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How QuickBooks calculates payroll taxes

QuickBooks calculates your payroll taxes on the year-to-date amount instead of per transaction. QuickBooks automatically adjusts many flat-rate taxes, including:

  • Social Security

  • Medicare

  • Federal unemployment (FUTA tax)

  • State unemployment (SUI) (except for states that can have mid-year rate changes effective on a date other than January 1)

  • State disability (SDI) (except for HI and NY because of a weekly wage limit)

  • Predefined local taxes (except taxes based on quantity or calculated with a deduction)

Example of the calculation method:

Medicare tax for current pay period

Medicare tax for next pay period

$ 1217.5 x 1.45% =

$ 17.65375 rounded to

$ 17.65

$ 1217.5 (previous wages) +

$ 1217.5 (current wages) =

$ 2435 x 1.45% = $ 35.3075

rounded to $ 35.31 (total tax) -

$ 17.65 (previous tax) =

$ 17.66

See also

KB ID# H_PAY_HOW_QB_CALC_PAYROLL_TAXES
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PPRDQSSWS403 9138 Pro 2017 3b5734