Payroll deduction not calculated correctly

We've also had this issue and were told it is a known problem and the engineers are working on it. (INV-31599)  However, it still has not been resolved.  This had always been calculating correctly in the past several years that we have been using QuickBooks Payroll, something must have recently changed on their end and now it is not calculating correctly.  We have been told we will receive an email when this issue has been fixed, but that was over 2 months ago:(

Hello @AttComm,

I know how challenging this is for you. Currently, we have an on-going issue where users like you have an incorrect calculation of your payroll deductions.

Rest assured that this issue has been escalated to our engineering team and they're in all hands working to fix this as soon as possible.

In the meantime, you have the option to use the amount method for your employee's deduction. Let me show you how:

1. Go to Workers.
2. Select Employees.
3. Find and click to open your employee profile.
4. Hit Edit employee.
5. Scroll down the page to section 5 of your employee's pay.
6. Select the Pencil icon of your employee deduction.
7. Choose $ amount and enter the amount of your employee deductions.
8. Hit OK.
9. Click Done.

If you haven't yet, I'd still recommend contacting our Payroll Care Team so you'll be added to the new list of affected users.

In case you need some tips and related articles for future use, you can always visit our QuickBooks Online Payroll Help Articles page for reference.

We appreciate you patiently waiting as we fixed this for you so you can get back to business in no time. Please let me know if you have any other concerns.

This appears to still be an ongoing issue. Our latest payroll, for this Friday, is still not correctly calculating the Simple IRA deductions for employees set to deduct as a % of gross.

Hi, Phenym.

I appreciate you looping in this thread. Let me provide some updates and a workaround regarding this payroll issue.

For now, the most recent update that I have is that our Payroll Team is working closely to resolve this issue. We are still investigating this unexpected behavior.

I don't have a specific time frame as to when and how this will be meditated upon, rest assured are looking into it. However, as more information becomes available, I'll be sure to let you know the root.

As a workaround, you have to manually calculate and enter the IRA amounts every payroll run and for every impacted employee to have an accurate payroll deduction.

Also, I'd suggest getting in touch with our Payroll Specialists to have this re-investigated. Unlike in this public forum, they have the tools required to perform any escalations in the system whenever necessary on your behalf.

1. Sign in to your QuickBooks Online Company.
2. Click (?) Help at the upper right corner.
3. Select Contact US on the pop-up.
4. Enter a brief description of your concern then hit Continue.
5. Click Get a callback.
6. Enter your contact information.
7. Select Call me.

Here are additional references that might be helpful for future use:

• Retirement plan deductions/contributions.
• Set up retirement deductions and contributions.

I'll keep an eye of this issue and will let you know whenever an update is available. Please extend your patience while we're working for the permanent fix.

We have been asking to have this issue resolved for months now (INV-33621) and keep getting the same answer--"Rest assured that this issue has been escalated to our engineering team and they're in all hands working to fix this as soon as possible."  I can't believe it is taking your engineering team this long to resolve a simple calculation issue.  Perhaps you need some new engineers as this problem is still ongoing!

Thanks for getting back to this thread, AttComm.

I checked the investigation number (INV-33621) you've shared and found out that it was already tagged as closed and resolved. If you're still having the same issue, I highly recommend contacting our Phone Support team again to have this re-opened for further investigation.

Here's how to reach them:

1. In your QBO account, click the Help (question mark) icon at the top right.
2. Select Contact Us at the bottom to connect with our live support.

I'm also sharing these articles for future reference:

• Retirement plan deductions/contributions.
• Set up retirement deductions and contributions.

I want to make sure everything is taken care of for you, so please let me know if you have any other issues or concerns. I'll be here to help. Have a good one!

How can this issue be resolved and closed when the problem still persists?  Also, I never received an email that the issue was resolved like I was supposed to.  I've called and entered info online, but the issue has never been resolved!!!

I appreciate the details you shared and for getting back to us, @AttComm.

I also understand how you feel when something isn't working the way you need it. But I'd still recommend contacting our Payroll Care Support by following the steps above.

They have the tools need to pull up into your payroll account, securely. From there, someone will help you with the correct calculation of deductions for your employees' payroll.

In the meantime and if you haven't yet, you can consider using the Amount method for your employees' deduction. Then, manually calculate the deductions for your employees' payroll. You can do so by selecting $ amount under your Employee deduction menu.

Know that you can always visit our Help Articles page for QuickBooks Online Payroll in case you need some reference for your future payroll tasks.

Please let me know in the comment section down below if you have any other concerns. It'll be my pleasure to help and I'm always around ready to help.

I debated about doing the amount fix but it will still be the same amount of work of going in and fixing the percentage amounts to fixing the fixed amounts for the employees who are on hourly (different each week) pay. So leaving things alone and hoping you all fix it soon.

It's hilarious that QBO is upping their monthly subscription cost but can't seem to fix the simplest of things. Seems pretty greedy to me.

I hear you, @jasminr89.

Please know that this is not a kind of customer experience we want you to experience. You've got me here to help you get this sorted out. 

Top of that, the price increase for the QuickBooks Online subscription help us reinvest in improving the features and introducing new tools to do more in less time. Also, you can access more than 650 apps so you can increase its capabilities.

Since this issue was already closed by our engineers, I'd suggest contacting our QuickBooks Support team so they can provide further assistance with this issue.

Here's how to reach them:

1. Click the Help icon in the upper right of the screen.
2. Select Contact US on the pop-up. 
3. Enter what you're needing assistance with in the What can we help with? field and choose Let's talk. 
4. Click Get a callback.
5. Enter your contact information.
6. Select Call me.​

Please check out this article for more reference about frequently asked questions about the QuickBooks Online price increase: FAQ: QuickBooks Online price increase for July 2019.

Get back to us if you have any questions and concerns. We're always here to help. 

I can also tell you that this issue is not fixed. I experienced this again this week when running payroll.

The last time I called and spoke with the team at quickbooks they told me that it was a change by the IRS. I asked if they could point me to a IRS reference for the change and they could not.

SIMPLE IRA deductions in quickbooks payroll are NOT calculating properly and this has been an ongoing issue. I wonder why I am using quickbooks payroll for 'accuracy' when this is not done properly.

Running the numbers manually every payroll defeats the purpose of having the service.

I can also tell you that this issue is not fixed. I experienced this again this week when running payroll.

The last time I called and spoke with the team at quickbooks they told me that it was a change by the IRS. I asked if they could point me to a IRS reference for the change and they could not.

SIMPLE IRA deductions in quickbooks payroll are NOT calculating properly and this has been an ongoing issue. I wonder why I am using quickbooks payroll for 'accuracy' when this is not done properly.

Running the numbers manually every payroll defeats the purpose of having the service.

I removed that last comment text as I shouldn't be snide. I am glad to see this is in fact an ON GOING ISSUE with someone other than myself. 

QuickBooks - You can't just close cases to make them go away, you actually need to find resolutions, please, pretty please!?!?

I appreciate your patience and understanding, @jasminr89.

Before the engineers close open investigations, they need to perform tests to ensure the fix is permanent. In case the problem reappears, it's always recommended to perform basic troubleshooting solutions to refresh the system. If this doesn't work at all, they'll reopen the case, or create a separate ticket to escalate the issue. 

Your feedback is important to us. That being said, reviews such as this can make a difference if shared with our support team. 

I'm backing up my colleague's suggestion to contact them again. They have the tools capable of pulling up your account in a secure environment, which we are unable to do so here in the Community for security reasons. 

From there, have our representative send an escalation to the technical team to look for the root cause of the payroll deduction miscalculation. Please follow the steps above to reach our Customer Care Team.

Please know that I'm always here to help if you need anything else. Take care and have a good one!

I'm having this problem too.  SIMPLE IRA deductions and contributions are NOT calculating on the gross amount, but instead based on the "gross - pretax deductions" amount.  Despite using the "calculate on gross" drop down selection.  Strange behavior. 

I agree with other users that calculating this manually defeats the purpose of paying for software to do it.

Has this issue been solved?

@Phenym  @jasminr89  @WDH  @ShallyMarR  @KhimG 

Hello @S-Corp,

Thank you for joining us here in the Community space. Allow me to step in and provide some clarification about adding Simple IRA in QuickBooks Online.

The investigations mentioned above are no longer active and have already been closed. The way system is calculating the deduction for employees is working as designed.

On the IRS website, you can see under Section 125 that plans should not be included in the calculation of Simple IRA. I recommend checking out their site for more information about it: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-simple-ira-plans.

Also, we have different types of retirement plans supported in QuickBooks. I've attached an article you can visit for more information about these plans, as well as how to modify the deduction or contribution item: Set up a retirement plan.

Don't hesitate to click the Reply button below for any concerns about setting up the deduction. The Community and I will keep an eye on your response. Take care.

Has this been fixed yet? Same problem with Simple IRA for our entire company. They are taking 2% of adjusted gross income instead of 2% gross income. This is so frustrating. I'm having to manually calculate everyone's deductions/contributions. The little button even says % of gross. When I talk to anyone at quickbooks, they just want to change a check amount and not fix the actual problem. No one understands what I'm telling them and I feel like I'm going crazy... well now I feel more sane that others seem to have to same problem. Seems like programming can just go in a fix this! Why are we paying for software when we have to hand calculate everything and can't trust the actual software.

Hi there, @billing76.

I recognize your frustration regarding the calculation of Simple IRA. Don't worry. I want to make sure this deduction gets checked so you can get back to working order.

Before we proceed, have you added Simple IRA to salaried employees? If yes, the calculation of the Simple IRA is working as designed.

However, if this deduction was added to hourly employees, I recommend reaching out to our QuickBooks Payroll Team again. This way, they can further check on this matter and open a new investigation regarding the issue.

You may also want to know how QuickBooks calculates payroll taxes. This article will help you understand it: Understand how your payroll taxes are calculated.

Come back to this post if you have other concerns or follow-up questions about the calculation. We're always here to help.

If it's working as designed, it wasn't designed correctly... I reached out to our retirement sponsors and our CPA. The 2% company contribution should be calculated on gross salary (Quickbooks' pull down is even labeled as % of gross) and NOT adjusted gross salary. Is there any publication that you can provide that says it should be calculated based on adjusted gross salary instead? I read through the IRS publication above and it didn't have that in there. If anything, the samples in the publication showed them calculating it based on gross salary. I really wish this could be looked at and changed so I can use this functionality. Until then, I'll have to hand calculate myself. Also, I trust quickbooks has a group of legit professionals that review rules, laws and such that keep customers in compliance. Now I'm worried that it's not the case.