Benefits of Using QuickBooks Online for Payroll
Payroll is essential for most businesses, after all the main goal of a business is to make money, and any employee or contract worker has the same goal. Because of this, it is important to have a simple and reliable system to process your payroll. QuickBooks Online offers a payroll option that is just that and once everything is set up, business life as it concerns payroll is much easier.
SETUP
First Things First
The first process of running payroll through QuickBooks Online is adding your employer information. You will need the bank information (i.e. routing and account number) for the checking account that the payroll checks and payroll tax payments will come from. You will also need to know the wages, salary, bonuses, commissions, tips, or other compensation you provide your employees/contract workers.
What’s Next?
Now you will need the information associated for the employees/Contract workers. For hired employees, you will need to have a W-4 Form completed in order to know how to correctly calculate payroll tax deductions. There may be other deductions such as medical insurance, dental insurance, life insurance, or retirement plans that need to be considered. Also, for employees the date hired is necessary.
Pay Schedule
Normally there will be weekly, bi-weekly, semi-monthly, or monthly payments to employees or contract workers. If necessary, you can set up multiple pay schedules, so if you have various levels of employees or contract workers, you can pay one group weekly and another group bi-weekly.
Sick/Vacation Hours
If you offer sick or vacation pay, the amounts to be earned usually each pay period will need to be entered for each employee.
Direct Deposit
If you are looking to offer your employees direct deposit in addition to or instead of checks. You will need your employees to submit a direct deposit authorization form, this gives you the permission to make the direct deposits in their account along with the account and routing numbers necessary to do so.
Now that we have covered the information that is necessary to have for QuickBooks Payroll, let’s look at the steps to set things up.
- Click on the workers tab which is located on the left menu bar.
- If you have already purchased payroll capabilities with your QBO subscription, then you should see “Get set up “on the next screen, click the button.
- If you are converting to using QuickBooks Payroll from another computerized system, then you will need to answer some question to ensure that your W2 forms are accurate.
- Next begin setting up employees online by selecting Add an employee, you can also switch to contact workers by clicking contractors at the top of the screen, then selecting add a contractor.
- Then complete the employee/contract worker information section for each person. For the employees enter Withholding info, Pay Schedule, Employee Pay, Deductions/Contributions, Pay Method, YTD Payroll Info (if employees have already been paid during the year).
RUNNING PAYROLL
Once you have completed the setup now you are ready to run payroll, here are the steps below.
- Navigate to the workers tab on the left tool bar, select employees, then select Run Payroll.
- Choose the Pay Group you want to run payroll for (i.e. hourly employees, contract workers, or salary employees). If all 3 pay groups are applicable, then the hourly employees and contract workers information will be entered first.
- If this is your first-time running payroll Select the First Day of pay period, Last day of pay period, and Pay date. Then select Process
- Enter the applicable hours under the respective income types, then select Next
- Repeat steps 1-4 to pay the salary employees.
- Always review each employees’ details for accuracy and to make sure everyone is accounted for before submitting. You can see the details on a specific paycheck by selecting View Details.
- Click the box to confirm that you have reviewed all the information, and the payroll is approved and ready to be processed.
- Select Approve.
** To ensure that everyone is getting paid on time, review and approve your employee’s payroll by 12:00 PM EST, at least 3 days before the pay date. **
Arthur Harrison
Tax & Accounting
