Payroll Tax Wage Bases And Limits In QuickBooks

This article will help you to know about the 2020-19 wage bases and limitations. We will also be telling you how to update them for following taxes:

  • Social Security
  • Medicare
  • Federal Income Tax
  • State Income Tax
  • State Unemployment Insurance

Understand Annual Wage Base Limits

A wage base limit is the taxable earnings of the per-employee cap. When your employee completes the cap, the taxes can get stopped or increased.

Note: Tax calculation will get restarted if your state or the federal govt. modifications of the wage base limit. However, in case your employee has multiple job, wage base limits will be as per employee, per employer, per year.

How To Update Wage Base Limits?

If you can make changes in the wage base limits, you don’t have to update every year if you are a QuickBooks user.

QuickBooks Desktop Payroll Enhanced or QuickBooks Desktop Payroll Assisted

Make sure that the wage base limits are updated to the latest version. You can update the wage base limit by following the steps provided in the article: download the latest payroll updates.

Intuit Payroll or QuickBooks Online Payroll (all versions)

In these products, there is no need to do anything because the limits will automatically get updated after updating your payroll tax tables.

See wage bases and limits (for reference)

Federal Income Tax basically depends on the employee. See IRS Publication 15 (Circular E) for calculations.

Note: There are separate wage base limits for Employees and employers for Social Security and Medicare taxes.

2020

Tax type Employer rate Employee rate Wage base limit
Social Security 6.2% 6.2% $137,700.00
Medicare 1.45% 1.45% Varies
Additional Medicare 1.45% 2.35% Varies
FUTA 0.6% N/A $7000.00

Check out SSA 2020 Fact Sheet for Social Security information.

Note: For employees, withholding of 0.9% for a total rate of 2.35% is there as additional medicare if they reach the wage limit for their filing status. See the IRS FAQ for more information.

2019

Tax type Employer rate Employee rate Wage base limit
Social Security 6.2% 6.2% $132,900.00
Medicare 1.45% 1.45% Varies
Additional Medicare 1.45% 2.35% Varies
FUTA 0.6% N/A $7000.00

Note: For employees, withholding of 0.9% for a total rate of 2.35% is there as additional medicare if they reach the wage limit for their filing status. See the IRS FAQ for more information.

State wage bases and limits are different for State Income Tax and State Unemployment Insurance. Please see Payroll Tax Compliance for wage bases and limits.

Note: To get details regarding state taxes, you can visit your state tax agency’s official website.

How To See Your Employee Wage Base Limits

With this report, you get detailed information about how the taxes are calculated by QuickBooks on employee paychecks and the wage limit for per-employee for per-tax.

QuickBooks Desktop Payroll Enhanced or Assisted Payroll

  • From the main menu of QuickBooks, go to Reports > Employees & Payroll.
  • Choose Payroll Detail Review.
  • Select This Calendar Year from the Dates ▼ drop-down options.
  • Click on Refresh.

QuickBooks Online Payroll (all versions)

  • From the main menu of QuickBooks, go to Reports > Payroll Tax and Wage Summary.
  • Select This Year from the Dates ▼ drop-down options.
  • Choose Run Report from the drop-down options.
  • Click on the tax type that you want to see the wage base for.

Intuit Online Payroll Enhanced or Intuit Online Payroll Full Service

  • From the main menu of QuickBooks, go to Reports > Payroll Tax and Wage Summary.
  • Select This Year from the Dates ▼ drop-down options.
  • Choose Run Report from the drop-down options.
  • Click on the tax type that you want to see the wage base for.

Technical Support For QuickBooks Desktop & Payroll

The steps mentioned in this article should be helpful for you in understanding the payroll tax wage bases and limits. Understanding this concept is quite simple and easy to understand but sometimes you can face several errors and issues in it as well. In such situations, you can get in touch with our technical support department by dialing our toll-free QuickBooks Support Phone Number +1800-440-0285 to get instant QuickBooks support.

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