Toast Payroll: Employee Accidentally Marked Themselves Tax Exempt

How do I correct an employee if they marked themselves as tax-exempt on their Form W-4?

Occasionally, we see that an employee marked themselves as exempt on their federal or state Form W-4 by accident, causing them not to be taxed on payroll. If this was an accident, the first step is to fill out a new Form W-4 in the system, no longer marking themselves as exempt, so they will be taxed moving forward. Knowing that they missed previous taxes, when updating their Form W-4, the employee can mark to have additional taxes withheld to increase taxes on future payrolls to catch up on missed tax withholdings.

In order to correct past checks that were taxed incorrectly based on the Form W-4 error, after the employee has filled out a new Form W-4, process voids & then re-record the checks via Quick Calc. With this option, standard void & re-record rules apply- meaning only checks in the current quarter can be voided (otherwise a wage amendment is needed), and you would need to reconcile any difference in net pay with the employee directly.

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.