Why doesn't quickbooks calculate After Tax Roth 401k employee contributions? I have to manually subtract taxes from gross pay & multiply by the % the employee withholds

That doesn’t answer my question. For example, when QuickBooks takes out an employees elective deferral for their 401k, it does it correct. It takes 4% from the gross pay. However with a different employee who has an elective deferral for their Roth 401k, QuickBooks also takes 4% from the gross. So the amounts are the same for both employees. Does this example make sense? QuickBooks isn’t taking out the taxes for the Roth 401k employee

That doesn’t answer my question. For example if one employee defers 4% to their 401k, QuickBooks takes out of gross pay. However if a different employee takes defers 4% to their ROTH 401k, QuickBooks also takes 4% from gross pay. So the deferrals are the same. This isn’t right

I am having this issue as well.  QB is calculating Roth 401K contributions on gross pay rather than net.  When setting up the payroll item, I did not change any of the default settings in QB.  We've had one payroll cycle now that has a couple of employees with incorrect contributions

Hello, cathy86. 

I'll take it from here and clarify the reason why the Roth 401(k) shows up under Deductions from gross pay. 

To clarify, the Gross vs Net page on the payroll item setup screen points to how QuickBooks would deduct the amount from the paycheck. 

Its possible that you've selected Gross, the calculated amount (or percentage) is deducted from the employee's gross pay. This is the reason why the Roth 401(k) item shows up under "Deductions from gross pay". 

And if you need to have the amount deducted from the net pay, then we'll want to switch to Net for Gross vs Net on the Roth 401(k)'s payroll item setup page. 

If you need some reference on setting up Roth-related plans, we can take a look at this article: Set up Roth 401(k) and Roth 403(b), and Roth 457(b) plans. 

Also, here's the link for the detailed steps on how to run payroll-related reports: Run payroll reports in QuickBooks Online.

You can always post your reply here if you have any other concerns regarding payroll. Let me know, and I'll help you out. 

When I choose the net option for my 401K roth, it calculates the 4% contribution off of net pay instead of gross pay. I understand that it is DEDUCTED from net, but I thought it was CALCULATED from gross??

Hi loridarlin870,

Yes, you're correct. The retirement plan contribution is calculated based on the employee's gross pay. Let's double-check some data to isolate why the system deducted it from the Net Pay.

Let's make sure to select % of gross pay on the employee's payroll information. Here's how:

1. From the Payroll tab, select Employees.
2. Select the employee's name.
3. Click the edit (pencil) icon on the Pay section.
4. Hit the edit icon on the retirement plan item under Does [employee name] have any deductions?
5. Under Employee deduction or Company-paid contribution, select  % of gross pay.
6. Click OK.

To have a closer look at your business' finances, you can run some payroll reports. Feel free to browse this link that has lists of payroll reports: List of payroll reports.

You can always get back to this thread if you need help running reports.

Selecting Net Pay vs. Gross Pay for a Roth after-tax calculation is not the solution.  This only works if the employee has no other deductions (i.e. a standard pre-tax 401(k), child support, or other deductions.  If there are any other deducitons, the net pay is not the same as "after tax."