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Juanita A
Level 1

Federal tax withholding

I am noticing that QB Desktop is not calculating FIT correctly.  We are still in the first QTR and some of the employees are only getting 8% taken where others are getting 14% taken.  This should still be at 10% on most of these not less and some could be up to the 12%.  I have teammates that have to pay in to the Federal all the time.  Can someone give an in site please.
Yes I have made sure that employee info in QB matches what the W4 says
Yes I have made sure that my pay schedule is set up 

4 Comments 4
QuickBooks Team
QuickBooks Team

Federal tax withholding

Thanks for taking the time to scour our Community space for potential solutions, Juanita A.


QuickBooks calculates the federal withholding taxes based on the following: 

  • Taxable wages
  • Number of allowances/dependents
  • Pay frequency
  • Filing status


You'll want to check how your employees are set up and ensure their payroll tax settings are entered correctly. Here's how: 

  1. Go to Employees, then choose Employee Center.
  2. Double-click the employee’s name to open their profile.
  3. Go to Payroll Info.
  4. Check the Pay Frequency drop-down menu and ensure 
  5. Click the Taxes button.
  6. Under the Federal tab, double-check the Filing Status and Allowances details. Edit them if needed.
  7. Hit OK.


This article can also give you important pointers about the tax calculations in QuickBooks Desktop: How QuickBooks calculates payroll taxes. Then, verify the correct tax rates for each payroll item. Here's how: 

  1. Select the Reports menu and choose Employees & Payroll.
  2. Then, Payroll Detail Review.
  3. Go to Dates. Filter the report to the specific YTD or QTD you wanted to check on.
  4. Look at the amount column of your payroll item list and review the accuracy of the rate assigned to each tax item.
  5. If the rate is incorrect, double click the tax item and tap Next until you get to the rate window.
  6. Change the rate and select next until Finish. For incorrect SUI rate, see Change SUI rate.
  7. Identify if a payroll item has an annual wage base limit. The wage base limit is a cap on the earnings that are taxed. Run a Payroll Detail Review for the year if the limit was reached for a specific employee.


Need to see your employees' year-to-date data and other payroll details? You can run a payroll liability report to get started. This article can provide more details about the report and how to run it: Run payroll liability balances report.


Here are the lists of articles you can read more about paychecks calculation in QucikBooks Desktop:


Do you have more questions about your employees? Ask away and I'll help you out. Have a great day ahead. 

Level 11

Federal tax withholding

@Juanita A 


You can verify whether or not the withholding is correct by comparing it to the federal income tax withholding tables (IRS Publication 15-T).  Your situation does not sound unusual.  We use a local payroll company (not QB) and our employee's current federal withholding varies between 0-12% depending on their W-4 withholding.




Juanita A
Level 1

Federal tax withholding

Thank you I have been trying to get this figured out.  I am looking at the 15-T forms

Juanita A
Level 1

Federal tax withholding

I had a nice call from the Tech support at QB and they sent me a link to a form from the IRS that I can easily check to make sure the FIT is being done correctly.


Thank you for all the help 

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