're done. If not, continue to Step 3.

Step 3: Review taxability settings

Taxability of gross wages is determined at two levels:

Company level:

  1. Go to Employer > Employer Setup > Screen 3 on the Payroll Main Menu.
  2. Review the taxability settings for different wage types.
  3. Verify that wage types are correctly marked as taxable or non-taxable for each tax type.

Employee level:

  1. Go to Employees > Change Employee on the Payroll Main Menu, then select the employee.
  2. Go to the Tax Exemptions screen for that employee.
  3. Review individual employee exemptions and special taxability settings.
  4. Verify that employee-specific exemptions are correct.

By setting up the taxability correctly at both levels, you can prevent similar problems in the future.

Step 4: Identify affected paydates

  1. Go to the Reports menu on the Payroll Main Menu.
  2. Print the Employee Detail Taxable Wages Report.
  3. Review all taxable wages and taxes withheld.
  4. Identify which paydate(s) have incorrect taxable wages or incorrect taxes.

Step 5: Manually correct historical data

If specific paydates have incorrect taxable wages, you must manually edit these wages:

  1. Go to Employer > Edit Database on the Payroll Main Menu.
  2. Locate the payroll records for the affected paydates.
  3. Manually correct the taxable wage amounts.
  4. Save your changes.

Step 6: Rebuild index files (if history is missing)

If prior payroll history appears to be missing:

  1. Go to Client Functions > Miscellaneous.
  2. Select Re-build Index Files for this client.
  3. This will reconstruct the index and may restore missing historical records.

Prevention

To avoid taxable wage errors in future payrolls:

  1. Set company-level defaults correctly in Employer Setup.
  2. Configure employee exemptions accurately when setting up new employees.
  3. Run File Integrity checks periodically (monthly or quarterly).
  4. Verify taxable wages before submitting quarterly reports.
  5. Review tax calculations after processing each payroll.

Related Topics

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