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MNarwid
Level 1

2020 W-4 - how to handle for hourly employees when unclear of yearly salary

I have been reviewing the new W-4 and a bit confused.  I have hourly employees that many have overtime added.  I am unclear as to how to handle "estimating" their yearly payroll to calculate the taxes.  When they had allowances, the tax amount was calculated each time.  Now what?  This form is confusing if you have to know  a year in advance what someone may get paid.  Or, am I just missing something?

 

3 Comments
Tori B
QuickBooks Team

2020 W-4 - how to handle for hourly employees when unclear of yearly salary

Hi there, @MNarwid

 

Welcome to Community. I'd be happy to explain the W-4 process. 

 

When you're estimating the yearly payroll, you can also add in estimated overtime if you want, but keep in mind that this is only an estimate. You would only need to factor that your employee worked and was paid the whole year. (For example, hourly wage X 40 X 52).  

 

For more details on what's changing with the Federal W-4 you can check out this article: https://quickbooks.intuit.com/learn-support/en-us/set-up-employees/what-s-changing-with-the-federal-...

 

If you have anymore questions or concerns, please feel free to reach back out. I'm only a post away. Take care!

 

 

 

MNarwid
Level 1

2020 W-4 - how to handle for hourly employees when unclear of yearly salary

Thanks, but I guess what I am concerned about is what if the employee(s) are paid more than anticipated - either by a bonus or significant overtime.  If their "estimated withholding" is based on lower amounts, that will definitely be detrimental to them.  Can their withholding amounts be manually modified during the year if this happens?

Kendra H
QuickBooks Team

2020 W-4 - how to handle for hourly employees when unclear of yearly salary

Good Morning, @MNarwid.

 

Thank you for your feedback. I'm happy to help you with the 2020 W-4 form.

 

If this is your first year filing a W-4 form, I'd consider filling out the new form, but if this isn't your first year filling, it's not required for your employee(s) to fill out another one. If they would like, your employee(s) can fill out the 2020 version and have it up to date. Their information that's on file with the most recently-submitted form is what they'll go by.

 

I recommend reaching out to your accountant to get the best result on your tax form.

 

Also, I'm going to attach this link below with information explaining the new 2020 W-4 form and everything you need to get ready for the new year:

2020 W-4 Form Information

 

I have another link if you'd like to speak to a QuickBooks Desktop Payroll agent as well:

QuickBooks Desktop Payroll Support

 

If you have any more questions, I'm always a comment away. Have a great rest of your day!

 

 

 

 

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