In the Payroll Calculation tab, the Tax Type  should be set to '0-None' and no tax boxes checked in the 'Subject to' box. 

Thanks for the help. I think I posted in the wrong area, sorry! Need SAGE 300 CRE. Apologies! 

Hi WarrenH

Since it looks like you are using Sage 300 CRE, I am going to move this post to that Support Group so that other users of this software will see it and can offer you their thoughts and insight.

Thanks,

Erzsi

Is it setup for direct deposit?  See Knowledgebase:  https://support1.na.sage.com/selfservice/viewdocument.do?noCount=true&externalId=26573&sliceId=1&isLoadPublishedVer=&docType=kc&docTypeID=DT_Article&stateId=1570&cmd=displayKC&dialogID=72486&ViewedDocsListHelper=com.kanisa.apps.common.BaseViewedDocsListHelperImpl&openedFromSearchResults=true

My other question is:  Is the deduction setup in the employee's file anything other than "Default" in the calculation method?

No, was not a direct deposit. Employee setup is default. Deduction setup: type normal, flat amount, boxes are checked for before employee taxes (and appropriate employer taxes). Our medical and IRA contributions are set up the same and work fine. I checked last years W2s, and these funds did not reduce our employees taxable income. I became involved in payroll recently and have been auditing the system... this is one of several issues I've found. I think we have a big mess on our hands... But, I can't understand why SAGE is not reducing taxable income by these amounts. It works much like our IRA contributions. 

Hi WarrenH

There are occasions where even though the checkbox is selected in the UI, in the database it's not. Try unchecking the pretax checkboxes and saving the deduction, then check them again and save again.

Enter a test check with some wages (I like a nice round number like 1000.00) with only the HSA deduction (0 out any other deductions).

Accept the check and check the tax amounts in Inquiry, Check information, Check Activity, New file and double click the employee tax amount. The Taxable for SOC and MED should be 1000.00 less the HSA amount.