Lesson 9: Using QuickBooks for Payroll

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Lesson Objectives

� After studying this lesson, you will be able to:

� Set up QuickBooks to run payroll

� Manage the Employees List

� Create paychecks

� Track and pay payroll liabilities

� Process payroll forms

� Input information from an outside payroll service into

QuickBooks

The Payroll Setup Interview

� The Payroll Setup Interview walks you through the

entire payroll setup process

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Payroll Items

� Anything you wish to include on a paycheck must first

be set up as a payroll item!

� Items for wages/salaries, federal/state/local taxes, other

additions/deductions, employer-paid expenses

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Entering Historical Amounts

� Enter payroll history amounts when using the payroll

feature:

� For existing employees who have received at least one

paycheck from you (and it’s not January 1st)

� A wizard guides you through entering payroll history;

you will need:

� Prior period paychecks

� Prior liability payments

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Payroll Recordkeeping in QuickBooks

� Separate set of records for payroll

� Only transactions entered through the payroll features

affect payroll reporting

� Make sure to NOT:

� Make a payroll liabilities adjustment with a journal entry

� Pay the liabilities with a “regular check” rather than a

liability check

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Employee Setup Through the Payroll Setup Interview

� Gather all W-4 information for each employee

together before you begin:

� Name

� Address

� Social security number

� Birthday

� Federal and state exemption information

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Managing the Employee List

� Integrated part of the Employee Center

Employee List Information about the

employee currently selected

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Setting Employee Defaults

� Information that will appear for each new employee

that you create; edit as necessary

� Set defaults as the most common information

Click the Taxes button to

see a window where you

can set tax defaults

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Making a List Entry Inactive

Tip! List entries that have been used cannot be

deleted . . . but they can be made inactive.

When you right-click a list

entry, you can issue a

command related to it from

the resulting pop-up menu

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The Payroll Center

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Begin a scheduled

payroll

The Payroll Center allows you to easily manage all payroll

activities; it is available when you subscribe to a QuickBooks

payroll service

Creating Paychecks

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The Preview Paycheck window allows you to view the details of

each paycheck before you issue it

Tracking Payroll Liabilities

� Run a Payroll Liability Balances report to view all

funds currently being held in the account

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Paying Payroll Liabilities

� The Pay Scheduled Liabilities section of the Payroll

Center helps you manage and pay your payroll

liabilities

Click in the checkmark column for

any liabilities you wish to pay

Tip! Make sure to use the correct method for paying payroll

liabilities so the Payroll Liabilities account is debited!

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Errors in Payroll

� Be careful to handle payroll errors correctly!

� QuickBooks keeps a “separate set” of books for

payroll, so you deal with errors differently

� You will learn how to:

� Replace lost or damaged paychecks

� Issue an unscheduled payroll check

� Void a regular check and replace with a payroll liabilities check

� Change the date of a payroll check

� Deal with employee over/under payment

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Processing Payroll Forms

� You can produce the required government payroll

forms right from QuickBooks!

� W-2s and W-3s

� 940 and 941 forms

� 1099-MISC and 1096 forms

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The Select Form Type

window lets you

choose which

government payroll

form to produce

Dealing with an Outside Payroll Service

� You will not use QuickBooks’ payroll features (there is

no need for a “separate set” of books in this case)

� Information you need to track:

� Employees

� Payroll Expenses

� Payroll Liabilities

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Tip! If you are using QuickBooks to process your payroll, DO

NOT follow the steps in this section!