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VLCS Sharon
Level 1

payroll federal and state withholding

We recently changed from an outsource payroll company, Paychex, to doing inhouse payroll in QB's.  From the last paycheck processed by Paychex to the first paycheck in QB's, the Federal and State withholding is different.  I am on the most current payroll update tax table version 22204.  Our employees are asking why the difference.  

3 Comments 3
Archie_B
QuickBooks Team

payroll federal and state withholding

Welcome to the Community, VLCS Sharon.

 

I'd like to share some information about how QuickBooks Desktop Payroll calculation works.

 

QuickBooks Desktop Payroll calculates payroll taxes based on tax table updates throughout the year. All tax table releases are based from federal and state changes on tax calculations and forms.

 

Here are some articles for more information:

 

 

I've also added this resource to make sure your paychecks are compliant: Update your State Unemployment Insurance (SUI) rate in QuickBooks or Intuit Payroll.

 

You can leave a comment below for follow up questions about payroll updates. I'll be around if you need me. Have a wonderful day!

VLCS Sharon
Level 1

payroll federal and state withholding

Thank you for your reply.  We are current on our updates and show the most current update.  We used Paychex before and now using QB's.  There is a difference of the Federal and State withholding tax with a difference of $50 or greater on Federal and about $25 or more on State.  Why would this be such a big difference?

SarahannC
Moderator

payroll federal and state withholding

Thanks for getting back to us, @VLCS Sharon.

 

I'd like to provide additional information about the Federal and State withholding tax.

 

QuickBooks relies on the payroll information you've set up in the employee's profile. This includes that filing status, pay frequency, allowances, and taxable amount.

 

Let's review the employee's information within your company file to verify if they have the same information entered or used in the Federal and State withholding. You can follow the steps below.

 

  1. Go to the Employees menu.
  2. Select Employee Center. Then, double click the employee's name.
  3. Go to the Payroll Info tab. Click Taxes.
  4. Review the Federal and State information.
  5. Make any changes (if necessary).
  6. Click OK to reflect the changes.

 

Once you correct the setup, the state tax rates will not tend to be greater than federal tax rates.

 

I've collected some article for additional information and tips about QuickBooks Desktop Payroll:

 

 

We're always here if you have other concerns soon or follow-questions with this matter. Take care and stay safe, VLCS Sharon.

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