How do I Account for Employee Withholding in Quickbooks?
Financial accounting software such as Quickbooks offers businesses a way to handle payroll quickly and accurately. Part of the process of setting up employee information in the system is entering the correct information from the employee's W-4 so taxes are calculated and withheld properly. Correct withholding means the employee takes home the right paycheck and the employer will not have problems when it's time to file the quarterly reports with the government.
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Instructions
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Open the Quickbooks software. Select "Employee Center" from the toolbar in the upper part of the screen.
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Select the "Employees" tab in the upper left corner of the window. Scroll down the list of employees until you find the employee whose withholding must be updated and click on the name. Click on the "Edit Employee" button in the upper right of the window.
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Look at the name on the window to verify that you have selected the correct employee. Next to the option labeled "Change tabs," click on the arrow and select the choice for "Payroll and Compensation Info." In the center of the window, click the button marked "Taxes."
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Select the "Federal" tab. Next to the option labeled "Filing Status," click on the arrow and select the appropriate filing status as listed on the employee's W-4. Enter the number of allowances claimed on the W-4 in the "Allowances" box on the screen. If the employee has requested additional withholding, enter that amount in the "Additional Withholding" box on the screen; otherwise, leave it blank.
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Select the "State" tab. Select the two digit abbreviation for the state by clicking the arrow next to "State Worked." Select the two digit abbreviation for the state again by clicking the arrow next to "State Subject to Withholding." If there is withholding tax for the state you select, the window will update to provide places to enter filing status and allowances. Enter them as you did for the federal taxes, using the information on the employee's state withholding form.
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Click "OK" to save your changes.
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Tips & Warnings
Employees may claim different allowances on federal and state withholding forms. Pay attention and enter the information as it appears on the employee's forms.
In most cases, the state where the employee works and the state subject to withholding will be the same, but if you are not sure, check with a manager or accountant to verify the correct states.
