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Change Payroll Tax Rate in QuickBooks Desktop


Everyone is aware that QuickBooks is a highly praised accounting program that provides the most up-to-date tools and information for managing business accounts. One of the features in QuickBooks that makes it difficult for the user to manage payroll and taxes for their company is the ability to change the payroll tax rate. 

Payroll management can be time-consuming and a little challenging. When managing the payroll, every detail must be taken into consideration. This is due to the fact that many employees are depending on you and anxiously awaiting their salaries. Setting up payroll taxes is crucial for these problems.

Payroll is an important part of a business, and choosing the option that will best meet your needs can be challenging. You can learn more about QuickBooks Payroll as a potential payroll option by reading the information below.

Whether you are using the Desktop or Online version, once payroll has been set up, run the payroll to ensure that everyone is paid on time. Simply enter the employee’s hours or weeks, and QuickBooks will accurately calculate everything else. Using the QuickBooks Payroll feature, you can pay and file your federal, state, and local taxes. After setup, you won’t need to manually update the taxes because QuickBooks Payroll will do it for you. You can also use QuickBooks Full Service Payroll or Assisted Payroll to handle electronic filing and tax payments. Regularly update the tax tables, and always check for updates prior to paying your employees. This makes you more up-to-date. The Online Payroll automatically updates if you are using it.

Reviewing your QuickBooks Desktop payroll tax rates now will help you ensure that all the limits and percentages are accurate. When updating for the new year, it occasionally forgets to update the state unemployment rate.


Check Payroll Tax Rates in QuickBooks Desktop 

To update payroll information

  • Click Employees > Get Payroll Updates > Update from the QuickBooks Desktop menu at the top. The most recent payroll updates will run as a result. Next, check the payroll list.
  • Click Lists > Payroll Item List from the QuickBooks Desktop menu at the top
  • Make sure that your company’s Illinois Unemployment Tax rate is correct (especially if it has changed since last year). You can check your current tax rate on your MyTaxIllinois account.
  • If the rate listed in QuickBooks is inaccurate, click on IL-Unemployment Company in the lower left corner
  • Select Edit Payroll Item, keep clicking Next until you reach “Update company tax rates,” enter the correct rate, and then click Next and Finish.

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    Check Payroll Tax Rates in QuickBooks Online

    • In QuickBooks Online click on the Gear >  Payroll Settings > State Taxes > IL State Unemployment Insurance (SUI) Set Up > Change or Add New Rate.

    You should check your state’s unemployment tax rate each year if you manage your own payroll using Self Service Payroll and have a company file in QuickBooks Online.

    Payroll Taxes Can be Affected by Payroll Tax Table 

    The payroll tax tables affect taxes such as

    Social Security Tax

    • Medicare
    • Additional Medicare Tax –
    • Federal Unemployment (FUTA)
    • State Unemployment (SUI)
    • State Disability
    • Predefined local taxes

    How to Change a Rate in QuickBooks?

    There are several options for changing rates in QuickBooks. Depending on the kind of item you need to change, you can use a variety of techniques. Both the payroll tax rates and the billing rates for particular items like services and discounts are programmable. The Item List in QuickBooks allows for the modification of the majority of item rates, including various state taxes. You must use the Employee Center to modify tax rates for regional payroll taxes.

    Change Item Rates

    • Choose “Item List” from the “Lists” menu.
    • Select an item from the list of available items whose rate you want to modify.
    • Select “Item” from the drop-down menu.
    • Fill out the Edit Item window with the new rate. You can alter the price, the hourly rate, or the flat rate depending on the type of item.5. To close the window and save the rate, click “Save.

    Change Local Sales Tax Rate

    • Select “Employee Center” from the “Employee” menu.
    • Select the “Employees” tab, then double-click on the name of the employee whose local payroll tax rate you want to modify.
    • From the drop-down menu on the “Change” tab, choose “Payroll and Compensation Info.”
    • Select the “Other” tab from the “Taxes” button.
    • After deciding which tax needs to be modified, enter a new rate in the Rate field. We assume that the rate is a percentage.6. To save the new rate, click the “Save” button.

    How to Modify Payroll Setting in QuickBooks Desktop?

    From the Payroll Tax Rates list in QuickBooks Desktop, the payroll tax rate can be modified.

    Configure payroll preferences

    • Go to QuickBooks, select Preferences, then Payroll.
    • In the Payroll window, go to The Employees > Payroll menu item: dropdown, then choose from the 2 payroll options: 
    • Select Launch or Get Started, then close the Preferences window.

    However, there are a few crucial things to understand about what will happen when you make this change in QuickBooks before you modify the payroll tax rate. Knowing how to change the payroll tax rate correctly is crucial because it can have a significant impact on your bottom line. By the end of this QuickBooks Desktop tutorial, you will be able to make your desired changes with ease because we will guide you through the procedure step-by-step.

    Frequently Asked Questions

    How do I change my State Unemployment limit?

    1. Click the Gear Icon.
    2. Go to Account and Settings.
    3. Select Billing and Subscription.
    4. On the Payroll subscription status, click Subscribe Now.
    5. Provide the payment information.
    6. Click Subscribe.

    How do I change the wage base in QuickBooks?

    1. Go to Reports.
    2. Select Payroll Tax and Wage Summary.
    3. From the Date Range ▼ drop-down menu, select This Year.
    4. Select Run Report.
    5. Choose the tax type you want to see the wage base for.

    How does QuickBooks Calculate Tax withholding?

    1. QuickBooks Desktop uses the percentage method when calculating income taxes.
    2. Income tax amount calculations are determined by your employee’s W 4 info, such as
    2.1 Employee’s filing status.
    2.2 A number of allowances or extra withholding amounts in the employee setup.
    2.3 Pay Frequency.
    2.4 Gross wage in a given pay period.

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