FishingForAnswers
Level 10

Employees and payroll

Well, hm.

 

According to the IRS' website, the 2024 tax rate for Single people earning over $47,150 is 22%.

 

By my math, 22.88% is being withheld from that paycheck in Federal Withholding, which seems in line.

 

As far as I can tell, QuickBooks' approach to income tax calculation is fairly straightforward; they take the gross wages on the paycheck, multiply it by the number of expected pay periods (52 in your Weekly case), and project the yearly income that way.

 

Going by the pictures you provided, the projected yearly income for this person would be $82,477.20, if they earned this amount every week.

 

This is in excess of the $47,150.00 threshold for the 22% income tax rate the IRS listed for 2024, so in the context of the way they're calculating it, the federal income tax withholdings are in line with what would be expected for a Single person with no dependents.

 

That being said, I'm more concerned about the social security and medicare taxes you listed.

 

For W-2 employees, the social security tax held out of their paychecks should be 6.2% of their gross wages. That would normally be $98.34 for the picture you provided. Likewise, Medicare (normally) should be 1.45%, or $23.00 for the aforementioned picture. Your numbers are significantly higher than that.

 

Because of this, I am curious if you had issues earlier in the year with payroll taxes not being withheld from paychecks; that would cause the system to hold higher social security and medicare taxes, among others, in an attempt to correct the situation.