Quickbooks Payroll Taxes Not Being Deducted

Get the latest payroll updates and ensure QuickBooks deducts payroll taxes by following these steps:

💠 Go to the Employees menu.
💠 Click on Get Payroll Updates.
💠 Click on the Download Entire Update checkbox.
💠 Click on Download Latest Updates.
💠 Click on Ok when you get the confirmation message.

Note: You can only install the latest payroll updates by downloading the files from the internet. The tax tables CD is no longer a viable option for installing such updates in QuickBooks desktop.

To further ensure that your payroll updates work smoothly, Intuit recommends that you install the latest QuickBooks Desktop updates on your system.

To get the latest QuickBooks desktop updates, follow these steps:

💠 Choose the Help menu.
💠 Click on Update QuickBooks Desktop.
💠 From the Update Now tab, choose the option Reset Updates to delete all the previous update downloads.
💠 Click on Get Updates.
💠 After the update files are downloaded, exit QuickBooks Desktop.
💠 When the prompt for installing the updates appear, click ok Yes so that QuickBooks can begin installing the updates that were recently downloaded.
💠 Launch QuickBooks Desktop.

Note: You may still have to manually update a few rates such as the State Unemployment Insurance rate. New state taxes are generally released at the start of a new calendar year, so you’ll have to update your tax tables accordingly. And since these taxes are updated by the state, they may not show up in QuickBooks payroll until you enter them manually.

Many underlying issues can result in QuickBooks calculating paycheck amounts incorrectly. We’ve provided a few methods that you can use to find the underlying problem and fix it; otherwise, Quickbooks payroll taxes will not be deducted properly.

To check the Net or the Gross value used for deduction of payroll item, follow these steps:

💠 Launch QuickBooks.
💠 From the top menu bar, choose the Lists option.
💠 Click on the Payroll Item list.
💠 From the available deductions, right click on the one that you want to verify.
💠 Choose Edit Payroll Item.
💠 Click on Next.
💠 On the Gross vs. Net screen, verify the selected preference for the particular item.
💠 Click on Next, then Finish.
💠 Click on Finish again

Based on your preferences, you may also have to check the time basis on which the payroll item is calculated. A particular item can be calculated on the basis of both quantity and hours. Further, you can select neither as the option for some payroll items.

To verify that the payroll limit hasn’t been reached for a particular payroll item, follow the steps below:

💠 From the top menu bar, click on Lists.
💠 Choose Payroll Item List.
💠 From the provided list, right-click on the item that you want to check the limit for.
💠 Choose Edit Payroll Item, then Next.
💠 When the Limit Type screen appears, verify the limit mentioned in the bottom box.
💠 You’ll get two options:
1. The limit for the payroll item is correct: this will cause the calculation at the limit.
2. The limit for the payroll item is incorrect: you’ll have to update the amount to be set as a limit to resolve the error.
💠 Go to the Limit Type option.
💠 Select the correct option from the following available preferences:
1. Annual – the calculation restarts each year
2. Monthly – the calculation restarts each month
3. One-time limit – the limit is set once
💠 Change the default limit and period according to your preference.
💠 Click on Finish.

You’ve successfully updated the settings. At this point, QuickBooks Payroll Taxes should be properly deducted from the paycheck. However, if Quickbooks Payroll Taxes are not being deducted, then move to the next method.

QuickBooks Desktop payroll has the ability to calculate percent-based taxes and apply the amounts to the paycheck automatically. But when these deductions aren’t calculated properly, QuickBooks cannot deduce the payroll taxes from the paycheck. When amounts on all the paychecks are incorrect, it basically means that you don’t have the latest updates installed.

If there’s a tax calculation error on a specific paycheck, then you’ll have to revert a paycheck, update the tax tables, then create the payroll to ensure that the deductions show up accurately.

To revert the paycheck and show deductions on QuickBooks payroll paycheck properly, follow these steps:

💠 Go to the Payroll Information for the particular employee.
💠 Right-click on the name of the Employee that has incorrect deductions.
💠 Click on Revert Paycheck.

Once you’ve reverted the paycheck, you’ve successfully refreshed the payroll information so that QuickBooks payroll can now accurately calculate taxes on the payroll amount.