If you mistakenly withheld an amount from a paycheck and that withholding was marked as tax exempt it affects the taxes deducted from the check and your employer share of taxes for Social Security, Medicare, FUTA and SUTA (if it was marked as exempt from any of those items).

We’ll assume the check has already been cashed. You’ll void the check in Procare then repost it so the amount withheld is no longer treated as tax exempt (steps below). You won’t actually give them a new check – this is just for calculation purposes. Finally, you’ll adjust the taxes on their next check to account for the difference.

To correct the issue:

  1. Void the Original Check. You’ll probably want the Void Date to match the original Print Date. See: How Voids Affect Financial Reports
  2. Do you need to change the exempt status of the withholding?
    1. If you intended to withhold the money, but the withholding should not have been marked as exempt go to Payroll Formulas and remove the “Is Exempt” check marks as needed.
    2. If the withholding was correctly marked as exempt, but you did not intend to withhold anything from a particular employee then Delete the withholding from their Employee Withholdings screen.
  3. Calculate the Paycheck a second time, but do not post it yet.
    1. Go to the Withholdings tab and make a note of the correct amounts that should’ve been withheld for everything.
    2. Then type over the withholdings with the amounts you really withheld.
      Note: If there is no place to put the amount (example: withheld for retirement plan, but person does not participate in the plan) then add it into the Federal Income Tax box. You’ll adjust it on their next check.
    3. On the Summary tab confirm the Check Amount is the same as before.
    4. Post the check using the original Post Date and Print Date.
  4. On their next check manually adjust the taxes to make up the difference.
  5. You may need to manually adjust your next tax deposit, if the deposit was paid prior to making the correction.