How do I make sure that federal withholding is being taken out of employee's paycheck tips correctly?

Thanks for coming by, @userdoug2.

I'll share some information on how QuickBooks calculates federal withholding. QuickBooks calculates the federal withholding based on the following.

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

Just make sure you've entered the correct W-4 information from the employee's profile. Form W-4 contains information about an employee’s salary, their dependents, and how many income tax withholding allowances they want to claim.

Below are the possible reasons why taxes are not calculated when processing payroll.

• They are not meeting the taxable wage base
• They were set to Do Not Withhold for federal and state income taxes in the employee setup.

See this guide for more information: 0. 00 or no income tax withheld from paycheck.

You can also use our paycheck calculator to verify the taxes: Paycheck calculator for hourly and salary employees.

Feel free to browse this link to help you manage payroll-related tasks. It contains topics with articles to guide you along: View all help for QuickBooks Online Payroll.

Still have questions? Drop them below and I'll be glad to answer them for you. Take care and have a great day ahead.

@userdoug2 

That's not unusual at all.  We have a lot of part-time employees and our most recent two pay periods had 19 of 40 employees with $0 federal withholding.  As long as there's FICA and Medicare being deducted, I wouldn't be concerned.