Payroll is a crucial task for any company that has staff. This includes payroll calculations, time tracking, handling deductions, withholding payroll taxes and ensuring employees are paid on time. Doing these things by hand may be tedious and can cause errors that cost you money.

QuickBooks Online Payroll makes payroll easy for businesses by keeping employee records organized, calculating pay and managing payroll taxes. Through proper configuration, regular payroll can be processed more efficiently and payroll costs recorded in the business' accounting records.

This guide will take you through the process of running payroll in QuickBooks Online, from setting up employee information to reviewing reports and finally submitting payroll.

Set Up QuickBooks Online Payroll

Ensure that your QuickBooks Online Payrollsubscription is active and properly set up before you run payroll. If you've never been using payroll before, fill in the initial setup.

Fill in the business information, employer tax information, payroll schedule, and payment preferences. Federal and state tax identification numbers may be required as well as authorization of applicable payment methods.

Carefully check the settings in payroll. A well-set-up QuickBooks system is going to provide the right results for employee wages and also the appropriate payroll tax responsibilities based on your configuration.

Add Employee Information

To add your employees to QuickBooks Online Payroll, the next step is to add your employees to QuickBooks Online Payroll. Go to the Payroll section and click on the Employees area.

Fill in the necessary details for an individual employee, such a

• Full name and contact details

• Information about employment and compensation.

• Wage rate or wage salary

• Federal and state tax withholding information (if applicable),

• Information about payment type and direct deposit details.

• Any benefits, deductions and other pay types that are relevant.

Be sure all information is correct prior to processing payroll. Wrong pay rates or withholding information may impact employee payments and payroll calculations.

If your company has an employee, check their profile and make sure it is updated if there is any outdated data.

Click on Payroll Schedule

When all the employee data is in place, select the payroll schedule. Paying employees weekly, biweekly, semi-monthly, and monthly is all at the discretion of the business and the relevant requirements.

First, click on All apps → Payroll → Employees, and then click on Run payroll. Click on the appropriate pay schedule and then continue if prompted.

Look at the pay period and pay date on the screen. A pay period is defined as time included in the payroll, and a pay date is defined as a day on which employees will be paid.

These dates are useful for double-checking so that payments are not delayed or the right payroll period is processed.

Enter Employee Working Hours & Earnings

Once you choose the payroll schedule, you'll see the list of employees that will be paid in your payroll run. Ensure you have the right people working and that the payroll information is correct.

If you are on an hourly rate, input the regular hours of the pay period. Include overtime/holiday hours if applicable.

For those who are paid a salary, check what they are getting on a regular basis, and adjust as needed. Additionally, you can enter other compensation like bonuses, commissions, or other earnings that are enabled by your payroll configuration.

When using QuickBooks Time, be sure to review approved time data before continuing. Check time sheets and address discrepancies with employee(s) or supervisor(s).

Correct gross pay is dependent upon accurate working hours and earnings.

Check out Payroll Deductions and Taxes

QuickBooks Online Payroll calculates applicable payroll taxes and deductions based on employee information, payroll settings and available subscription features.

Check federal income tax withholding, social security, Medicare, state taxes as applicable and other deductions. Also review benefit payments, retirement deductions and other allowable deductions.

Keep in mind that gross pay is the amount of money an employee is paid before deductions and withholding, while net pay is the amount of money left after the applicable deductions and withholding.

Closely monitor unusual quantities or unexpected changes. While payroll software can help streamline calculations, proper employee data and accurate setup are still crucial.

Preview Payroll Prior to Submission.

To view the summary of the payroll, click on Preview payroll before you submit it.

Review and validate each employee's gross wages, deductions, withholding tax and net pay. Check the pay period, pay date, who is being paid, and how.

Review the bank account or accounting account that is used for payroll transactions, as applicable.

Be sure to check overtime, bonuses, new hires, terminated employees, and pay adjustments for the pay period.

If you discover an error, go back to the paycheck information and fix it before you submit. Spending a few minutes to review the payroll preview can help to avoid paying out incorrectly and unnecessary corrections.

Submit Payroll

Once you have checked all payroll information, click on Submit payroll to submit payroll for processing.

QuickBooks will process the payroll based on configured payment and services. Eligible direct deposit employees may be paid electronically, and paper-check employees may need more printing or distribution.

Follow any on-screen instructions that are left to complete. Please note that the payroll submission and payment process deadlines might differ based on the payment method and service.

After submitting payroll, don't assume that all payments have been processed. Check on the confirmation and payment status to make sure that payroll was paid as planned.

How to Review Pay Stubs and Payroll Reports

Once the payroll data has been submitted, check the payroll records and reports. Depending on your configuration, you will be able to see employee pay stubs, payroll summaries, tax information and other payroll reports.

Provide pay stubs to employees via the means of distribution provided. These records provide clarity to an employee on the amount of money they earn, the deductions they make, and the money they actually take home.

It's also a good idea to check payroll costs in QuickBooks Online accounting to ensure that wages, employer payroll taxes, and other payroll costs are entered correctly.

Frequent reconciliation can assist in finding discrepancies from payroll records and bank transactions.

To Administer Payroll Taxes and keep Records

Automating payroll does not mean the end of payroll tax monitoring. Check tax payments, filing dates and forms based on your business location and payroll service.

Depending on your QuickBooks Online Payroll plan and configuration, you might be able to make and file taxes automatically. Ensure that services are on and that necessary applications are submitted.

Keep up-to-date payroll records, safeguard staff details and audit payroll reports regularly. Having organized records will help answer employee questions and ease tax reporting.

Conclusion

With a routine, running payroll in QuickBooks Online is easier. Payroll accuracy and efficiency can be improved by accurately configuring payroll, keeping employee information up to date, logging working hours, reviewing taxes and deductions, and confirming payroll before it's submitted.

QuickBooks Online Payroll enables businesses to manage employee payroll and link payroll data and records to accounting data. But frequent reviews and compliance testing are still vital.

By following these steps, your business can start to build a solid payroll routine, minimize administrative tasks, and pay employees accurately and on time.