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!

Did this ever get resolved? I have the exact same issue.

Did this ever get resolved for you?  We are having the exact same problem and can't get anywhere with quickbooks help.

I appreciate you chiming in here in the thread, @Markh12. I want to ensure that your Simple IRA contribution calculates accurately inside QuickBooks Desktop (QBDT).

Adding a Simple IRA to an employee's profile is a crucial task. Thus, setting the correct amount and limit is important so the system can recognize it when you run payroll for your workers. You'll want to review the employee's profile and ensure they are on point.

Please know that the program processes payroll calculations based on the order of payroll items in an employee's profile. Thus, we need to enter the other pay types first item before the Simple IRA item as this can affect how the deduction is calculated from the gross income. Here’s how you can enter these items:

1. Go to the Employees menu.
2. From the Employee Center, click the name of the employee.
3. From the Edit Employee window, click Payroll Info.
4. Add the other pay type first first then the Simple IRA.
5. Click OK once done.

For visual reference, see the screenshot below. 

Once done, run the payroll to verify if the Simple IRA shows and if the calculation is on point. In case the issue persists, you can contact our Customer Care Team so they can help you navigate through this. See this page for more details: Get help with QuickBooks products and services.

On the other hand, I recommend checking this article to learn more about employee contribution limits: Set up or change a retirement plan.

I'll be on the lookout for any replies from you. By doing so, I can assist you effectively and ensure that the Simple IRA reflects accurate calculations. Take care.

All of my Simple IRA contributions calculate correctly. I need to calculate 3% company match for a one time bonus.

I have not found any answer.  Could someone help?

Did you receive an answer?

@spectrum1  Well, this thread certainly has been four years of nothing burger answers.

Off the top of my head, it sounds like either the Bonus or the IRA contribution items were not set up as the correct item type.

Can you provide information on how these two items were set up?

The IRA is set up as pre-tax.  We have done this for years with a 3% match, no issues.  The bonus is set up as compensation, no issues.  The problem is I'm maxing out an IRA, a bonus for the compensation then out to the IRA.  My problem is the SS and MED are taken out if I write the bonus back out to the IRA.

To accurately calculate the 3% company match for your one-time bonus, we'll need to set up a new payroll item in QuickBooks Desktop, @spectrum1. Let's work together to help you with your payroll processing.

Creating a new payroll item will ensure that the one-time bonus for your employee is processed with complete information, including the accurate application of the additional 3% company match calculation. Here's a step-by-step guide on how to set it up:

1. Open your QuickBooks company.
2. Go to Lists menu, then Payroll Item List.
3. Navigate to the Payroll Item dropdown, then choose New.
4. Tick the Custom Setup, then Next.
5. Choose between Deduction or Company Contribution, then Next.
6. Add the name of the deduction or company matching item. Once done, click Next.
7. In the Tax Tracking Type window, choose the specific contribution item. Click Next two times.
8. Under Calculate based on quantity, you can click Neither, then Next.
9. You can keep the Default rate and limit fields empty. At the same time, you can enter the rate and limit when adding the item to the employee profile.
10. Click Finish.

Here's a screenshot for your reference:

Once you have created the new payroll item, you can go ahead and add it to your employee's profile. Afterward, you can consider processing an unscheduled payroll or adding the bonuses to regular paychecks as an alternative method.

For more details, please see this article: Set up or change a retirement plan.

Additionally, if you're looking to review and gain insights from the data related to your payroll payments, I recommend exploring this article: Create a payroll summary report in QuickBooks.

The Community space is always available if you need more help on this matter. You can post a comment below, and we'll be sure to get back to you.

Thank you very much!