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chrisc1
February 22, 2020
Question

My Simple IRA Company contributions are not calculating correctly. Seems to work fine for salary, hourly wages, but not on bonuses and other types of compensation. Help!

  • February 22, 2020
  • 4 replies
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Original commenter did not share additional details

4 replies

Adrian_A
Adrian_A
February 22, 2020

Let's make sure that we've set up the IRA contribution correctly, chrisc1.

 

We'll need to check and see if we've entered the correct rate and details. Here's how to verify the payroll information:

 

  1. From the Lists menu, select Payroll Item List.
  2. Locate and double-click the payroll item.
  3. Review the information.
  4. In the Default rate and limit window, verify the rate you've entered.
  5. Click Finish.

 

You can also check set up a payroll item for more information.

 

I'm just around if you still need my help setting up the Simple IRA payroll item.

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chrisc1Author
February 22, 2020

Yep.  It’s set up correctly.   Our percentage is 3%.  It calculates on salary and hourly compensation.  But it doesn’t calculate the 3% on bonuses or other commission type compensation.   For example if an employee salary is $1000 and he has another $1000 in bonus the simple company contribution is erroneously calculated as $30 instead of $60 ($2000 total compensation x 3% = $60). 

R
RCV
February 22, 2020

Thanks for providing us the in-depth details of your payroll issue, chrisc1.

 

I appreciate you for checking out the setup of the Bonus payroll item. Yes, you're right, if the employee has a $1000 bonus amount on their paycheck, the amount in the Company Summary for Bonus should be $30. Cases like this, we can run a Payroll Item Detail report. Then, check if there are prior paychecks that did not withhold the bonus amount in the Company Summary section.

 

 

Here's how:

 

  1. Click Reports on the top menu.
  2. Choose Employees & Payroll.
  3. Hit Payroll Item Detail.
  4. Manually enter the date for this current quarter in the Dates field.
  5. Look for the Bonus company deduction and review if there are zero figure in the Amount column.

If there's a discrepancy in the amount for the last paycheck, we can manually adjust it. This way, the correct 3% of the bonus amount will be reflected in the Company Summary section. 

 

Here's how:

 

  1. Click Employees on the top menu.
  2. Choose Payroll Taxes and Liabilities.
  3. Tick Adjust Payroll Liabilities.
  4. Adjust the date period in the Date field.
  5. Hit Company in the Adjustment for: section.
  6. Select the bonus item in the Item Name column.
  7. Enter the discrepancy amount in the Amount column.
  8. Type the details in the Memo column on what the adjustment for.
  9. Tap OK.

To learn more about adjusting payroll liabilities and payroll items calculating incorrectly on the paycheck, please refer to these articles:

 

Keep me posted if you need a hand with running payroll transactions and reports or any QuickBooks related. I'm always here to help.

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spectrum1
December 17, 2024

All of my Simple IRA contributions calculate correctly. I need to calculate 3% company match for a one time bonus.

I have not found any answer.  Could someone help?

FishingForAnswers
FishingForAnswers
December 17, 2024

@spectrum1  Well, this thread certainly has been four years of nothing burger answers.

 

Off the top of my head, it sounds like either the Bonus or the IRA contribution items were not set up as the correct item type.

 

Can you provide information on how these two items were set up?

S
spectrum1
December 17, 2024

The IRA is set up as pre-tax.  We have done this for years with a 3% match, no issues.  The bonus is set up as compensation, no issues.  The problem is I'm maxing out an IRA, a bonus for the compensation then out to the IRA.  My problem is the SS and MED are taken out if I write the bonus back out to the IRA.

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Gsnook746
January 15, 2025

We have been fighting this issue with Quickbooks Online Payroll for years now. Why can't the software be corrected so it works and we the consumer using the program doesn't need to continuously correct the payroll deduction amount and the contribution amount based on the employees parameters. It only works on hours and salary amounts. If there is any other pay code added, we have to manually figure and edit the payroll ourselves.

 

G
Gsnook746
January 15, 2025

We have been fighting this issue with Quickbooks Online Payroll for years now. Why can't the software be corrected so it works and we the consumer using the program doesn't need to continuously correct the payroll deduction amount and the contribution amount based on the employees parameters. It only works on hours and salary amounts. If there is any other pay code added, we have to manually figure and edit the payroll ourselves.

 

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