Tip of the Month

Sage 100 Tip of the Month: New overtime and tip rules

By on March 2, 2026

Recent legislative updates under the One Big Beautiful Bill Act (OBBBA) “No Tax on Overtime and Tips” requirements are creating important changes for payroll processing. For organizations leveraging Sage 100 Payroll, staying informed and properly configuring your system will be critical to maintaining compliance.

The good news? Sage has already published detailed guidance and resources to help customers implement these new rules correctly. This month’s tip highlights where to find those resources and what steps you should take now to prepare your system.

Tip summary

Sage has released a comprehensive article in the Sage Community outlining how to implement the new OBBBA “No Tax on Overtime and Tips” requirements in Sage 100. The post includes additional Knowledgebase (KB) articles that provide step-by-step guidance for processing qualified overtime and tips under the updated rules.

If you use Sage 100 Payroll, it is especially important to review these materials and confirm your system is running a supported version, specifically Payroll v2.26, to properly track and process these changes.

Key resources and steps to take

Step 1: Review Sage’s official guidance

Start by accessing Sage’s published article:
New OBBBA No Tax On Overtime & Tips Resources from Sage

This post includes links to several detailed KB articles to guide implementation, including:

These resources outline how to configure payroll to correctly apply the new tax treatment and maintain compliance.

Time off requests

Step 2: Confirm you are on a supported version

It is more important than ever to ensure you are running a supported version of Sage 100, especially if you use the Payroll module. To properly track overtime under the new requirements, your system must be running Payroll v2.26.

If you are unsure which version you are currently running, now is the time to verify.

Step 3: Plan for upcoming Sage releases

Sage has announced the following expected release schedule:

April 2026

  • Sage 100 v2026
  • Sage 100 v2025.2
  • Sage 100 v2024.4
  • Payroll 2.26.1

Planning ahead for these updates will help ensure a smooth transition and avoid disruption to payroll processing.

Why this tip matters

Payroll compliance is not an area where organizations can afford missteps. Changes to overtime and tip taxation impact employee pay, tax reporting, and overall compliance risk. Ensuring your Sage 100 system is properly configured, and running a supported version, helps protect your organization from errors and unnecessary complications.

If you need assistance reviewing your version, upgrading your system, or implementing the new overtime and tips requirements, our Sage 100 team is here to help. Contact our support team today and ask for Shalise Quinlan or Deanna Carrillo.

Be sure to check back next month for our next Sage 100 Tip of the Month, where we’ll continue sharing practical ways to help you optimize your system and stay ahead of important updates.

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About the author:

Deanna Carrillo

Director

Deanna Carrillo is a seasoned Sage 100 ERP Director with 20 years of experience supporting and delivering ERP solutions that transform business operations. As both a project manager and practice leader, Deanna works closely with organizations to address ongoing support needs, guide successful implementations, and ensure long-term system performance. She leads the Sage 100 team with a strong focus on client relationships, practical problem-solving, and delivering consistent, high-quality outcomes.

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