Note for QuickBooks Basic, Standard and Enhanced Payroll customers
Important: Intuit no longer accepts new subscriptions for Standard Payroll, but continues to support existing users of this service plan. Standard Payroll subscribers may want to explore other payroll service plans designed for QuickBooks users.
Note for QuickBooks Assisted Payroll
If you have underwithheld employee-paid taxes, you may decide to pay the
underwithheld taxes on your employees' behalf. This is called
"grossing-up." When you pay taxes for your employees, it is
considered taxable compensation and subject to federal and state taxes. Refer
to IRS Publication 15, Circular E, Employer's Tax Guide for more
To do this task
On a piece of paper, write down all employee-paid taxes that were
underwithheld. Calculate the total of the underwithheld taxes for each
Create a wage payroll item
named "gross up."
Go to the Employees menu, click Pay Employees (if you haven't set up payroll schedules) or click Pay Employees and then click Unscheduled Payroll (if you have payroll schedules set up).
Fix the tax discrepancy by creating paychecks using Unscheduled Payroll.
In the Pay Period Ends field, enter the last day of the quarter in which the
tax discrepancy occurred.
Select the employee for whom you want to create a gross-up and then click the employee's name.
In the Earnings section of the Preview Paycheck window, enter the total amount of the tax discrepancy using the wage payroll item you created. Keep increasing
the amount until the net check amount equals the total amount of the taxes you
underwithheld for this employee.
In the Employee Summary section, add the amount owed to each tax. The amount
you are adding is the amount that was underwithheld on previous paychecks. When
you have finished increasing all the employees taxes by the amount owed, the
resulting net check is 0.00.
For example, if you underwithheld Social Security and Medicare each by
$250.00, you would add an additional 250.00 to the amounts already withheld
from this paycheck for Social Security and Medicare.
Click Save & Close.
Click Continue and then click Create Paychecks.
If you do not want to enter a gross-up, you can
fix the underwithheld taxes by
collecting them from your employee instead.