Why QuickBooks Payroll Not Calculating Social Security and Medicare?

You are stuck that QuickBooks Payroll not calculating Social Security and Medicare then here is the solution that help you […]

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You are stuck that QuickBooks Payroll not calculating Social Security and Medicare then here is the solution that help you to fix it out. Follow steps to fix it and makes your account of QuickBooks payroll calculating social security and Medicare to make your work easier and saves time.

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Reason For Social Security and Medicare Taxes are Calculated Incorrectly

There are a few reasons why Social Security and Medicare taxes are calculated incorrectly. Consider the following:

  • Either the QuickBooks is not updated to its latest available version.
  • There might be an internet interruption during the update.
  • Using the incorrect tax table version.
  • Employee’s YTD is off.

Download the Latest Update of Payroll Tax Table

In order to isolate the problem, let us ensure that you are able to download the latest tax table of the update version. You can check that by following these below mentioned steps:

  • Go to the Employees tab.
  • Select Get Payroll Updates.
  • You will see the tax table version beside the Payroll Update info button.

There might be a chance that you are using the correct version of the software and still facing the error. If that’s the case, there is a possibility of any discrepancies or zero deductions for the SS and MD amounts on the employee’s paycheck. We can also utilize the report of Payroll Detail Review in order to verify the taxes withheld and the existing difference that is creating discrepancy. Here’s how:

  • Go to the Reports menu.
  • Select Employees & Payroll.
  • Choose Payroll Detail Review.
  • Then you need to click on the Customize Report tab (if you want to run a specific report).
  • Choose the Display tab and select the date range from the drop down list or fill in the from and to dates.
  • In the Filters tab, you should choose the Payroll Item from the Filter section. After this, you need to select the multiple payroll items in the Payroll Item drop-down list.
  • In your selection, you should include these details such as Medicare Company, Medicare Employee, Social Security Company and Social Security Employee.
  • Once done, click the OK button twice.
  • On the report, as a final step you should review if the checks have the correct deductions. You can also get the correct calculation by multiplying the total wage base of each payroll item to its corresponding tax rate. If the figures are correct, then there is nothing left to be done.

Ways to Remove the QuickBooks Payroll Not Calculating Social Security and Medicare

However, if QuickBooks has overhauled the Social Security and Medicare taxes, there are 2 ways to remedy the situation. Here’s how:

Option 1: You need to Apply the Taxes to Your Next Month’s Paychecks.

For this, QuickBooks has an automatic calculation feature which will be accurate as well as efficient. For rate-based taxes deducting, it will update the overpaid taxes to your next payroll run.

Option 2: You can Create a Liability Adjustment and offset the Overpayment.

  • First of all, you need to close your company files and your QuickBooks Desktop account.
  • Click the Windows icon on the toolbar.
  • Search for QuickBooks Desktop.
  • Press the right click on the icon and choose the Run program as administrator.
  • In the Open screen of No Company, you need to go to the Help menu and select the Update QuickBooks Desktop option.
  • Click the Options tab.
  • Select Mark All and then hit Save.
  • You need to go to the Update Now button, then you should choose the Reset Update checkbox.
  • Click Get Updates when you’re ready.

When the payroll taxes are not deducted from your employee’s payroll, then you will have to check the order of the payroll items on the paycheck. This will enable you to determine if the payroll item order is affecting the calculation. After all this, you may also want to include certain additions as well as deductions in the computation. Adding the payroll item after those items is something you are required to complete.

Next thing to do is to verify whether the payroll item is set for calculating the quantity, hours, or neither. With this, once a payroll item is set to calculate on the basis of quantity or hours, you would have to manually enter the quantity or number of hours in the Quantity column in the Preview Paycheck window. This approach will keep it accurate as well. As per recommendation, changing the calculation settings of the payroll item will be the smart choice. Here’s how:

  • From the top menu bar, you need to select Lists and Payroll Item List.
  • Then you need to press the Right-click on the payroll item you want to change and click Edit Payroll Item.
  • You should also choose the Next button until the Calculation is based on the Quantity screen.
  • Then you should change the setting to Neither if this item does not require hours or quantity to calculate.
  • Select Next until you can click Finish.
  • Hit Finish.

After that, you should verify if the annual limit has been set or has already been reached. Once a payroll item has been calculated correctly in the past and stops calculating on a paycheck, it might be a checkmark. This is considered to be an annual limit checkbox and a default limit set which the employee has reached. To confirm this, please follow the steps below:

  • In the top menu bar, choose Lists. Then, Payroll Item List.
  • You need to press the right-click on the payroll item you want to change and click Edit Payroll Item.
  • Choose next until the Limit Type screen.
  • Verify the limit visible in the bottom box is accurate. [If the mentioned limit is correct then, the employee’s payroll item calculation should stop at this limit. If the limit is found to be incorrect, then you need to update the amount.]
  • Below the Limit Type, you should verify whether the correct option is chosen.
  • Change the default limit and/or Limit Type selection accordingly.
  • Hit Finish.

At any point, you may need assistance for QuickBooks or the above mentioned process. We will always be there at your disposal.

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