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M
McMillanClerk
August 7, 2022
Question

FICA calculating incorrectly and not using current hours worked

  • August 7, 2022
  • 2 replies
  • 0 views

 This employee normally receives a monthly salary, but this special occasion is hourly and paid biweekly. The employee was most recently paid a monthly salary in July. I'm trying to pay the employee $20 per hour for 5:42 hours of work, however, it is calculating $139.55 for Social Security tax and $32.64 for Medicare. It won't let me issue the paycheck because the deductions are greater than the net pay. 

 

I have edited the employee file in the "payroll info" section to reflect they are now on a biweekly payroll schedule (rather than the normal monthly) and I've also changed the earnings area to reflect the $20 hourly rate, but I'm still getting the incorrect FICA withholding. 

2 replies

M
Maybelle_S
August 7, 2022

Hello there, @McMillanClerk.

 

Downloading the latest tax table is a good start when it comes to fixing payroll-related issues in QuickBooks Desktop.

 

However, if the problem persists, we can perform the basic troubleshooting steps to fix this by verifying and rebuilding your data. See the outlined steps below:

 

To Verify the Data:

 

  1. Click Window at the top of the menu bar, then Close All.
  2. From the File menu, choose Utilities.
  3. Tap "Verify Data."

 

To Rebuild Data:

 

  1. Click Window at the top menu bar, then Close All.
  2. From the File menu, choose Utilities.
  3. Hit "Rebuild Data."
  4. You will receive a warning message to backup your company file, press OK.
  5. Click OK when you get the message "Rebuild has completed."

 

In case you need help with adjusting your payroll balances, you can go through this article for the detailed steps: Adjust payroll liabilities in QuickBooks Desktop.

 

Feel free to post again if you have other concerns about QuickBooks. I'll be more than happy to help. Have a good one.

BigRedConsulting
BigRedConsulting
August 9, 2022

First, note that straight percentage taxes like Social Security and Medicare do not use the pay period in their calculations. Most taxes don't.

 

If percentage taxes seem too high or low based on their normal rate, it usually means that on a YTD basis they are "out of balance", meaning that somehow the total tax on prior paychecks this year is too high or too low compared to the total of taxable wages for that tax. This is especially true when the tax seems too high. It can also be the cause of cases where they seem too low or are 0.00, but tax limits can also cause that.

 

To check to see if the tax is out of balance, use the Payroll Detail Review report.  It shows you, per employee and per tax, the taxed wages and tax amount per paycheck, whether or not someone overrode the tax, the tax amount QuickBooks thinks is accurate, and the difference.

 

Use the report and focus on the problem employee and problem tax and you'll probably be able to see why the tax amount is too high.

M
McMillanClerkAuthor
August 13, 2022

BigRed! Thanks for your reply! You have identified my problem, however, I'm not sure how to resolve it. This 7/12/22 payroll was issued prior to me starting. It looks like maybe the person that ran this payroll mistakenly hit a button to not withhold any taxes (see yellow highlight)?

 

Oh man, you don't know how happy I am that you responded. I am COMPLETELY unfamiliar with QuickBooks and I feel like I'm trying to walk through a maze with no lights on! I'm an accountant by trade, but have never used QuickBooks. 

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