Payroll Rounding

Hello there, @missmissySEI. I'm here to share some information about payroll rounding in QuickBooks.

In QuickBooks, penny differences are usually caused by rounding in a paycheck or tax calculations. These depend on certain circumstances. Refer to the following:

• Net pay for a salaried employee- a few pennies change from paycheck to paycheck are due to rounding for taxes that are calculated at exact rates (like Social Security and Medicare). 
• Amounts on reports or forms - there are usually penny differences in the amounts on payroll reports and tax forms. But, tax agencies generally only care about amounts rounded to the dollar.
• Prior payrolls and tax payments - when you enter payrolls from earlier in the year that were processed by another service, this may have used slightly different calculations that cause small differences from what our system expects.
• Large differences- there are differences of more than 10 cents. They are generally not due to rounding in calculations. This may indicate a discrepancy or error. To avoid this, review your payroll and tax records.

For more information, visit this article: Why do I occasionally notice penny rounding differences?

I also include this helpful resource that you can use as a guide in running payroll reports in QuickBooks: Generate Excel-based payroll reports.

If you have other concerns about managing your employee timesheets, please don't hesitate to leave a reply below. I'm always here ready to lend a hand.

Thank you but this is not a tax problem. I figure the taxes not quickbooks. This is a difference in gross pay. Quickbooks breaks the jobs down and figures the pay by jobs instead of just a plain rate of 40 hours. Because of that it rounds differently causing a 3 cent difference on the gross. 

Hello, missmissySEI. 

When it comes to rounding methods in QuickBooks, there are typically two options to choose from. One is to calculate tax amounts based on the net price, while the other is to calculate based on the paycheck, which includes Social Security and Medicare. Regardless of which method you choose, QuickBooks will always round the tax amount to the nearest cent for accuracy.

If you're experiencing the same issue, your company file may have suffered some data damage. To assist you in identifying and resolving this issue, we suggest running our Verify Rebuild Data tool. However, before we proceed, it's essential to ensure your QuickBooks Desktop is up-to-date. This will ensure you always have access to the latest features and fixes available.

To verify the data: 

1. On the top menu, click File and select Utilities.
2. Click on Verify Data.
3. Select OK when QuickBooks doesn't detect any problem with your data.
4. If Verify finds an issue with your data, you'll be prompted to Rebuild Now or View Errors.
5. Click Close or View Errors and take note of the specific error message.

Next, here's how to rebuild data: 

1. On the top menu, click File and choose Utilities.
2. Click OK if you receive a prompt to back up your company file.
3. Select OK when the rebuild is complete.
4. You can rerun the Rebuild Data to ensure there's no error.

You can visit this detailed article for additional information: Verify and Rebuild Data in QuickBooks Desktop. 

If there is anything else you would like to inquire about payroll rounding matters, please don't hesitate to let me know. I'll be around to assist you. Have a great day!

I guess I am not explaining my problem very well.  This has NOTHING to do with taxes.  I enter my employees time under employees; time sheet.  I select the job they worked at and the number of hours they worked per day.  Sometimes they work at the same job but on different days, for a total of 40 hours.  So, I calculate payroll at 40 hours at $20/hour = $800.00 gross pay.  But when I go to paycheck detail the gross it has figured is $800.03. It looks like Quickbooks totals each job for example they worked at this location Monday & Wednesday, so it totals that job, then maybe a job on Thursday & Friday and totals that job.  Therefore, it rounds the totals per job which leaves my gross pay off by .03.  

Yes, this is how it works.

Each line item on the paycheck earnings table is calculated by multiplying the pay rate by  the time worked, where the time is to the minute, and then rounded to the nearest cent. (This is actually the case for every line item on every type of transaction in QuickBooks, because in an accounting system all G/L rows use dollars and cents - no fractions of cents.)

So, depending on how you break up the time, you each line item might round up by a fraction of a cent, or each line item might round down, or there might be a mix.

In your case, after the rounding, up it seems, you're ending up with an extra three cents. This is normal.

If you really, really must override the rounding, you can add an addition or deduction line item set up as with the tracking type "Compensation" for the .03 cents. However, the employee will see this on their check stub and IMO you will run the risk of seeming cheap. The typical practice is to just let it ride.