Error: Wage Subject to Withholding Less Than Zero

If you run into an error in Payroll data entry that says, “Wages Subject To W/H Less than Zero” or “Wages Subject To Withholding Less than Zero,” here are a few potential fixes:

Resolution 1:  A Deduction Code has been set to reduce a tax that an Earnings Code is not subject to.

  1. Make note of any Earnings Codes used for this employee.
  2. Open Payroll | Setup | Earnings Code Maintenance.
  3. Click Look up and select applicable Earnings Codes.
  4. Make note of the selections in the Subject to Federal Tax, Subject to State Tax and Subject to Local Tax (if applicable) sections.
  5. Make note of any Pension Plan or Cafeteria Plan Deduction Code(s) used for this employee.
  6. Open Payroll | Setup | Deduction Code Maintenance.
  7. Click Look up and select the applicable Deduction Codes.
  8. Click Taxes.
  9. Any unchecked tax on the Earnings Code also must be unchecked in the Pension and/or Cafeteria-type Deduction Code.
    • Note:  It’s not possible to reduce the Taxable Amount if it was never subject to the tax.

Resolution 2:  This error may occur if a Local Tax Code was set up and the “Require Local Tax Reporting” box in Setup Options has subsequently been unchecked. The local record field isn’t visible when reviewing Earnings Code or Deduction Code Maintenance. The local records, however, still exist in the file.

  1. Open Payroll | Setup | Payroll Options. Check Require Local Tax Reporting.
  2. Check the Local Tax Code taxes.
  3. Verify that all unchecked taxes in Earnings Codes also are unchecked in Pension/Cafeteria Plan Deduction Codes.

Resolution 3:  An earnings code with negative amounts is reversed and there’s not a positive amount on the check with the same earnings code.

For example:

  • Employee’s original check:
    • Earnings code 01 regular pay      $  1000.00
    • Earnings code 17 commission          500.00

The original check was cashed, but in the following pay period the employer needed to reverse $200 of that commission pay.

If the following is entered, the error will occur:

  • Earnings code 01 regular pay        $  1000.00
  • Earnings code 17 commission      -200.00

Only reduce Earnings Code 17 from Earnings Code 17. Earnings Code Maintenance drives the taxes withheld, and they can be set up differently for each earnings code.

The following is an example of the correct way to enter:

  • Earnings code 17 commission pay     $  1000.00
  • Earnings code 17 commission pay          -200.00

For questions on this or other Sage 100 topics, please contact us.

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