Many users have experienced that their payroll taxes are often stopped from being calculated despite having an active QuickBooks Payroll subscription. It is essential to be regularly updated, so that in case your QuickBooks stopped calculating employees payroll tax, you can resolve it as soon as possible.
Now, as a QB user, you need to ensure that your software is updated to the latest tax table with the correct employees’ information updated. Taxes like State Disability Insurance, Medicare, State Unemployment Insurance, and Social Security are calculated. However, this calculation of taxes is based on a percentage.
With the help of this detailed guide, you will get a clear understanding of why this problem occurred and how to resolve it effectively. We will guide you through the issue with QB not calculating employees’ payroll tax and the methods to troubleshoot it.
While trying to fix and restart the employees’ calculation function in QuickBooks, you might get stuck in complex technical difficulties. Therefore, consider scheduling a consultation with QB Experts by dialing +1(855)-738-0359.
Why Has QuickBooks Stopped Calculating Employees Payroll Tax?
The primary cause that usually leads to the QuickBooks stopped calculating employees payroll tax error is getting $0.00 on paychecks. Now, that may also be caused due to other reasons, such as:
- Updated the calculated tax and salary amount of the agency in the latest Tax Table version.
- The accumulated total amount might have been affected by the number of allowances and filing status.
- There may be wrong input in the quarterly wage tax or the annual wage tax.
- Unusual number of created paychecks.
- Incorrect salary amount for employees.
After listing all the possible reasons why your QB stopped calculating employees payroll tax. Now, we will discuss how to resolve it with the help of some effective troubleshooting methods.
Simple Methods to Resolve the QB Payroll Not Deducting Employee Taxes Issue
The QB Payroll must operate continuously without interruption. When QB stopped calculating employees payroll tax, it is a sign that you were receiving $0.00 paychecks. We need to resolve this to access the well-calculated data. There are several methods to eliminate it; let’s discuss each of them in detail.
Method 1: Verify the Employee Information
If you want to resolve the issue of QuickBooks stopping calculating employees payroll tax, then first, you must ensure that the information filled in the Employee Information is correct. To do so, you can take the following steps outlined below:
- Open QuickBooks
- Click on Employees and Payroll under the Reports tab
- Then, select the Employee Withholding
- Locate the Customize Report tab
- Next, choose Columns to Display
- Move to the Display and find the items you wish to select
- Then, select OK
- Now you need to confirm that the employees are set up correctly and organized according to the respective local, state, and federal taxes
- Select the employee name to edit changes in the Employee Information
- In the Payroll Info, tap on Taxes to verify that the information is accurate according to the guidance for local, state, and federal taxes
Remember that if the changes you made in the middle of the year, even if they are done to the employee’s subject, the problem can persist. Check again if QuickBooks stopped calculating employees payroll tax issue has been resolved.
Method 2: Verify and Confirm the Integrity of Taxes
If the QB stopped calculating employees payroll tax, the problem persists; it may indicate that you are tracking incorrect tax. In such cases, you need to check the integrity of the data you are tracking. You can take the following steps to address this issue, allowing you to continue using payroll as usual.
- Start by opening the QuickBooks Desktop
- Find the QB menu and select Lists
- Tap the Payroll Item List
- Then, double-click the Payroll Item
- Hit the Next button two times to open the Tax Tracking window
Now, verify whether the authentic tax is being tracked according to the listed Items. After confirming it, again, check if the QuickBooks stopped calculating employees payroll tax issue is resolved. Still, facing the same data calculating error? Then, move on to the next solution.
Method 3: Ensure the Rates in the Items are Correct
To ensure the integrity of the listed rates in the item list, follow the steps outlined below.
- Access QuickBooks and find the Account column of Payroll Items
- When you see an incorrect item in the Account column, double-click it
- Then, click on Next
- Move the Rates window and modify the incorrect rates
- Lastly, hit Next and save the made changes
This given method will help you resolve issues related to incorrect rates being inserted into the item lists of QuickBooks Desktop.
Method 4: Revert the Employee Paychecks
QuickBooks stopped calculating employees payroll tax, which might indicate an issue with the paychecks. To address this, you need to review and adjust the employee paychecks as needed. To accomplish this, follow the instructions below.
- Access the Employee’s payroll information in QB Desktop
- Then, right-click on the highlighted Employee’s name in yellow color
- Finally, choose the Revert paycheck option
This will revert the paycheck if needed. After this, check again if the problem persists. Follow the method below to resolve it.
Method 5: Review the Employee Withholding Report
You should ensure that the year-to-year or quarter-to-quarter tax and wage information is correct. In case it is incorrect or missing, QB stopped calculating employees payroll tax. Therefore, it is essential to maintain the integrity of the data of all active employees. To check it, follow the steps below in the given order.
- Open QuickBooks and find the Report menu
- Head to the Employees and Payroll tab
- Select the Employee Withholding, followed by Customize Report
- Then select the columns that are needed
- Next, go to the Display List section
- Choose the items you wish to display on the report
- Tap OK and ensure that the employees are correctly set according to the respective state, local, and federal tax requirements. Also, modify the information as per the requirement
- If you wish to edit the information, head to the Employees section, pick the employee’s name, and now wait till the employee information window appears on the screen
- Tap on Payroll Info, and find the Taxes tab
- Then, choose the Federal, State, or Other option to proceed
- Enter the new information and review it
- Marked the employee correctly for the taxes and ended the process
After reviewing the report, process the payroll to verify that the taxes are being calculated correctly. After checking if QB stopped calculating employees payroll tax, if it continues, then attempt the following steps to eliminate it.
Method 6: Review and Validate the Payroll Service Key
The problem you are facing may indicate some disturbance in the payroll subscription status. This could be one of the reasons why QuickBooks stopped calculating employees payroll tax. You need to manage the service key to counter it, and this move will help ensure it is correct by following the detailed instructions below.
- Open QuickBooks and find the Employees menu
- Next, choose My Payroll Service
- Then, tap on the Manage Service key
- Go through QuickBooks Service keys and select the Edit option
- Delete the existing service key if it’s incorrect
- Enter the correct key and tap Next, followed by Finish to save the new service key
Now, rerun QuickBooks Payroll and check if QB stopped calculating employees payroll tax. Follow the next method if it still exists.
Method 7: Verify If the Employees’ Annual Limit is Exceeded
Occasionally, this issue arises because the employee for whom you are calculating taxes has exhausted the annual limit specified. In that case, the tax will not be calculated. Now, to resolve QuickBooks stopped calculating employees payroll tax, you should edit the year limit by using the detailed steps:
- Head to the Lists to choose payroll items from the top bar
- Next, right-click on the payroll item you wish to change
- Choose Edit payroll items
- Then, navigate to the Limit Type section
- Next, check the employee’s tax calculation limit that you have chosen. Also, you can change the limit after revising the amount shown on the screen
- Access the Limit Type tab and make sure that you have selected the correct option
- Annual – It will start again each year
- Monthly – It will start again every month
- One-Time Limit
- Lastly, click Finish to save the updated settings.
Once done with that, verify if QB Desktop withholds the employee’s taxes. If not, then proceed with the next method to resolve the QuickBooks stopped calculating employees payroll tax issue.
Method 8: Erase the Duplicate Payroll Tax Item
QuickBooks will not be able to ensure the accurate calculation of taxes if duplicate payroll tax items exist for an employee. Of course, that will lead you to several errors, like the QB stopped calculating employees payroll tax problem. So, it becomes essential to delete duplicate tax items.
- Access QB Desktop
- Expand the Employees menu and choose Employee Center
- Tap on Payroll Info to choose Taxes
- After that, click on the Other option
- Now you need to identify the duplicate payroll tax item
- Then, tap on Delete
- Click OK and reopen the QuickBooks Desktop to create paychecks for the employees with the correct calculation easily
If QuickBooks Payroll is not calculating taxes, and the issue persists. No problem, follow the solution provided below.
Method 9: Update QuickBooks Payroll Tax Table
Outdated QB software and the Payroll Tax table could be the reason behind QuickBooks stopped calculating employees payroll tax. Therefore, ensure that the version of the software you are using is up to date and that the tax table you want to work with is correctly updated.
If you find that you are not using the latest version, update QuickBooks Desktop first, and then update the Payroll Tax Table. After that, you should process the payroll again to verify that the taxes are deducted according to the fixed tax rates.
Conclusion
This blog shares a compilation of the most effective solutions regarding whether your QuickBooks stopped calculating employees payroll tax. It is recommended to follow each method we have provided and try them in the given order to avoid further inconvenience. We hope you find value in the information we have provided in this blog. However, these given methods are not so instant and easy for a person who doesn’t understand these technical difficulties. Therefore, when you feel unable to resolve it, seek expert assistance. Get a one-to-one professional consultancy to fix the QB stopped calculating employees payroll tax issues by calling us at +1(855)-738-0359.
Frequently Asked Questions (FAQs)
There are many common reasons why QuickBooks stopped calculating employees payroll tax. The primary reason for this is outdated QB and incorrect paycheck details, including incorrect contribution amounts. Inactive payroll subscriptions and incorrect tax filing statuses can cause QB payroll to fail to deduct taxes.
To do a complete Payroll Tax calculation, you should keep the following legal documents handy.
1. Form W-4: Try to keep the employee’s withholding certificate
2. Direct Deposit Authorization Form
3. Also, remember State W-4 (according to the applicability)
4. Form I-9, also known as the Employment Eligibility Verification
These forms should be handy while calculating all types of payroll taxes. Try to keep all these legal documents in a safe folder.
The first condition to utilize the QB payroll is that you must have an active QB payroll subscription. Please note that automatic payroll is only available in the QuickBooks Online version. In the Online version, you don’t need to take a single action.
The first thing you need to remember is to keep the QB Desktop updated to the latest version. To update the QuickBooks payroll tax table, you have to head to the QB software. Then, you have to expand the Employees menu and select the Get Payroll Updates button. Next, locate and choose Download Entire Update option. After that, tap on Update, and once the process is finished, you will have to wait for an information window to appear on the screen to confirm success.
Kate is a certified public accountant (CPA) with expertise in various accounting software. She is technically inclined and finds passion in helping businesses and self-employed people carry out bookkeeping, payroll, and taxation without worrying about errors. Every once in a while, Kate loves to travel to far-off places and relax in the lap of nature.