Of course, here is a detailed and lengthy post on creating payroll in QuickBooks Intuit.
How to Create Payroll in QuickBooks Intuit: A Complete Step-by-Step Guide
Hello there! Are you ready to take control of your business's payroll and simplify a process that can often feel like a juggling act? Great! Let's dive in and master how to create payroll in QuickBooks Intuit, the leading accounting software for small and medium-sized businesses. This guide will walk you through every single step, from initial setup to running your first payroll. Let's get started!
Step 1: Set Up QuickBooks Payroll
Before you can run a single payroll, you need to set up the QuickBooks Payroll service. This isn't just about turning on a feature; it's about configuring your entire payroll ecosystem. Think of this as laying the foundation for a sturdy building.
Choose a QuickBooks Payroll Plan
First things first, you need to select a QuickBooks Payroll plan that fits your business needs. Intuit offers several tiers, each with different features:
Core: This plan is great for small businesses that want to automate tax calculations and filings. It's a solid starting point.
Premium: This plan adds features like same-day direct deposit and workers' compensation management, making it a good choice for growing businesses.
Elite: The most comprehensive plan, offering white-glove service, 24/7 support, and even a personal HR advisor. Ideal for businesses with complex payroll needs.
Once you've chosen your plan, you'll go through the setup wizard. This is a crucial step where you'll provide all the necessary information for your company and employees.
Gather Your Information
To make the setup process smooth and seamless, gather the following information beforehand:
Company Information: Your legal business name, address, Employer Identification Number (EIN), and state tax ID numbers.
Employee Information: For each employee, you'll need their full name, address, Social Security Number (SSN), start date, pay rate, and payment method (direct deposit or paper check).
Payroll History: If you're switching to QuickBooks Payroll mid-year, you'll need your year-to-date payroll history for each employee. This includes wages, taxes withheld, and deductions.
Bank Account Information: The bank account you will use to fund payroll and pay taxes.
Step 2: Add Your Employees
Now, let's get your team members into the system. This is where you'll create their individual profiles and set up their pay details.
Enter Employee Details
Navigate to the Payroll Menu: In QuickBooks Online, go to the Payroll menu and select Employees.
Add an Employee: Click on the "Add an employee" button.
Fill in Personal Information: Enter their name, contact information, and hire date.
Set Up Pay Details: This is a key step. You'll need to specify:
Pay Schedule: Is the employee paid weekly, bi-weekly, semi-monthly, or monthly?
Pay Rate: Enter their hourly wage or salary.
Payment Method: Do they receive a direct deposit or a paper check? If it's direct deposit, you'll need their bank account and routing number.
Configure Deductions and Contributions
Beyond regular pay, you might have deductions (money taken out of the employee's paycheck) or contributions (money the company pays on behalf of the employee). This could include:
Health Insurance: Deductions for their portion of health insurance premiums.
401(k) or Retirement Plans: Employee contributions to their retirement accounts.
Garnishments: Court-ordered deductions.
Company Contributions: The employer's portion of health insurance or retirement plan contributions.
Step 3: Set Up Payroll Taxes
This is where QuickBooks truly shines. It automates the complex and often confusing process of calculating, paying, and filing payroll taxes.
Federal and State Tax Setup
QuickBooks will guide you through setting up your federal and state tax information. You'll need your Federal Employer Identification Number (EIN) and your state withholding account number.
Tax Forms: QuickBooks will automatically calculate and fill out forms like the W-2 and 941, making year-end and quarterly filings a breeze.
Tax Payments: With QuickBooks Payroll, you can set up automated tax payments, so you never miss a deadline. This is a game-changer!
Verify Tax Information
Double-check all your tax information to ensure accuracy. Incorrect tax settings can lead to penalties and fines from the government.
Step 4: Run Your First Payroll!
This is the moment of truth! Now that everything is set up, you can run your first payroll.
Enter Employee Hours
Go to the Payroll Tab: In the QuickBooks dashboard, navigate to the Payroll tab.
Start Payroll: Click on "Run Payroll" and select the pay schedule you want to run.
Enter Hours: For hourly employees, enter the number of hours they worked during the pay period. For salaried employees, their hours will automatically be filled in.
Review the Paycheck Details: This is a critical step. Before you finalize the payroll, review each employee's paycheck to ensure all the calculations are correct. Look at:
Gross Pay
Taxes Withheld
Deductions
Net Pay
Approve and Send Payroll
Once you've reviewed everything, click "Preview Payroll" and then "Submit Payroll". QuickBooks will then:
Process Direct Deposits: If you're using direct deposit, the funds will be transferred to your employees' bank accounts.
Create Pay Stubs: Employees can access their pay stubs through the QuickBooks Workforce portal.
Record the Transaction: The payroll transaction is automatically recorded in your QuickBooks ledger, updating your finances.
Step 5: Pay Payroll Taxes and File Forms
If you've opted for the full-service payroll, QuickBooks handles this for you. But it's still important to understand the process.
Automated Tax Payments: QuickBooks will automatically debit your bank account for the tax amount on the due date and pay the tax agencies for you.
Form Filings: QuickBooks will also file the necessary federal and state tax forms on your behalf. You'll receive confirmation once the forms are filed.
Step 6: Review and Report
After running payroll, it's essential to review your payroll reports. These reports give you valuable insights into your labor costs and tax liabilities.
Access Payroll Reports
In QuickBooks, you can find a variety of payroll reports, including:
Payroll Summary Report: A high-level overview of your payroll for a specific period.
Payroll Liability Report: Shows you how much you owe in taxes and other liabilities.
Payroll Tax Form Worksheets: Provides detailed breakdowns for tax forms like Form 941.
10 Related FAQ Questions
How to add a new employee in QuickBooks Payroll?
To add a new employee, go to the Payroll menu, select Employees, and click on "Add an employee". You will then be prompted to enter their personal and pay information.
How to set up direct deposit for an employee?
When adding a new employee or editing an existing one, select "Direct Deposit" as the payment method. You will then be prompted to enter their bank's routing number and account number.
How to handle a salaried employee with overtime?
When setting up a salaried employee, you can also specify their overtime pay rate. QuickBooks will automatically calculate their overtime pay if you enter the hours worked over 40 in a week.
How to correct a mistake in a payroll run?
If you've made a mistake, you can void or edit a paycheck. Go to the payroll history, find the incorrect paycheck, and click on the "Void" or "Edit" option. Note that voiding a check after direct deposit has been processed can be more complex.
How to handle deductions for health insurance?
You can set up deductions by navigating to the employee's profile, selecting "Deductions & Contributions", and adding a new deduction type, such as "Health Insurance".
How to print pay stubs in QuickBooks?
After running payroll, you can print pay stubs from the payroll summary page. Alternatively, employees can access their pay stubs through the QuickBooks Workforce portal.
How to find my state tax ID number?
Your state tax ID number is assigned by your state's revenue or labor department. You can typically find it on tax notices or forms you've received from them.
How to change an employee's pay rate?
To change a pay rate, go to the employee's profile, click "Edit employee", and update the pay rate in the "Pay" section.
How to run payroll for contractors?
QuickBooks Payroll also allows you to pay 1099 contractors. You can set them up as vendors and pay them through the "Expenses" or "Vendors" tab, or use a dedicated contractor payment feature.
How to set up QuickBooks Payroll to automatically pay and file taxes?
During the initial setup, QuickBooks will ask you if you want to enable automatic tax payments and filings. If you opt-in, QuickBooks will handle the entire process for you. You can also review and modify these settings in the "Payroll Settings" menu.