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Payroll Liabilities

Late in April, I noticed I have what appears to be a transposition error between writing payroll checks and the liabilities section, causing me to change the check amounts. It occurs in Social Security and Medicare amounts. 

 

How can I fix, other than changing the liabilities check each week?

Thank you,

Donna

1 Comment
QuickBooks Team

Re: Payroll Liabilities

Hello there, Donna.

 

Let me help you fix your payroll liabilities calculation by updating the latest tax table version.

 

There are a few reasons why SS and Medicare taxes are calculating incorrectly. Consider the following:

 

To isolate the problem, let's make sure you're able to download the latest tax table update version 21909. Here's how:

 

  1. Go to the Employees menu.
  2. Select Get Payroll Updates.
  3. Hit the Payroll Update Info button.

But if you're using the correct version, let's check if there are any discrepancies for the SS and Medicare amounts on the employee's paycheck. We can use the Payroll Detail Review report to verify the taxes withheld and the difference.

 

  1. Go to the Reports menu.
  2. Select Employees & Payroll.
  3. Choose Payroll Detail Review.
  4. Click Customize Report.
  5. Select the Display tab and select the date range.
  6. In the Filters tab, select Payroll Item, then choose Multiple payroll items in the Payroll Item drop-down.
  7. Select Medicare Company, Medicare Employee, Social Security Company and Social Security Employee.
  8. Hit OK twice.

 

On the report, review if the checks have the correct deductions. You can get the correct calculation by multiplying the total wage base of each payroll items to its corresponding tax rate. If the figures are correct, then there is no action to be taken next.

 

However, if QuickBooks over withheld the SS and MD taxes, there are 2 ways to remedy the situation. Here's how:

 

  • Option 1: Apply the taxes to your next paycheck. QuickBooks has an automatic calculation feature for rate-based taxes deducting overpaid taxes to your next payroll run.
  • Option 2: You can offset the overpayment by creating a liability adjustment. Here's an article with the complete steps on how to create an adjustment: Adjust payroll liabilities.

Please feel free to let me know if there's anything you need help with. I'll be glad to work with you again.