My Simple IRA Company contributions are not calculating correctly. Seems to work fine for salary, hourly wages, but not on bonuses and other types of compensation. Help!

Let's make sure that we've set up the IRA contribution correctly, chrisc1.

We'll need to check and see if we've entered the correct rate and details. Here's how to verify the payroll information:

1. From the Lists menu, select Payroll Item List.
2. Locate and double-click the payroll item.
3. Review the information.
4. In the Default rate and limit window, verify the rate you've entered.
5. Click Finish.

You can also check set up a payroll item for more information.

I'm just around if you still need my help setting up the Simple IRA payroll item.

Yep.  It’s set up correctly.   Our percentage is 3%.  It calculates on salary and hourly compensation.  But it doesn’t calculate the 3% on bonuses or other commission type compensation.   For example if an employee salary is $1000 and he has another $1000 in bonus the simple company contribution is erroneously calculated as $30 instead of $60 ($2000 total compensation x 3% = $60). 

Thanks for providing us the in-depth details of your payroll issue, chrisc1.

I appreciate you for checking out the setup of the Bonus payroll item. Yes, you're right, if the employee has a $1000 bonus amount on their paycheck, the amount in the Company Summary for Bonus should be $30. Cases like this, we can run a Payroll Item Detail report. Then, check if there are prior paychecks that did not withhold the bonus amount in the Company Summary section.

Here's how:

1. Click Reports on the top menu.
2. Choose Employees & Payroll.
3. Hit Payroll Item Detail.
4. Manually enter the date for this current quarter in the Dates field.
5. Look for the Bonus company deduction and review if there are zero figure in the Amount column.

If there's a discrepancy in the amount for the last paycheck, we can manually adjust it. This way, the correct 3% of the bonus amount will be reflected in the Company Summary section. 

Here's how:

1. Click Employees on the top menu.
2. Choose Payroll Taxes and Liabilities.
3. Tick Adjust Payroll Liabilities.
4. Adjust the date period in the Date field.
5. Hit Company in the Adjustment for: section.
6. Select the bonus item in the Item Name column.
7. Enter the discrepancy amount in the Amount column.
8. Type the details in the Memo column on what the adjustment for.
9. Tap OK.

To learn more about adjusting payroll liabilities and payroll items calculating incorrectly on the paycheck, please refer to these articles:

• Adjust payroll liabilities in QuickBooks Desktop
• Payroll items on paycheck are not calculating or are calculating incorrectly

Keep me posted if you need a hand with running payroll transactions and reports or any QuickBooks related. I'm always here to help.

I think you misunderstood me.  Let’s talk about one paycheck.  An employee is set to earn $1000 in salary and $1000 in a bonus.   This employee has elected to participate in our Simple IRA plan and has chosen to assign 3% of his salary for his portion.  The company has a 3% match.   With this in mind, the company match portion should be calculated as $60.  Do you follow?   However, QuickBooks is calculating the company match portion as $30 on this paycheck.  If we remove the bonus to test and see what happens, the Ira amount remains at $30.  When we add back the $1000 bonus and remove the $1000 salary, quickbooks calculates the company match at $0.  

I've replicated your concern, Chrisc1. Both the Simple IRA and company match are calculating correctly. 

Let's pull up the Payroll Summary report. This will provide payroll totals that include taxes and contributions. We can manually calculate the wage base and the IRA company match rate. If the amount is more than it should be, QuickBooks has an auto-catch up feature. It will calculate less on the next paycheck. This way, the total deduction or contribution will be correct. This may be the reason why the company match is $0 amount.

Let's go ahead and check the report:

1. Click Reports.
2. Go to Employee & Payroll.
3. Select Payroll Summary. 

You can create a liability adjustment to correct the amounts. Or, leave it as it is since the program will auto-catch up with the amount. 

Although, if there's no discrepancy on the report, I'd suggest reaching out to our payroll support. This way, an agent can take a closer look of these payroll items. Here's how:

1. Click Help inside QuickBooks.
2. Go to QuickBooks Desktop Help.
3. Click Contact Us.
4. Enter "Simple IRA company match calculation is incorrect" in the description field, then click Continue.
5. Click Get a callback.

Or, you can get in touch with an agent through chat. Here's how:

1. Open this link. 
2. Select QuickBooks Desktop.
3. Click Start a message in the Basic, Enhanced or Standard Payroll or Assisted Payroll row. 

Feel free to reach out to us again if you have other payroll concerns. We'd be here to help you out. 

This is still a bug in QBO. We should be able to have the employee and employer have a 3% match on bonuses. What do we need to do to escalate this issue?

Thank you for joining this thread, DH3. I'll route you to the right support team who currently handles tax calculations. That way, the amounts are corrected before filing taxes.

I'll let you contact our QuickBooks Online Payroll Team so they recalculate the Simple IRA contributions. If they need to escalate this, a case will be created under your company and you'll receive updates via email.

Here's how to get in touch with them.

1. Sign in to your QuickBooks Online company.
2. Go to Help (?).
3. Select Contact Us.
4. Enter your concern, then select Let's talk.
5. Choose a way to connect with us:
   • Start a chat with a support expert.
   • Get a callback from the next available expert.

We've collected some of the most popular Tax questions with solutions to help you find the information you need a bit faster. If you're interested, just click this link to get some answers: Popular Tax questions with solutions.

Come back to this post if you have follow-up questions concerning payroll. I'll be here to help again. Happy new year!