There are 2 kinds of taxes: company-paid and employee-paid.
- Every tax calculated and tracked in QuickBooks is set up on the employee record and is added to employee paychecks, even when it isn't included in the employee's gross-to-net-pay calculation.
- All company-paid taxes are added to paychecks but they don't impact net pay and aren't printed on pay stubs. They do, however, appear in payroll reports.
- Taxes set up on an employee's record are calculated on the employee's paychecks. These taxes are added to the balance to pay for both company and employee-paid taxes. If the tax isn't set up on the employee record, it isn't added to the paycheck. Even if you add it to the employee record later, it isn't added on paychecks which have already been created.
- How can I correct the numbers if I've done this?
If you have made this mistake and need to correct it, run Payroll Checkup to fix the "wage base" for this tax, and on the next payroll, many straight-line percentage taxes (Medicare, SS, FUTA, SUI and SDI, but not FWH and SWH) will "catch up."
- If you remove a tax from an employee, that employee will almost always be fully or partially excluded from any applicable tax forms including 941, 940, and your state tax forms (if you're an Enhanced Payroll service user).