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Experienced Member
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Social Security and Medicare Deductions

The taxes (Social Security and Medicare) for an employee whose pay is based on timesheet entires are incorrect and we have to manually calculate and enter them for each payroll period so the 941 calculations are correct at the end of the quarter. Calculation of these taxes for salaried employees are correct. This first started being a problem the middile of August. Payroll updates are current.

Best answer 11-13-2018 01:16 AM

Accepted Solutions
QuickBooks Team

Re: Social Security and Medicare Deductions

Thank you for telling me when this issue started, dlb53. I'll give you options to fix the calculation of these taxes.

It's possible that an employee's paycheck on August has an overpayment or underpayment for Social Security and Medicare. When that happens, QuickBooks will try to automatically correct the calculation on the next pay period. However, since you've started manually changing the taxes each payroll, the program wasn't able to auto correct.

I have two options for you to straighten out the tax calculations:

  • Do a liability adjustment for Social Security and Medicare, or
  • Stop manually changing them on the employee's paycheck and let QuickBooks do the correction on the succeeding paychecks.

Let's run the Payroll Detail Review report and go back to the paychecks for August.

Here's how:

  1. Click Reports at the top.
  2. Select Employees & Payroll, and then click Payroll Detail Review.
  3. Filter Date from August 1 until the end of the year (December 31).
  4. Click the Customize Report button in the upper left-hand corner, and then click the Filters tab.
  5. In the Search Filters box, type Payroll Item.
  6. Click the All payroll items drop-down, and then select Multiple payroll items.
  7. Scroll down and check Social Security and Medicare for employee and company.
  8. Click OK twice.

Once done, kindly review the employee's paychecks for August to find out the discrepancy. When you see it, you can follow the options I provided above to get it resolved.

Please leave a reply if you have additional questions. I'll get back to you as soon as I can.

4 Comments
QuickBooks Team

Re: Social Security and Medicare Deductions

Thank you for telling me when this issue started, dlb53. I'll give you options to fix the calculation of these taxes.

It's possible that an employee's paycheck on August has an overpayment or underpayment for Social Security and Medicare. When that happens, QuickBooks will try to automatically correct the calculation on the next pay period. However, since you've started manually changing the taxes each payroll, the program wasn't able to auto correct.

I have two options for you to straighten out the tax calculations:

  • Do a liability adjustment for Social Security and Medicare, or
  • Stop manually changing them on the employee's paycheck and let QuickBooks do the correction on the succeeding paychecks.

Let's run the Payroll Detail Review report and go back to the paychecks for August.

Here's how:

  1. Click Reports at the top.
  2. Select Employees & Payroll, and then click Payroll Detail Review.
  3. Filter Date from August 1 until the end of the year (December 31).
  4. Click the Customize Report button in the upper left-hand corner, and then click the Filters tab.
  5. In the Search Filters box, type Payroll Item.
  6. Click the All payroll items drop-down, and then select Multiple payroll items.
  7. Scroll down and check Social Security and Medicare for employee and company.
  8. Click OK twice.

Once done, kindly review the employee's paychecks for August to find out the discrepancy. When you see it, you can follow the options I provided above to get it resolved.

Please leave a reply if you have additional questions. I'll get back to you as soon as I can.

Established Community Backer ***

Re: Social Security and Medicare Deductions

This might be the issue: "whose pay is based on timesheet entires are incorrect"

 

Because a lot of payroll clerks do not understand how Dates are applied here.

 

The timesheet has Days Worked and the Paycheck is for that Pay Period = dates that fall in the pay period. but the Paycheck is the Financial activity. Taxes are only owed because the Money happened. That means the Pay Date is what applies for purposes of the 941.

 

Example: The first paycheck in Oct is for the second half of Sept (1st-15th) and that makes it the 4th Quarter 941 and that makes the Liabilities October liabilities, and if you are a monthly payer, that is due by Nov 15th.

 

Evaluate everything by date; you might have been working off of Pay Period, as if that applies to the 941. It doesn't use that. It uses Pay Date. Run your Payroll Summary report for October, to see Oct 941 data; there is no Timesheet Date relationship to this. It is Money that matters, not Dates Worked.

Experienced Member

Re: Social Security and Medicare Deductions

Thank you for the prompt reply. Using your instructions to print a Payroll Detail Review we were able to identify when the problem first occurred and correct it.

QuickBooks Team

Re: Social Security and Medicare Deductions

Hello, @dlb53.

 

Pleased to hear that your concern was fixed and QuickBooks was able to help you with your business.

 

Feel free to post again if you have any other future concerns about QuickBooks. Wishing you continued success!