Simple IRA Calculations

Hi there, @JennyCPS.

Let me make it up to you by making sure your record is accurate.

To ensure the information in your company file is correct, I'd recommend checking how you set up the simple IRA. Here's how:

1. Go to Payroll, then Employees, and select your employee.
2. From Deductions & contributions, select Start or Edit.
3. Select + Add deduction/contribution.
4. Select Retirement Plans in the Deduction/contribution type▼dropdown.
5. For Type, select the applicable retirement plan.
   • If you need to track a company-only contribution with no employee match, choose Company-only plan.
6. Enter the name of the provider or plan in Description (appears on paycheck).
7. Complete the remaining fields.
8. If you have a company match, under Company contribution, select the dropdown menu to choose how you want to calculate the amount.  Complete the new fields to enter the amount or percent per paycheck and annual maximum.
9. Select Save then Done.

You can check this article for guidance: Set up or change a retirement plan.

If you have more concerns about managing your payroll or banking, don't hesitate to click the reply button. I'm always around to help!

Everything is set up correctly. I've had 2 different QB team members look at it for me. The first one said they were escalating it to a tier 3 support and I'd receive a call back. That was over 2 weeks ago and nobody ever called back. The 2nd one I was in a chat with for 4 hours this week. He thought it was set up incorrectly so he set up his own on the back end. I ran a test payroll with him on screenshare to see if it fixed it. It was still calculating it the same way incorrectly and when I showed him that through the screenshare, he disconnected the chat and left the screenshare. After a 4 hour chat with no resolution. It's set up correctly. It's just not calculating correctly. 

Thanks for checking back with us, @JennyCPS. 

Please know that I've taken note of your last interaction with our support team and will report it accordingly. 

For this concern, you'll need to speak with our Payroll Support. Here in the QuickBooks Community we do not obtain the same tools that our live agents have.  Our Support Team can securely review your account and screenshare when necessary to determine if this issue will need to be reported to our Engineering Team for investigation.

Since your chat interactions haven't been the best, I recommend scheduling a call back from an agent. Here's how:

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

If there is anything else I can assist you with, please don't hesitate to let me know. Take care!

I'm having the same problem!

Two calls to QBO support, and still no resolution.  This seems like a simple and obvious flaw that they should be able to fix. "Gross pay" means Gross pay.... not after any other pre-tax deductions!

I'll share details about this and help you fix the inaccurate calculation, @swingside.

In QuickBooks Payroll, the percentage-based Simple IRAs are calculated on the gross wages minus any pre-tax deduction. Since your having issues regarding the calculation of this payroll item in your account, I recommend checking the setup of this plan to ensure it is added correct. For reference, check out this article: Set up or change a retirement plan.

However, if verified that everything is correct, I highly suggest getting in touch again to our phone support team to further determine the root cause of the problem. I know that you've already contacted them, but please know that they have the specific tools to check your account and perform necessary adjustment if needed. They also have the direct connection with higher support to help resolve it for you. 

Additionally, you can run several payroll reports to easily track your employee details, business finances, and payroll taxes. 

I'm just around the corner to provide additional assistance if you have any other concerns about the calculation of your retirement plans. Have a good one and stay safe. 

What you're stating is that QB Online payroll is set up to do it that way (off gross pay AFTER other pre-tax deductions come out) but that's just simply not the right way to calculate it.  I've even confirmed this with our Edward Jones account facilitator that this is the incorrect way to do it.  Like @swingside stated, gross pay is gross pay, not gross pay after other deductions come out.  Furthermore, we were using QB desktop payroll before making the switch to online at the beginning of the year and it calculates it correctly (off actual gross pay, not gross pay after taking out other deductions) so why can't QB online payroll calculate it correctly?  The way you're calculating it goes against the federal mandate for how these percentages are supposed to be calculated and it shorting the employees on both their own contributions and the company matching contributions as well.  I am just manually changing it for every employee on every check but it's ridiculous that I have to do that.  

Furthermore, I've had more calls/chats with QB employees over this problem (and others) than I can count, each one lasting 2+ hours.  Every employee gives me a different answer and nobody seems to know what they're talking about.  I get hung up on, I get disconnected from chats, and I get told "I just don't know, sorry".  I've been told multiple times that my case is being escalated and that someone higher up will get back to me, and then nobody ever does (this was months ago and still waiting to hear back).  It's a joke at this point.  I don't have the time to waste on more hours long calls with you guys just to keep my fingers crossed that I get someone who actually knows what they're talking about (which never happens).

It's absolutely ridiculous, and it's ridiculous that they are just trying to say that's the way it should be.  Even QB desktop payroll gets it correct, so why can't online payroll?  So frustrating!

Exact same issue here.  Any solutions yet??

I can imagine the hurdle you've been through finding a resolution to your concern about the inaccurate calculations of simple IRA in QuickBooks Online (QBO) Payroll, @OGRTharris.

I’ll ensure you get routed to the right direction of support to help you with this issue.

Since you're having the same problem regarding the calculations, I recommend getting in touch with our Payroll Support team. One of our representatives can have a screen-sharing session with you and dive into your account securely to verify the root cause of this matter. This way, they'll know the necessary adjustments and guide you on a possible fix.

Here's how to contact them:

1. Select Contact Us from the Help (?) section. 
2. From there, please enter your question and click Let's Talk.
3. Review and choose from the following: Have us call you, or Chat with us.

Furthermore, I've added this resource that might be useful if you want to pull up payroll reports in QBO to help you track your employees and payroll transactions: Run payroll reports in QuickBooks Online Payroll. The same resources give you details on how to customize, print, and mark a report as a favorite.

If there is anything else I can do to assist you with QuickBooks, particularly payroll calculations, you can reach out to the Community at any time. I'll be standing by for your response. Stay safe always.

After some deep searching, I finally found something on the IRS website that sounds like that's actually the correct way for it to be calculated, even though it doesn't make any sense.  My accountant agreed that it appears to be the case, even though it doesn't seem right.  QB help was very much less than helpful in navigating this confusing situation, and QB desktop has always calculated it based on true gross wages while QBO does it on gross after taking out other pre-tax deductions, so it's even more confusing that they're not consistent across their own platforms.  

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-simple-ira-plans#compensation