{"id":1001197,"date":"2018-07-06T13:19:44","date_gmt":"2018-07-06T17:19:44","guid":{"rendered":"http:\/\/blog.bmcgiverncpa.com\/?p=1001197"},"modified":"2020-01-22T04:04:12","modified_gmt":"2020-01-22T04:04:12","slug":"getting-ready-for-payroll-in-quickbooks-online-2","status":"publish","type":"post","link":"https:\/\/www.bmcgiverncpa.com\/blog\/index.php\/2018\/07\/06\/getting-ready-for-payroll-in-quickbooks-online-2\/","title":{"rendered":"Getting Ready for Payroll in QuickBooks Online"},"content":{"rendered":"

Taking on your company\u2019s payroll with QuickBooks Online? Knowing what you\u2019re up against ahead of time will make your setup tasks much easier.<\/em><\/p>\n

Payroll is probably the most complex element of small business accounting. Not only are you directly responsible to your employees, but you also have to make sure you\u2019re handling everything related to benefits and payroll taxes correctly.<\/p>\n

Whether you\u2019re switching from a manual system to QuickBooks Online, or you\u2019ve just hired your first employee, you\u2019ll soon discover that the site can make your payroll-related tasks much more organized and accurate \u2013 speeding up the process tremendously.<\/p>\n

But before you start getting ready for your first payroll run, you have a lot of setup work to be done. Be sure to leave yourself time before those first paychecks are expected.<\/p>\n

Our Purpose Here<\/strong><\/p>\n

We\u2019ll provide some step-by-step instruction, but initially, we just want you to see what information you\u2019ll need to have available and how QuickBooks Online handles it. This is not meant to be a payroll setup tutorial.<\/p>\n

Building a Backbone<\/strong><\/p>\n

There\u2019s no particular order set in stone for your payroll preparation tasks, although you will need to provide some background information about your company and its policies before you can start creating employee records.<\/p>\n

QuickBooks Online doesn\u2019t walk you through the steps required. It does though display a page with links to all of the data you\u2019ll have to enter. Click the gear icon in the upper right, and then click Payroll Settings<\/strong>. You\u2019ll see this screen:<\/p>\n

\"\"<\/p>\n

QuickBooks Online\u2019s Payroll Settings <\/strong>screen displays links to the pages where you\u2019ll manage your setup tasks.<\/em><\/p>\n

You would have entered information about your Contact Information <\/strong>and Work Locations <\/strong>(under the Business Information <\/strong>heading) when you first signed on to QuickBooks Online. At the same time, you would have been exposed to the Chart of Accounts<\/strong>, which already has accounts designated for payroll. You can see them by clicking Preferences | Accounting<\/strong>, but please do not customize these<\/u>. If modifications are needed, we\u2019ll do them for you.<\/p>\n

Payroll Policies<\/strong><\/p>\n

How often will you pay your employees? Go up to the Payroll <\/strong>heading in the upper left and click on Pay Schedules<\/strong>. Click Create<\/strong> and open the drop-down list next to Pay Period<\/strong> to select the frequency desired. Then enter the date for the first payroll you\u2019ll run in QuickBooks Online and the end date for the period that it covers. Click the box below if you want this to be the default setting for all employees. Then click OK <\/strong>to return to the previous page.<\/p>\n

Open the Vacation and Sick Leave Policies <\/strong>window. If you don\u2019t yet have accrual rules for these paid days off, let us help you here. It\u2019s complicated. When you\u2019re done, click the back arrow to return to the Pay Policies <\/strong>window and select Deductions\/Contributions<\/strong>. Are you offering benefits like health insurance? You\u2019ll need to have your paperwork and information handy before you start completing this section.<\/p>\n

\"\"<\/p>\n

Before you can pay employees, you\u2019ll need to have entered information about the benefits you offer so you can withhold dollars for them.<\/em><\/p>\n

Click the plus sign (+<\/strong>) in front of Add a New Deduction\/Contribution <\/strong>and complete the fields here, then click OK<\/strong>. You\u2019ll assign these deductions to employees on their individual records in QuickBooks Online. If there are any Employee Garnishments <\/strong>needed (like child support), click the down arrow next to Add Garnishment for <\/strong>and select the worker from the list. You\u2019ll provide details for these in the window that opens. This information was most likely provided to you by the agency requesting it. When you\u2019re done, click OK<\/strong>.<\/p>\n

Taxes and More<\/strong><\/p>\n

If you\u2019re new to payroll and have never dealt with payroll taxes before, you\u2019re going to need our help getting this complicated element set up correctly. Even if you have, we\u2019d recommend that you let us work with you. QuickBooks Online does a good job of providing guidance here, but failure to submit payroll taxes (or pay them incorrectly) can lead to penalties and fines \u2013 or worse.<\/p>\n

There are other setup tasks you\u2019ll need to complete, like:<\/p>\n