Annual limits in Quickbooks help automate the payroll process by stopping payments and deductions on paychecks when withholding or wages reach a certain amount. Quickbooks allows you to set limits for addition, deduction and contribution payroll items for the entire company or for individual employees. Most annual wage limits for federal unemployment, Social Security and state or local taxes are downloaded as part of the payroll subscription and cannot be changed. If laws defining these limits change, adjust Quickbooks by downloading the latest payroll updates.

Employee Level

Open the “Employees” menu and then choose “Employee Center.”

Double-click the name of the employee to be edited from the employee list,

Click the “Payroll Info” tab when the Edit Employee window opens.

Use the pulldown in the Item Name column of the Additions, Deductions, and Company Contributions table to select the addition or deduction to be limited for this employee. Skip this step if the payroll item is already listed in the table.

Enter the amount to be deducted or added per paycheck in the Amount column.

Enter the annual limit amount in the Limit column.

Click "OK."

Entire Company

Open the Lists menu and click “Payroll Item List.”

Double-click the payroll item to be edited.

Click “Next” six times, or until the “Default Rate and Limit” page displays.

Enter the company-wide limit in the text box for: “If this item has an upper limit…”

Click "Finish."


If a limit is set at both the employee and item levels, Quickbooks will use the lower of the two.

If some payroll items don't reset every year, check the box next to “This is an annual limit” in the setup for those payroll items.

Information in this article applies to QuickBooks 2013. It may vary slightly or significantly with other versions or products.