QuickBooks Team

Employees and payroll

You'll have to make sure that federal tax withholdings will be taken out once you run payroll, userkim-spellman.


The first thing that you have to do is to ensure that the employee's profile is set up correctly. Also, QuickBooks Online (QBO) calculates the federal withholding based on these factors:

  • Taxable wages
  • Number of allowance/dependents
  • Pay frequency
  • Filing status

You can check your employee's profile by following the steps below:

  1. Go to the Workers menu.
  2. Select Employees.
  3. Locate and click the name of the employee.
  4. Click the Pencil icon beside Pay.
  5. Verify each section from Personal info to How do you want to pay [employee] carefully. Please make sure to check the What are [employee] withholdings? section where Tax exemptions field can be found and your employee's W-4 information.
  6. Click Done.
  7. Click the Profile tab, then make necessary updates.
  8. Select the Employment tab, then correct any needed information.
  9. Click Done.

Since you already run your first payroll, you'll have to delete their paycheck in the Paycheck List window. Then, recreate them to reflect the changes. 


You'll want to view a report that provides employees total in QuickBooks Online. Please check out this article for future reference: Create A Payroll Summary Report.


Keep in touch if you still have questions about federal tax withholding deduction. I'll just be a few steps away if you need me. Have a nice day!