Currently, even if an employee does not have any payroll earnings (category 1 or 2), the software will still try to take out deductions and some taxes (PA 1219 for instance). If an employee has no payroll earnings, there cannot be any payroll deductions or payroll taxes. Any active employee not being paid should be listed on the payroll exceptions report as such, but not have a negative check.

The only negative check amounts should be for employees who have payroll earnings, but don't have enough to cover all the taxes and deductions that should normally happen. These should also stay on the payroll exceptions report so they can be investigated and the appropriate deductions reduced to make the check zero or positive.

Negative checks should never post through the payroll process (only transaction history or reverse checks). If a check is still negative at print/post, it should be ignored and a new exception report generated at print/post so that it can still be fixed.

Ideally, we should be able to rank taxes and deductions in a withholding order, and have the software go through them in order so that a check is never negative and deductions are reduced to send the check to zero.

There is a lot of manual work that has to happen when a negative check is created, and there is always the risk it won't be caught and will post a negative check to history.

by: Paralea B. | over a year ago | Payroll