Federal withholding amounts are incorrect

The application determines the taxable wages for a check by reviewing the taxability of each selected payroll item.
It converts the taxable wages to an annualized amount by multiplying the taxable wages by the payroll frequency.
The application subtracts any allowances or exemptions, found in
Setup
Employee
Payroll Taxes
tab, from the taxable wages.
Using the amounts from step 3, it calculates the federal taxes based on the annualized tax tables.
The application divides the annualized federal tax amount by the pay frequency to determine the amount of tax to be withheld on a check.

Pay frequency

Select the
Setup
Clients
Payroll Information
tab.
Select the ellipsis button next to the
Payroll Schedules
field.
Create a payroll schedule with the frequency that the employees need.
Select
Enter
to save your changes.
Select
Setup
, then
Employees
.
Select the employee to be modified from the Employees list in the
Main
tab.
Select the new schedule created in step 3 from the dropdown list in the
Payroll Schedules
section as the
Primary
schedule.
Select
Enter
to save the changes.
Select
Actions
, then
Enter Transaction
to enter the payroll.

Taxable wages

Review the
Payroll Journal with Taxable Wages
for the Current year for accuracy. This report calculates the taxable wages for the federal income tax by employee check.
If the taxable wages for the federal income tax are incorrect on the Payroll Journal with Taxable wages report, there are several places to review that something may have changed:
Verify in the
Events
tab of the
Setup
, then
Employees
screen to see if payroll items may have been added or edited for the employee.
Verify in the
Events
tab of the
Setup
Firm Information
Firm
screen if payroll items have been added or changed for the client that may affect the employee’s wages.
Verify the taxability of all payroll items. In the
Exemptions
tab of the
Setup
,
Payroll Items
screen verify whether any pretax deduction items are in use and check that they are set up correctly.
If the federal withholding amount is zero, there are several items that will calculate zero federal withholding amounts.
Verify in the
Payroll taxes
tab of the
Setup
,
Employees
screen to see if the federal withholding set to
Fixed amount 0
or
Fixed percentage 0.00%
.
Verify in the Taxes section to see that FIT wage exempt status is selected within the screens
Setup
Employees
Payroll Taxes
tab or
Setup
Clients
Payroll Taxes
tab.

W-4 information