Learn how to calculate and manage payroll with QuickBooks Paycheck Calculator including gross wages, payroll taxes, and benefits. Calculating paychecks accurately can be a real hassle for small and medium-sized businesses, especially if they’ve recently experienced a good growth rate.
With more and more employees coming into your organization, the task becomes herculean. Fortunately, QuickBooks provides a paycheck calculator, if you have the payroll subscription enabled.
Types of Payroll Calculators Are:
- Salary Paycheck Calculator
- Hourly Paycheck Calculator
- Net-to-Gross Paycheck Calculator
Why Need QuickBooks Paycheck Calculator?
QuickBooks payroll calculator enables you to calculate the wages of your employees accurately and within seconds. Along with pay, you can also calculate the withholdings and tax amounts. You can calculate wages for hourly wage earners, freelancers, and salaried employees.
All you need to do is enter your employee’s wage, the rest of the calculation can be left to the payroll calculator, which will create a breakup of the salary and give the deductions needed for Medicare and social security.
The payroll calculator is updated with the most recent federal and state tax information, making it a reliable source for tax preparation. Once you’ve entered the wage, you’ll get information about the taxes that need to be paid and the total amount for taxes.
For Extra pay
You can also enter and calculate the amount to be paid as overtime, commission, and bonus. You can do this for both hourly wage earners and salaried employees.
How to Calculate and Manage QuickBooks Payroll?
Note: You need to go through the federal guidelines if you want to calculate payroll costs for Paycheck Protection Program (PPP).
According to the law, you must pay your employees not only on time but also accurately. Payroll expenses are the largest costs a business has to undertake. Below, you’ll find all the information required to calculate wages, bonuses, commissions, and taxes with the QuickBooks Payroll calculator.
Before we begin talking about payroll, we need to understand what it includes. Here are the three basic components of a payroll:
- Remuneration – The wage that the employer has agreed to pay the employee
- Cuts – All employees must make social security and Medicare contributions from their payroll.
- Unemployment Taxes – Depending on the jurisdiction, the employee must contribute via unemployment taxes.
- Benefits – All of the benefits paid by the employer to the employee is included in the payroll.
Further, at the year-end, appropriate amounts of state and federal income taxes are to be deducted from an employee’s wages. The employer must make sure that these taxes are paid accurately and timely.
To calculate payroll, you have the following options:
- Hire a certified accountant who will do all the work for you
- Use an online service like Intuit’s Online Payroll
- Use a Software Like QuickBooks Payroll
- Use free services like Paycheck Calculator
With QuickBooks Payroll, you get the following benefits in relation to calculating paychecks:
- Automated Payroll Process – Paychecks will be automatically calculated and information about deductions will be available.
- Direct Deposit – You can set up a direct deposit in order to send wages directly into an employee’s bank account.
- Connect to Experts – You can connect to Mammoth HR advisors who’ll inform you about best practices.
- Reporting – Payroll is an expense, and thus must be minimized. With reporting, you can gather insights on the basis of which you can make future business decisions.
QuickBooks Paychecks Calculating Incorrectly
Based on the payroll information you have supplied in your payroll product, QuickBooks calculates your paychecks. Your paychecks may calculate sometime differently know what why.
Reasons for QuickBooks Paychecks Calculating Incorrectly
- The payroll item, tax, or employee setup in QuickBooks
- The wage limit has been reached
- The tax table in your QuickBooks Desktop Payroll is out-of-date.
How to Troubleshoot the QuickBooks Paychecks Calculating Incorrectly
If paychecks are calculating incorrectly into your QuickBooks Payroll, start by reviewing the payroll system settings and ensuring they are accurate. Check for any setup payroll, manual entry errors, and tax update.
Method I- Check out incorrect setup of payroll items
Verify that the setting of your payroll wages, deductions, or contributions is accurate, and then adjust your payroll product as necessary in QuickBooks Online Payroll, QuickBooks Desktop Payroll Assisted, and QuickBooks Desktop Payroll Enhanced, Standard, Basic.
Method II- Payroll tax update
Make sure the tax table is current and that your QuickBooks Desktop Payroll is supported.
Method III- Annual or Maximum limit has been reached
Run a tax and wage summary report if some of your payroll components, such as deductions, contributions, or vacation or sick pay, aren’t calculating correctly. Check to see whether they have hit the limit you set to withhold for a specified amount of time. Also, verify that each payroll item’s configuration is accurate.
Method IV- No Income Tax or State Unemployment Insurance withheld
Check to see if the SUI rates or configuration are proper in your payroll product, and make any necessary updates.
Method V- Net amount or net pay is zero
If you have a zero net paycheck it doesn’t always mean it’s correct. You have to check if this paycheck was created to contribute toward an employee’s income tax or retirement.
Method VI- Incorrect year-to-date (YTD) amount
You will notice that the YTD amounts on the previous payroll are higher than the payroll for the current pay date if you decide to create a payroll that you missed from the previous pay period after submitting the payroll for the current pay date. This doesn’t always imply that the YTD total is off. The most recent paycheck created, not the most recent pay date, will display the most recent YTD totals. The YTD amounts on a paycheck cannot be changed by QuickBooks. Instead, you can confirm the employee’s accurate YTD numbers by running a payroll details report.
May be useful- QuickBooks unable to calculate payroll taxes
Prerequisites for Setting up Payroll
Settings up payroll require a lot of information. You must ensure the accuracy of this information on your own. If the information you entered is wrong, then the calculated payroll, including deductions for social security and taxes will also be wrong.
Before you set up payroll in QuickBooks, you need the following:
- Information Related to Company – Company’s bank account
- Employee Information
- Form W-4 for each employee
- Pay Rate
- Pay Schedule
- Hiring and Termination Dates
- Direct Deposit Information – If you want to deposit wages into the bank account of your employees, then you’ll require this information
- Tax Information
- Electronic Federal Tax Payment System (EFTPS) enrollment
- Federal Employer Identification Number (FEIN)
- State Agency ID
- Other Tax Information
- Prior Payroll information – If you’ve already paid employees for the current calendar year, then you’ll have to enter that information manually into QuickBooks Payroll
- Liability Information
After gathering the information, you’re all set up to configure payroll in QuickBooks desktop, mac, or online. The payroll subscription can be enabled in all versions of the software. Further, you can get a separate Intuit payroll service, if you don’t want to use am accounting software.
Setting up payroll is easy. QuickBooks Payroll provides a setup wizard which will assist you with the whole process. Here’s how you can get to this wizard:
- Start QuickBooks Payroll
- Go to the Employees tab from the Top Menu
- Click on Payroll Setup
- Follow the instructions provided by the Payroll Setup Wizard
Once you’ve started the process, the setup wizard will prompt you for all the required information. After entering all the information, you can easily automate the payroll process.
Note: If you plan to enable direct deposit for employees, then you must submit Payroll Direct Deposit authorization form for each of them. You can download a copy of the same from the internet or from the payroll software itself.
Payroll is essential for every business. Managing a small or medium-sized company without good payroll software can be unfeasible. In order to get accurate paychecks and deductions, you can rely on an all-encompassing solution like QuickBooks Payroll, and connect to the QuickBooks Payroll Consultant team.