Solution:

In some situations where wages are low and tips are high, the system creates a negative check amounts because the tips are also taxable. The taxes calculating on the tips cause the check to become negative. This article explains how to allow the system to adjust the taxes for a check with tips so that the net check automatically calculates to zero.

To allow Sage Pro ERP 7.4 to adjust taxes to create a zero check, the following setting must be activated:

1. Open Payroll.
2. Under the File menu, click  Change Setup Information.
3. Select  Calculate Checks to zero.
4. Save changes.

The privilege sequence defines in which order the taxes are deducted. Higher sequence numbers are deducted first. To assign privilege sequences to taxes, follow the steps below:

1. Open Payroll.
2. Under the Maintain menu, point to Taxes and click  Tax Master.
3. Select the appropriate tax ID.
4. Click Edit.
5. Type the correct privilege sequence number (99-0) in the Privilege Sequence field.
6. Save changes.

The system will now deduct the taxes in the specified order and will not create a negative check.

Important:
 Only employee taxes are adjusted in this situation; employer taxes remain unaffected.

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