Inaccurate Social Security & Medicare Taxes Withheld for only one employee

Thank you for posting here in the Community, @Susan R.

Let me step in and assist you in fixing inaccurate Social Security and Medicare Taxes calculation in your employee.

You can update your QuickBooks Desktop and payroll tax table to the latest release version. Since when the two product is an outdated version, it might cause inaccurate calculation on your taxes.

You can follow these steps on how to update your QuickBooks Desktop account manually:

1. Close your company files and your QuickBooks Desktop account.
2. Click the Windows icon on the toolbar.
3. Search for QuickBooks Desktop.
4. Right-click the icon and choose Run as administrator.
5. In the No Company Open screen, go to the Help menu and select the Update QuickBooks Desktop option.
6. Click the Options tab.
7. Select Mark All and then hit Save.
8. Go to the Update Now button, then choose the Reset Update checkbox.
9. Click Get Updates when you're ready.

For more detailed information on updating your QuickBooks Desktop account, visit this article: Update QuickBooks Desktop to the latest release.

After that, you can update your payroll tax table to complete the troubleshooting. Rest assured that you'll get the most current and accurate rates and calculations for state and federal tax tables.

You can read this article to learn how QuickBooks calculate taxes: How QuickBooks calculates payroll taxes.

Please know that I'm always around here in the Community to help. Keep safe, and have a good one.

How are you determining that the tax is wrong?

It sounds like QB is trying to "catch up" so that the YTD tax is correct based on the YTD wages.  QB calculates most fixed percentage taxes like Social Security on a YTD basis, like this:

YTD Wagebase for the tax including the new/current paycheck * tax rate = Total Tax.

Total Tax - Tax on all other paychecks = current tax for this paycheck

If you run the Payroll Detail Review report (from the Reports | Employees & Payroll menu) and focus on SS for this employee, does QB think it is out of balance?

On that report you can see the wagebase, the actual tax amount, what QB thinks it should be, the difference, and the User Edit column will tell you whether or not someone overrode the amount manually.

I have done all of the suggestions listed in the answer including downloading the new updates every payroll. First quarter all social security and medicare taxes were correct. Second quarter and third quarter they were wrong. Was told by Intuit rep. that it was because we were making changes to hours or deductions after payroll was calculated, but before it was sent. Found that is not true, taxes are recalculated after changes affecting wages are made. After running the current payroll, I tested several checks before making any adjustments and have about 10% calculating incorrectly. I do not want to manually adjust every payroll. 

The payroll detail review shows the correct income subject to taxes, shows the payroll tax rate, the amount of tax and shows that the difference is 0. When I download to excel and add a column to calculate off of the income subject to taxes and the tax rate, I get different amounts. Is this some sort of unresolved glitch in the program. If so what is the fix?

Let me share some information on how QuickBooks calculates payroll taxes, Andrea61. 

I appreciate you performing the steps provided by my colleagues and downloading the most recent QuickBooks Desktop software release and Tax Table updates. This helps to keep your software up-to-date and to get the newest payroll tax table in your software.

When the payroll taxes are not deducting on your employee's payroll, it's possible the total annual salary exceed the salary limit or the gross wages of the employee are too low. Also, the Federal and State Income (FIT and SIT) taxes are calculated based on the following criteria:

• The agency's wage and tax calculation table.
• The employee's filing status, number of allowances, or extra withholding amount in the employee setup.
• Pre-tax deduction items were included on the paycheck.
• Changes in pay frequency (creating extra paycheck outside of normal pay schedule).
• Creating a paycheck with wages that has lesser or larger amount than what the employee normally gets in a pay period.

See How QuickBooks Desktop calculates payroll taxes to understand why paycheck shows the tax amount as $0.00 or under collected. We can try reverting the employee's paychecks to see if the payroll taxes are calculating. QuickBooks has an auto-calculation feature that carries over the underpaid taxes for the next payroll run. For other troubleshooting options on why payroll taxes are not withholding, check out these articles: 

• Payroll items on a paycheck are not calculating or are calculating incorrectly
• QuickBooks Desktop calculates wages and/or payroll taxes incorrectly

If the same thing happens, let's run the Verify and Rebuild Data tool in your QuickBooks Desktop. It could be there are data integrity issues for both company files causing this issue. 

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always. 

Federal and State Taxes are calculating correctly (I hope - I trust the tax tables). It is only the Medicare and Social Security, as these are based on a percentage, it seems that this would be a simple calculation (the employees in question have not hit the annual social security max). For instance, one employee has a taxable wage base of 3212.80, it calculated SS at 189.86 and Medicare at 44.40. SS should be 46.59 and Medicare should be 199.19. 

As I stated before, the first quarter everything was calculating correctly. Second quarter was off about $55 and third quarter was off $95. This payroll alone is off $71 and about 25% of the employees are incorrect. 

An employee at the call center told me it was because we make changes to the paychecks after calculating, but before submitting; I found that taxes do recalculate when changes are made, so that information was not correct. 

If I have already started the payroll process and have already calculated paychecks, will running the verify and rebuild tool fix the existing problems, or will I have to delete all checks and start again?

Thanks for joining us today, @Andrea61.

I have some information about running the verify ad rebuild  tool. These tools are most common for data issues within the company files. It doesn't change the paycheck information. Thus, you'll have to edit or delete and recreate the checks to correct them.

For more information about the tools and paycheck, check out these guide:

• Verify and Rebuild Data in QuickBooks Desktop.

• How do I create a paycheck for an employee?

After recreating the checks, run a payroll summary report to verify the YTD information. Just go to Reports at the top, then select Employees & Payroll, and then Payroll Summary. This report will give you the entire payroll information for each employee.

In case you need help with other payroll tasks, click this link to go to our general payroll topics with articles.

If you have other questions or concerns, please let me know. I'll be around for you. Take care and have a great day ahead.

I have verified and rebuilt data files I am getting a message after reboot:

QBWC1085: There was a problem with the log file Quickbooks Web Connector will continue without log file.

Is that a problem?

Thank you for getting back, @Andrea61.

Yes, once you open QuickBooks, this error happens when the QWCLOG.TXT file used by the Web Connector program becomes damaged or inaccessible. The connector is used to connect some web-based programs to QuickBooks.

If you haven't linked QuickBooks to any third-party programs, you can fix the error by removing the Web Connector from the Startup menu. Let me guide you on how.

1. Log in as a Windows administrator.
2. Go to C:\ProgramData\ Microsoft\Windows\Start Menu\Programs\Startup.
3. Delete the QuickBooks Web Connector.
4. Restart the computer and open QuickBooks.

If there's a connected application, you can rename the QWCLOG.TXT file to resolve the error.

1. Close completely out of QuickBooks and Web Connector.
2. Go to: C:\ProgramData\Intuit\QBWebConnector\log.
3. Rename the QWCLOG.TXT to QWCLOGOLD.TXT.
4. Reopen Web Connector.
5. Restart the computer, then open QuickBooks and login to your third-party application.

Once done, try creating a dummy paycheck and see the deductions from there.

If paycheck still doesn't calculate taxes correctly, please make sure your payroll item is set up accurately. For your guide, you can check out these articles:

• Payroll items on a paycheck are not calculating or are calculating incorrectly
• QuickBooks Desktop calculates wages and/or payroll taxes incorrectly

Please feel free to add a comment below if you have any other questions. I'm always here to help. Have a great day!

Sorry, I reversed the should be values. 

Ok, last week I rebuilt data files and fixed the Web connector file. I then deleted 95 paychecks, reentered all the hours and recalculated the payroll. I have the same errors on the same employees.

The social security and medicare payroll items are set up the same for all employees, so it's not a set up error. I think this is an error that needs some looking into on the intuit side of things. I would love to have one of your IT people contact me so they can look at everything that is running in the background and fix it. As these errors are getting larger every time I process a payroll, it would probably be best to do it soon. Next payroll is November 9th. My contact information is on file. Can't wait to hear back.

Hi there, @Andrea61.

You can connect with our Support Team by setting a scheduled call back from your QuickBooks Desktop file.

Here's how:

1. Open QuickBooks.
2. Go to Help, then select QuickBooks Desktop Help.
3. Select Contact Us.
4. Enter a brief description of your issue, then select Let's talk, and then choose a way to connect.

As you continue working with QuickBooks, you can as well open the topics from our help articles in case you need related resources in the future.

If there's anything you need assistance with, let me know by adding a comment below. It's my pleasure to help. Keep safe!

I am having the same problem.  I have 3 employees, only one is calculating incorrectly.  And it's just the employee side, the employer side is correct.  I've used QB payroll for years and this is a first for me.

Thanks for joining in this conversation, @sdtaxlady. I'm with you in getting past this issue. 

First off, let's ensure that your tax table is updated as this may be due to an outdated tax table version. Then, revert the paycheck if you are still in the process of creating the paycheck. Here's how: 

1. Go to the Employees menu, then click Payroll Center.
2. Go to the Pay Employees tab.
3. Click the Resume Scheduled Payroll button.
4. Right-click the employee's name, then select Revert Paycheck.
5. Submit payroll when you're ready.

Once done, click the employee and click Open Paycheck Detail to see if the taxes are already calculating correctly.

If the issue continues, you'll want to check these help articles for more insights on what's affecting the calculations and some easy steps to fix issues when taxes calculate incorrectly:

• Payroll items on a paycheck are not calculating or are calculating incorrectly
• QuickBooks Desktop calculates wages and/or payroll taxes incorrectly

It would be an honor for me to help you again on your next post here in the Community, @sdtaxlad. Have a great day ahead. 

I've done all the things that have been suggested.    I am a QB Pro Advisor and have problems getting any satisfaction when I have questions.  To be honest I am looking at other vendors as I am dissatisfied with your support.  I have people looking to me for answers and I can't even talk to someone to get any help.  

I did the steps you suggested and received a message that I would get a call in 5 minutes. 3 hours later I had to leave as my work day had ended. Any other suggestions? 

Hi there, @Andrea61.

I appreciate you following the suggested steps from the previous post. Since you're still not able to get the result that you wanted. I suggest contacting again our support QuickBooks Desktop Customer Support Team. They can further check on your account and provide you an additional option on how to get things done.

Here's how to contact our support team:

1. Log in to your Quickbooks Desktop.
2. Go to the Help icon, then click QuickBooks Desktop Help.
3. Click on QuickBooks support representative.
4. Select QuickBooks Desktop, then click Continue as a guess.
5. Choose the QuickBooks version you are using.
6. Enter a brief description of your concern on the Tell us more about your question box.
7. Select from the options on how you wanted to contact support.

If you don't see the Help icon, you just need to update your version of QuickBooks Desktop. This is free and should just take a few minutes and an internet connection.

leave a comment if you need additional help. I'll be happy to assist you further. Have a good day.

Unfortunately I am in the middle of another payroll, and I have found that it is not helpful to involve support as they always tell me we have done something wrong on our end and we end up deleting all the checks and starting over. With the holiday this week, we don't have the time to do that. I was trying to get this resolved last week so we wouldn't be processing another incorrect payroll. 

Hello Andrea,

I have a client that is using QB Ent 20 and had the same issue - it only affected one employee starting with their 8/31 payroll but it was only the employee medicare that was doubling and I caught the error when preparing their Q3 941.

I found a "work around" that fixed it so that the taxes would calculate correctly (after spending hours trying everything you have tried).

Here's what worked for me. I made the employee exempt for medicare taxes and then proceeded to correct the old paychecks removing all the amounts withheld for medicare (the incorrect ones) into a "clearing" payroll item that I labeled tax adjustment. Then on the last paycheck, I let QB calculate the crazy wrong medicare tax amount (even though the employee was labeled as exempt) and plugged the difference to that tax adjustment account.

I then made the employee subject to medicare tax again and when I ran a dummy payroll, it seemed to fix it.  So, I think what you might need to do is let QB override the medicare with the amount it wants to calculate (even though you know this is wrong) and then make an adjustment to add back to the employee's net pay the amount over-withheld. At least this way the medicare amount will be correct on payrolls going forward. 

I'm sure this will need to be a manual override when you prepare the Q4 941 and W-2s, but at least the payrolls from here on out should be correct.

I am having the same issue with one paycheck for one employee that I am trying to create for the first quarter of this year. Every time I create the paycheck it increases Employee Social Security and Medicare Withholding  by even more than the previous attempt. I have verified data and performed a rebuild and rebooted as well as updated payroll and QuickBooks several times. My accountant and I have been working on this all day. There is obviously a glitch with Quickbooks and I have no confidence that anyone I reach in Support will help based on past experience. 

I would love to know if you find an alternative.  I spent the day undoing “fixes” support made in my file that actually created more problems. 

I have been having the same issue with 1 employee for most of 2020. For 1 employee QuickBooks adds another Medicare Employee deduction. I talked to someone is support and after an hour told them I had to go. They were zero help. Reading all these threads I was hoping someone would have a solution without additional hours of work, but that appears unlikely. I was also hoping that QuickBooks would correct itself with the new year and starting off fresh. No luck. It did the same thing with the first payroll of the year. Any suggestions?

Hello @psteele1,

Let me offer help so you can start creating your employee's paycheck with the correct calculation of taxes.

To start with and if you haven't yet, we can update and install the latest payroll tax table. Let me show you how.

1. Go to Employees.
2. Select Get Payroll Updates.
3. On the You must update before: section, select Download the entire payroll update.
4. Click Update.

Additionally, I've got you this helpful article for guidance in preparation for the 2020 tax season: QuickBooks Desktop Payroll Year-end Checklist.

If you have any other questions, please let me know in the comments below. I'll be here to lend a helping hand.

I have the most up to date payroll tax table and payroll updates. QuickBooks started this error back in January 2020. The only thing that changed or was added during that time was the S-Corp Medical Insurance entry for the 2019 payroll. But that should not have caused any errors and I even deleted it and re-entered it to make sure it was done correctly. This appears to be a problem with the software. I have see other threads of companies complaining about the same thing.

Hey there, psteele1.

Thanks for dropping by the Community this afternoon. If you followed the steps provided by my colleague in making sure your payroll updates are in place, then I would recommend reaching out to support. The steps can be found earlier in this thread, however, I'll reiterate them down below:

1. Log in to your Quickbooks Desktop.
2. Go to the Help icon, then click QuickBooks Desktop Help.
3. Click on QuickBooks support representative.
4. Select QuickBooks Desktop, then click Continue as a guess.
5. Choose the QuickBooks version you are using.
6. Enter a brief description of your concern on the Tell us more about your question box.
7. Select from the options on how you wanted to contact support.

I'm also including a couple helpful articles for you to check out at your leisure.

• QuickBooks Blog.
• How to set up payroll taxes in your state.

Thank you for your time and if you have any other questions, please don't hesitate to post here anytime.