Updating Tax Tables
Make a habit of updating your tax tables before running each payroll. It’s the best way to make sure you withhold the correct amounts. QuickBooks needs the most current tax tables to calculate your payroll taxes correctly and generate the correct payroll tax forms. No matter which QuickBooks payroll service you sign up for, being able to download updated tax tables is one of the benefits you receive with your subscription.
Before you run a payroll, download a tax update by choosing Employees→Get Payroll Updates. Click Update to start the download. After the progress bar disappears, you’ll see a confirmation message. Click OK to view the contents of the update.
If you sign up for the Assisted Payroll service, QuickBooks checks whether your tax info is the most current whenever you send payroll data, and downloads the update for you automatically if your tax tables are out-of-date.
How to Run a Payroll
Note: When you use direct-deposit services, you have to run payroll at least two banking days before the actual pay date so the service can process the payroll and transfer money into your employees’ accounts. The transmission date may change due to bank holidays, so be sure to check payroll messages from the bank to see if you need to transmit payroll data earlier than usual. If you pay employees by the hour, this processing period creates a lag in employees’ pay. For example, if you pay employees for the hours they work between the 1st and the 15th of the month, direct deposits wouldn’t appear in their accounts until the 17th at the earliest.
Here’s how to run a payroll:
- Choose Employees→Pay Employees or, on the Home page, click the Pay Employees icon.
The Enter Payroll Information window opens to the first screen, where you set up the pay period and check date, and pick which employees to pay. The Bank Account box is automatically set to the account you choose for payroll in QuickBooks’ preferences.
Employees who are set to inactive status in the Employees List don’t show up in this window, and neither do employees whose release dates are prior to the date in the Pay Period Ends box.
- If the Pay Period Ends date isn’t right, choose the date you want.
Each time you run payroll, QuickBooks changes the date to the next payroll date based on the payroll frequency you set in Employee Defaults. In the Check Date box, choose the date you want on this batch of paychecks.
- To select all your employees (which is the most common choice), click the Check All button above the employee table.
If you pay employees by the hour, you might prefer to select only the employees who worked during that pay period. To select individual employees, click an employee’s checkmark cell to turn it on.
- If you want to see what QuickBooks calculated for each employee’s paycheck, click the Open Paycheck Detail button above the employee table.
The Preview Paycheck dialog box (a real monster, as shown below) starts with the first selected employee’s earnings and payroll items. You can change the values in white cells; gray cells like the ones for year-to-date values aren’t editable.
In this dialog box, the Earnings section shows the gross amount of the employee’s paycheck. For salaried employees, QuickBooks prorates the salary to the length of the pay period. In the Other Payroll Items and Company Summary sections, the program uses the tax tables and your payroll items to calculate deductions or additions. Below the Class box is a list of available sick and vacation time. The Employee Summary section shows the entries you typically see on a pay stub.
- Click Save & Next to view the next paycheck.
Or, click Save & Close to return to the Enter Payroll Information window without reviewing other employees’ records.
- Back in the Enter Payroll Information window, click Continue to move on to creating paychecks.
The “Review and Create Paychecks” window shown below opens. The employee table shows the values for each employee’s paycheck and the total for each category. If you see any numbers that don’t look right, click the Open Paycheck Detail button and repeat step 4 to correct the values.
If you’re filling in payrolls you ran before using QuickBooks’ payroll services, select the “Assign check numbers to handwritten checks” option, as shown here. Then, in the First Check Number box, type the starting check number for that payroll run. For current payroll runs, select the option for how you produce paychecks. (Do the same thing if you hand-write checks.) For employees who have their paychecks deposited directly, click the employee’s Direct Dep. cell (in the right-most column) to turn on its checkmark.
- When everything looks good, in the “Review and Create Paychecks” window, click Create Paychecks.
QuickBooks creates the records for the paychecks, but you still have some printing to do, as the next section explains.
Deleting Duplicate Paychecks
If you get called away to handle a crisis before you print paychecks, you might forget where you were and accidentally create a second batch of paychecks for the same pay period. When you return to printing paychecks, you’ll see the duplicates in the Select Paychecks to Print dialog box. What you won’t see is a way to delete those paychecks.
Getting rid of duplicate paychecks is one of the more obscure procedures in QuickBooks. Here’s what you need to do:
- Choose Reports→Employees & Payroll→“Payroll Transactions by Payee” to run a report of paychecks for every employee.
- In the report window, double-click a duplicate paycheck transaction to open the Paycheck window.
- Press Ctrl+D (or right-click within the window and choose Delete Paycheck from the shortcut menu that appears) to delete that paycheck.
- In the confirmation box that appears, click OK.
You have to repeat this process for each duplicate paycheck. The upside: After all that drudgery, you probably won’t make the mistake of duplicating paychecks ever again.
Printing Paychecks and Pay Stubs
If your employees want paper checks that they can deposit at the bank, you can print the paychecks you just created (which usually come with pay stubs that employees can keep for their records). But if your employees use direct deposit so the money goes straight into their bank accounts, you don’t have to print paychecks. In fact, you shouldn’t or you’ll end up with two QuickBooks transactions deducting money from your payroll account. Still, your employees likely want a record of their pay for the period, so you can print pay stubs instead.
Note: If you’ve signed up for QuickBooks’ direct-deposit service, you still have to create paychecks, but you just don’t print them. After you create the direct-deposit paychecks, you process them by choosing Employees→Send Payroll Data. (If you haven’t signed up for direct deposit, you won’t see this menu entry.) To send the paychecks, click Go Online, and when you’re done, click Close.
Printing paychecks and pay stubs is almost identical to printing expense checks. Here’s the process:
- Load the printer with checks for the account you use for payroll, whether it’s your regular checking account or a separate one.
If you clicked Create Paychecks in the “Review and Create Paychecks” window, you see the “Confirmation and Next Steps” dialog box, which tells you how many paychecks are waiting to be printed and how many are going to be deposited directly, as shown below.
Just above the Next Steps section is a status sentence that tells you how many paychecks you’re printing and direct depositing. If you click the Print Paychecks button, the “Select Paychecks to Print” dialog box opens. Clicking the Print Paystubs button opens the “Select Paystubs to Print” dialog box
- To print paychecks, simply click the Print Paychecks button.
Paycheck forms typically come with detachable pay stubs, so printing paychecks in QuickBooks means printing paychecks and pay stubs. If you want to print pay stubs for direct deposits, click the Print Pay Stubs button. (A pay stub is like a report of the employees’ payroll data that you can distribute.)
Note: If you forgot to load the printer with checks, click Close. You can print the checks or stubs later by choosing File→Print Forms→Paychecks or File→Print Forms→Pay Stubs.
- In the “Select Paychecks to Print” (or “Select Paystubs to Print”) dialog box, QuickBooks selects all the unprinted checks or pay stubs. Make sure that you’re using the correct bank account and check number.
If the account in the Bank Account box is wrong, choose the account you use for payroll from the drop-down list. In the First Check Number box, type the number on the first check in the printer.
The “Select Paychecks to Print” dialog box automatically displays all paychecks waiting to print, both direct deposit and paper. If you process paychecks and direct deposit paychecks in different ways, choose one of the Show options (Paychecks or Direct Deposit) to list only one type at a time.
- If you want to customize what appears on the paychecks, click Preferences.
In the Payroll Printing Preferences dialog box, you can specify whether to print used and available vacation and sick time and—if you’re security conscious—whether to omit all but the last four digits of employees’ Social Security and bank account numbers. Click OK to return to the “Select Paychecks to Print” dialog box.
- When you’re ready to print the paychecks, in the “Select Paychecks to Print” dialog box, click OK.
The Print Checks dialog box opens with the same options you see when you print expense checks. You can choose the style of check to use and how many checks are on the first sheet in the printer. Click Print to begin printing paychecks.
- After QuickBooks prints the paychecks, it opens the Print Checks - Confirmation dialog box. If a problem occurred, click the Reprint cell for each check that didn’t print properly, and then click OK to reprint those checks.
After the checks or stubs are printed, click Close and distribute the checks and pay stubs to your employees. If an employee loses a paycheck and wants you to print a new one, see the box on
Reissuing a Lost Paycheck.
Reissuing a Lost Paycheck
If an employee’s paycheck gets lost, that employee is bound to want a new one. Because payroll checks affect tax returns and payroll liabilities, reissuing a paycheck while keeping payroll info straight requires a few steps. You need to keep your payroll expenses and payroll liabilities intact, and eliminate the duplicate net pay from the original, lost paycheck. Here’s what you have to do:
- First, verify that the paycheck hasn’t cleared at your bank. If it hasn’t, request a stop payment on the check.
- Open your checking account register (in the Chart of Accounts window, double-click the account’s name) and find the lost paycheck. Jot down the original check number.
- Double-click the paycheck to open the Paycheck window.
- In the window’s toolbar, click Print. In the Printed Check Number box, type a new check number (the next one in the sequence for your payroll checks), and then click OK. You’ve now reissued the paycheck with a new check number, but you still have to void the original, lost check.
- Press Ctrl+W to open the Write Checks window.
- Make out the new check to the employee, but use the original check number for the lost check and type the net pay amount from the lost check in the amount field. In the account cell, choose Payroll Expenses.
- Click Save & Close. This step removes the payroll taxes and liabilities from the original paycheck (because they’re now part of the reissued paycheck). This newly created check represents only what you paid to the employee.
- Void the check you just created: Select the check in the register and then choose Edit→Void Check. Voilà! You’ve just removed the amount you paid the employee on the lost check.
If you want to charge the employee for the stop-payment fee, you can add a payroll deduction to the paycheck to reduce the employee’s net pay. If the lost check was the bank’s fault, it’ll reimburse the employee for those fees.
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