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norm-sheppard
Level 1

no income tax deducted?

one of my employees didn't have any income tax deducted
1 Comment 1
KimberlyS
QuickBooks Team

no income tax deducted?

You'll want to review your employee setup and determine if they qualify for the income tax deduction, norm. I'll ensure taxes are accurately withheld from paycheques using the provided information below.

 

In QuickBooks Online Payroll, appropriate taxes are automatically calculated based on how you set them up. Hence, let's review your employee to see if he is exempted from the Federal Income Tax.

 

Here's how:

 

  1. Head to Payroll in the left menu and click Employees.
  2. Select the employee from the list, then pick Edit under the Tax withholdings box section.
  3. Scroll down to the Tax exemptions part of the form.
  4. Uncheck the box for each tax that your employee isn't exempted from.
  5. Click Save.


EE tax exemptions_QBO.jpg

Additionally, you can review your employee's TD1 form to determine their tax exemptions. If you're still in doubt, you'll want to consult with a tax professional or financial advisor for guidance.

 

If your setup looks good,  another reason an employee doesn't have an income tax deduction is that they haven't reached the minimum taxable threshold. You can verify this through these steps:

 

  1. Proceed to the Payroll tab and click Run payroll as if you were to run payroll.
  2. Adjust the employee's hours to a higher amount, then select Edit paycheque under the Action column to examine each deduction without submitting the pay run.
  3. Navigate to the Employee Taxes section to see a deduction for income tax.

 

Moreover, you can utilize the diverse range of payroll reports to know how much you have compensated your employees, evaluate taxable wages, and oversee your tax liabilities and payments.

 

Please get back to us in this thread if you have additional queries regarding income tax deductions and other related concerns in QuickBooks Online Payroll. We are keen to help with any information you need.

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