Payroll History and Tax Adjustments
Payroll history is used to enter payrolls that were paid before you started using Patriot. You can enter wage and tax amounts from your prior payroll records, including taxes that were withheld from employees or paid by the employer.
However, Patriot still reviews those amounts against the payroll settings, tax rates, wage limits, and taxability rules set up in the software. If the amounts entered in payroll history do not match Patriot’s tax calculations, the software may require a tax adjustment.
Tax adjustments can happen for several reasons, including:
A tax setting at the worksite or employee home is incorrect or different from your previous provider
Taxes marked exempt/not exempt are different from your previous provider
Taxability settings are set up differently in Patriot than your previous provider
Wage limits were reached, or payrolls were run out of order
Taxes such as PFML, SUTA, Social Security, Medicare or other employer or employee taxes were not calculated correctly, or a setting is different than your previous provider
An employee deduction (e.g.- health benefit) was set up differently than it was with the previous payroll provider
In short, payroll history brings prior payroll data into Patriot, but Patriot may still require adjustments if the historical tax amounts do not align with the software’s tax calculations. This helps keep filings, tax liabilities, and year-end reporting accurate.
Do I have to accept the tax adjustments?
Typically, yes. You should accept the tax adjustments if your payroll settings in Patriot are correct. The adjustments are based on the settings, rates, wage limits, and taxability rules currently set up in the software.
What if I realize something is set up incorrectly?
If you realize a payroll setting is incorrect, delete the affected payroll history entries first. Then, correct the setup in the software and re-enter payroll history after the updates have been saved.
This helps Patriot recalculate the payroll history using the correct settings.
What if my previous payroll provider calculated taxes incorrectly?
If the prior payroll calculations were incorrect, you should generally accept the tax adjustments in Patriot.
You may also need to correct previously filed tax returns with the appropriate tax agency if amendments are required. Work with your previous payroll provider for these corrections.
If the correction affects an employee’s pay, work with the employee to resolve the difference. For example:
If too much money was withheld from the employee, you can reimburse the employee using a non-taxable reimbursement.
If not enough money was withheld from the employee, you can collect the difference using an after-tax deduction.