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    Reported tips cause total payroll deductions larger than employee wage base

    Article ID: 1000140

    Problem

    Paychecks show that employees need to pay back money for taxes.

    Assumptions

    Paychecks show that employees need to pay back money for taxes.

    Expected Outcome

    You will record and print your employee's paycheck.

    Details

    To record and print a paycheck when reported tips cause payroll deductions to be larger than base wages:

    Create a payroll addition item based on net called Employee Loan. Set the account to Other Current Asset, Change the Tax tracking type to None, and no default amount.

    When you create a paycheck, use the Employee Loan payroll item with a positive amount in the Rate column. This will cause the check to zero out (for example, if the net check is -34.65, make the employee loan for 34.65).

    Record and print the check.

    Collect the dollar amount from the employee.

    • If you take it from a future paycheck, use a net payroll deduction: Loan Repayment > Employee Loan, payable to the financial institution.
    • If you collect a check from the employee:
      1. Go to the Make Deposits window and deposit to checking.
      2. Put the employee's name in the name field.
      3. Use Employee Loan other current asset account as the From account. This decreases the other current asset account and puts the money back into the checking account.

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