Troubleshoot paychecks calculating incorrectly

Once you identify which tax or payroll items are calculated incorrectly, follow the steps below to resolve them.

Income Tax

QuickBooks calculates withholding taxes based on the employee’s federal or state withholding tax info. Check if the info is set up correctly. 

1. Go to Payroll, then Employees. 
2. Select your employee.
3. From Tax withholdings, select Start or Edit.
4. Review the federal and state withholding, then update it as needed.
5. Select Save.

If the employee is not exempt from withholding taxes but the income tax on paychecks is $0, this might be because the employee’s wage didn’t meet the minimum threshold. If needed, your customer can check the federal or state withholding tax tables.

SUI Tax

Verify if you have the correct SUI rates. If the SUI rate is correct but the amount is showing $0, checkout Troubleshoot no unemployment tax withheld from a paycheck to learn more.

Deductions or contributions payroll items

1. Run a tax and wage summary report. 
2. Verify if the deductions or contributions payroll items have reached the limit you’ve set.
   1. If the limit has been reached, the deductions will stop.
   2. If they haven’t and the calculation is still off, check if the payroll items are set up correctly, then contact us for help to fix the paychecks.

Incorrect Year-to-date (YTD) amount

If you've missed a payroll from the previous pay date and you've decided to create it after submitting the payroll for the current pay date, you’ll notice that the YTD amounts on the previous payroll are larger than the payroll for the current pay date.

This doesn’t mean that the YTD amount is incorrect. The current YTD amounts will show up on the most recent paycheck created, not on the most recent pay date.

QuickBooks can’t correct the YTD amounts on a paycheck. Instead, you can run a payroll details report to check the employee’s correct YTD amounts.

Once you’ve figured out the tax or payroll item that isn’t calculated correctly, see if it’s affecting all employees or just one. 

Income Tax

• If it happens to all employees
  1. Install the latest QuickBooks and payroll updates.
  2. Revert the paychecks.
  3. Recreate the paychecks. 
• If it happens to one employee
  1. Review your employee’s profile and make sure it is set up correctly.
  2. Go to Employees, then Employee Center.
  3. Select the name of the employee. 
  4. Select Payroll Info, then Taxes.
  5. On the Federal tab, in the W-4 Form ▼ dropdown, select the applicable form.
  6. Enter the employee's W-4 info.  If they claim exempt on their W-4, in the Filing Status dropdown▼, select Exempt. 
  7. Select OK to save.

SUI Tax

• If it happens to all employees
  1. Check if the SUI rate is correct and update as needed.
  2. Recreate the paychecks. 
• If it happens to one employee
  1. On the employee’s paycheck detail, verify the Year-to-date amount if it has reached the wage base limit.
  2. If it hasn’t, and the SUI amount is incorrect or showing $0, check out Troubleshoot no unemployment tax withheld from a paycheck.

Deductions or contributions payroll items

1. Run a tax and wage summary report. 
2. Verify if the deductions or contributions payroll items have reached the limit you’ve set. If they haven’t and the calculation is still off, check if the payroll items are set up correctly. 
3. Make sure the correct Tax Tracking Type and taxability applicable for the item is selected.

Note: You can set up pre-tax or after-tax deduction items. If you aren’t sure how the deduction is taxed, talk to your accountant.

4. If they’re not set up correctly, check out Fix a payroll item with incorrect tax tracking type.

If you use Assisted Payroll and your payroll items were set up incorrectly, contact us for help to fix the paychecks.