Beginning July, Wave is simplifying the automated payroll tax payment process.
As a result of this update, you will see small changes to how and when your tax payments are withdrawn in the month your account is updated, and every month thereafter.
What steps do I need to take?
There is no action for you to take, and there is no change to which payments and filings Wave automates as part of your service.
How will I know when my account is updated?
You will be contacted by email before your account is updated, provided with the date of the change, and an example of how the change will affect your payroll tax payments during the first month after the update. You do not need to request the update.
What are the benefits?
This change will help make budgeting your payroll tax payments easier, as you can expect fewer withdrawals from your funding account, they will occur at the same time each month and Wave will make all tax payment withdrawals. This means you don't need to worry about multiple agencies withdrawing from your funding account.
There will be one withdrawal per month on the 5th (or the first business day after) that is for both IRS and state taxes. There will also be up to four reconciliation transactions annually, which you will see in January, April, July and October.
This update also means that funding account changes become a one-step process that you can manage yourself in Wave, from settings > funding account.
Frequently Asked Questions
Why don’t I see IRS or state tax payment withdrawals on my bank statement anymore?
Once your account is updated, payroll tax payments will be withdrawn and paid by Wave. This will take place instead of Wave scheduling tax payments between your funding account and the IRS or state agency.
Where can I see payroll taxes in Wave?
You can review accumulating, due, and paid payroll taxes in Wave by going to Payroll > Taxes.
When are my taxes withdrawn?
IRS Withholding Monthly depositors: All taxes are withdrawn on 5th of the month. If the 5th of the month is not a business day, the withdrawal will be on the next business day.
How can I tell when my taxes were paid?
While using Wave's automated tax payment system, you are still responsible for the timely deposit of payroll taxes, ensuring funds are available. In addition to checking tax payments in Wave, you can also confirm directly with the IRS, using the IRS-provided EFTPS enrolment.
What is a reconciliation transaction?
Wave creates a reconciliation transaction up to four times a year to ensure your tax withdrawals match your payments. This takes place during the quarter-end filing months of January, April, July and October. As part of the quarterly filing process, Wave calculates the small difference between the amount withdrawn and the amount due. The difference is then deposited or withdrawn from your funding account. It is possible that rounding to the nearest penny matches the final amount due. In that case you will see no reconciliation transaction for the quarter.
Why is a reconciliation transaction needed?
When you approve payroll Wave calculates taxes due to the nearest cent, but the amount due for some employer-paid taxes like state unemployment (SUTA) is calculated based on the total paid during the quarter. This means there may be a small variance created by rounding. Wave creates a reconciliation transaction to make sure we have the funds to make payment on time.
When will I see a reconciliation transaction?
Reconciliation is part of the quarterly filing process. You can expect to see a deposit or withdrawal shortly after the 7th of the month in January, April, July and October. It is possible that rounding to the nearest penny matches the final amount due. In this case you will have no reconciliation transaction for the quarter.
Why do some months have a second withdrawal for taxes?
This second withdrawal is your quarterly reconciliation transaction. When to-the-cent rounding has resulted in Wave collecting less than what is due, we will withdraw the difference. This allows us to make your full payment on time.
Why do some months have a deposit from Wave?
This deposit is your quarterly reconciliation transaction. When to-the-cent rounding has resulted in Wave collecting more than what is due, we will deposit the difference to your funding account.
More questions? We’re committed to simplifying payroll so that you can focus on running your business. Our support team is here to help with any questions you may have and can be reached here.