Why is my employee's net pay $0?
Question
Why is an employee's net pay showing as $0.00 when their gross pay is correct?
Answer
An employee's net pay can be $0 if their gross wages are fully offset by various withholdings, such as taxes and deductions. This can occur if the total amount of withholdings for the pay period is equal to or greater than the employee's gross wages, often due to their tax settings rather than a system error.
Note: 7shifts is not authorized to provide tax advice. If an employee has questions regarding their tax withholdings, they should consult a tax professional.
Why this happens
A $0.00 net pay is often caused by specific tax settings on an employee's W-4 form. The most common cause is the employee requesting an additional flat-dollar amount to be withheld from every paycheck. If this additional withholding amount is higher than the remaining pay after standard taxes, the net pay will result in $0.00.
What to do
Review the Payroll Journal to identify the specific deductions and taxes impacting the employee's pay.
- Log in to the 7shifts web app as an Admin.
- Select the Payroll tab in the left navigation bar.
- Locate the specific payroll run and select the three-dot menu.
- Select Payroll Journal to view the breakdown of earnings and deductions.
- Locate the employee in the Payroll Journal and review the Federal Tax and State Tax columns to identify the source of the deductions.
- Instruct the employee to review their W-4 form settings if the deductions appear incorrect based on their current filing status.
Note: Employees can update their W-4 directly within their 7shifts account if changes are required.