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Vandasar
August 28, 2023
Question

Simple Retirement Calculation

  • August 28, 2023
  • 1 reply
  • 0 views

Just off a support call with QBO payroll elite support concerning incorrect simple retirement calculations. Employees for one of my clients have medical and vision deducted. The Simple contributions are being multiplied by gross minus the medical & vision deductions. This is incorrect because simple deductions are always from gross compensation. The support rep, Dani, told me that this is due to the order in which the deductions were entered. So since medical and vision deductions were entered first, the system will deduct these before doing the Simple calculation. The fix, she said, was to remove all deductions and add Simple contribution first. When I asked for an escalation because this was not per IRS rules, she said this wasn't possible. Does anyone have any insight on this issue? When did this change? My company reconciles Simple accounts and this has not occurred in the past.

1 reply

R
rvrfrf
August 28, 2023

Thanks for reaching out to the Community, Vandasar. I appreciate your detailed information.

 

It's possible the client you're working with might have set up their simple contributions as percentages of gross. When creating a contribution, they have options to choose how they want to deduct their amount, as flat or a percentage of gross, then they can specify an amount or percentage depending on which option they chose.

 

If they set their contributions up as percentages of gross, and need to make changes, they can do so while editing retirement plan items.

 

Here's how:
 

  1. In your left navigation bar, go to Payroll, then Employees.
  2. Find an employee and click on their display name.
  3. From the Deductions & contributions section, hit Start or Edit.
  4. Press Edit (✎) next to a contribution/deduction you want to modify, then make your changes. You can also click the Trash bin icon to remove it.
  5. Hit Save.
  6. Select Done.

 

If their simple contributions appear to be set up correctly already, I'd recommend sharing a screenshot of the setup they're working with. This will help me to better understand the situation and see what may be causing their incorrect calculations.

 

I've also included a  detailed resource about working with contributions which may come in handy moving forward: Set up state retirement plans

 

I'll be looking forward to hearing back from you. Have a wonderful Monday!

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