When to calculate taxes manually for prior-year payroll transactions
Description
Cause
Resolution
NOTE:
Automatic calculations for the prior year use the current payroll settings. If employee settings changed for the new year, revert the changes or calculate taxes manually.
Automatic tax calculations are typically appropriate in the previous calendar year when processing regular payroll transactions (that match an employee’s normal pay).
Sage 50 requires manual tax calculations for year-end adjustments. Calculate taxes manually when a payment includes a large lump-sum amount that differs from the employee's regular earnings.
Examples include:
Retroactive pay covering multiple pay periods
Large bonus payments
Other unusually large earnings adjustments
NOTE:
Transactions entered or adjusted in a previous calendar year will affect payroll reports for that year. Adjustments that impact the balance forward will impact payroll reports in the current calendar year.