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What to do if the paycheck appears to calculate incorrectly

What to do if the paycheck appears to calculate incorrectly

When you preview an employee's paycheck, you may find that the calculated amounts or other items on the paycheck appear differently than expected. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Use the following information to review how QuickBooks calculates payroll taxes and to investigate problems with the paycheck or in your QuickBooks payroll data.

Problems with Paycheck Amounts

If

Check the following

The hourly or salary amount seems wrong or is missing.

Is the payroll item set up correctly on the employee record? When the payroll item does not have a rate on the employee record, you will need to add the rate to each paycheck.

The salary is for the wrong amount (often a very small amount).

Are you using hourly and salary payroll items correctly? Salary items should be set up for annual wage amounts.

No hourly or salary payroll item appears, even though it is set up on the employee record.

If you normally enter the employee's hours using the time feature, and you didn't enter any hours this period, there will be no detail in the earnings table.

Overtime Rate Seems Wrong

Overtime Pay payroll items are multipliers. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . They base their rate on the rate of the Regular Pay item directly above them in the Earnings table. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Your Overtime Pay payroll item must follow your Regular Pay payroll item so that QuickBooks can calculate the correct overtime rate. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . If you have more than one Regular Pay payroll item (for example, if an employee performs two different types of work and gets different pay rates for each), you need two Overtime Pay payroll items, and each should fall below their corresponding Regular Pay payroll item in the Earnings table.

For more, see How Overtime Pay payroll items work.

Tax Calculations Seem Wrong

If

Check the following

All the taxes on the paycheck are 0.00, but the wages are not 0.00.

Your taxes aren't being calculated. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . You either need to calculate your taxes manually, or you can subscribe to one of the QuickBooks Payroll Services and have QuickBooks calculate your taxes automatically.

Taxes are missing.

Check the employee's record to see if the correct taxes are selected. This is the only way to include most taxes on a paycheck, except for custom taxes.

Federal or state withholding is 0.00.

This is normal for smaller paychecks or for the paychecks of employees who claim a large number of allowances or deductions.

Federal or state withholding is too high or too low.

Check the employee pay period, marital status, and deductions/exemptions for possible errors.

Federal withholding doesn't agree with the Federal Schedule E.

Often, it won't. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . The Federal Schedule E are manual tables. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . QuickBooks uses a calculation method usually used by computer systems. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . However, the results should be similar, within $1-$5. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . If not, check the employee pay period, the employee's marital status, and their deductions/exemptions for possible errors.

State withholding doesn't agree with my printed state tax tables.

See answer above.

Social Security or Medicare is off by a few cents or sometimes changes by a penny.

QuickBooks uses the Annual Calculation method, often called "Self Adjusting". payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . This method will sometimes result in variance from check to check as the tax is calculated on a YTD basis, keeping your total deduction with a fraction of a cent.

If the tax is off by a significant amount, there are several possibilities:

  • The wages used to calculate the tax (known as Income Subject to Tax) are wrong because one or more payroll items are set up with the wrong taxability.

  • The previous YTD tax is "out of balance" where the YTD wagebase multiplied by the tax rate doesn't result in the YTD Tax deduction in QuickBooks. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . See the Payroll Detail Review report to check this. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . In this case, QuickBooks is correctly attempting to catch up, and the tax will look either too low or too high. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . The next check should look normal.

  • The amount is actually correct, but doesn't meet your expectations. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Be careful when adjusting the amount as you may be perpetuating a previous payroll setup or YTD data error.

Straight-percentage taxes are off by a few cents or by a large amount.

See the explanation above for Social Security and Medicare.

Also check that the rate on the payroll item is correct. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . For example, a "six percent" tax should be entered as 6%, not 0.06%. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . An error like this can result in a tax that seems to "not calculate" at all as 0.06% is a very small rate.

The state unemployment amount is too small; it's cents instead of dollars.

See the explanations above for Social Security and Medicare and for straight-percentage taxes.

Many or all of the taxes seem too high or too low.

If you recently added a new payroll item, check it to make sure it was set up correctly. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . For example, if a new deduction is set up to be fully taxable, it is reducing the dollars all the taxes are calculating on. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . This can be somewhat counter-intuitive. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Making a deduction taxable reduces taxes, just as making an addition taxable increases taxes.

One or more tax amount is suddenly lower or is 0.00.

You might have met the YTD tax limit. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Most taxes have limits. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Notable exceptions are federal and state withholding and medicare.

Addition or Deduction Amounts Seem Wrong

If

Check the following

A payroll item stops calculating before it should, based on the limit set on the employee record.

Check the limit set on the payroll item. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . QuickBooks uses the lower of the two limits in determining when to stop calculating a payroll item.

A payroll item stops calculating before it should, based on the limit set on the payroll item.

Check the limit set on the employee's record. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . QuickBooks uses the lower of the two limits in determining when to stop calculating a payroll item.

A payroll item starts calculating again in January when it should not.

Check the payroll item to see if has been set up as an annual limit (on the Default rate and limit window). payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . If it has been set up as an annual limit, it will start recalculating in January.

Class Tracking or Job Costing Isn't Working Correctly

If

Check the following

A deduction, company contribution, or tax payroll item isn't getting assigned to a class.

Check the payroll item to see if the box for "Track Expenses by Job" is checked. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . It should be checked if you want to track amounts by class.

A deduction, company contribution, or tax payroll item isn't getting assigned to a customer:job or a service item.

Check the payroll item to see if the box for "Track Expenses by Job" is checked. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . It should be checked if you want to track amounts by customer:job or service item.

Other Common Questions about Paychecks

Question

Answer

How do I add a payroll item to a paycheck and also have it show up on future checks?

You cannot add a payroll item to a paycheck if you want it to show up on future checks. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . Instead, add the payroll item to the employee's record.

How do I remove a payroll item that I no longer use?

Edit the employee's record.

How do I change an employee's marital status or the number of their claimed allowances/exemptions?

Edit the employee's record.

How do I change an employee's personal information?

Edit the employee's record.

Other Checks You Can Perform

  • Locate possible setup errors in your payroll data. You may have payroll setup errors that affect withholding amounts.

  • Run the Payroll Checkup. QuickBooks Payroll subscribers can run the Payroll Checkup to scan payroll data for any discrepancies.

    If you don't see your particular issue in the list above, visit Go onlinePayroll Support, get information from Go online the American Payroll Association, or the payroll forums in Go onlineQuickBooks Community, where many special case situations are discussed by other QuickBooks users. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . You might also talk with your accountant for assistance. payroll taxes, paychecks, withholding taxes from, payroll, calculations, calculations for payroll, payroll taxes, calculations, payroll taxes, incorrect, payroll taxes (federal), withholding, payroll taxes (state), withholding, tax tables, troubleshooting, withholding, calculations, . If you don't have an accountant, Intuit can help you find one.

See also

KB ID# H_PAY_PAYCHECK_CALCULATES_INCORRECTLY
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11/7/2009 10:07:09 AM