Introduction

Processing payroll is a major activity of small businesses with employees. It is important that payroll is processed efficiently, accurately, and productively to provide internal users (owners, managers, and employees) and external users (federal and state tax agencies), timely and reliable payroll information.  

This chapter provides step-by-step guidance for processing payroll.

The chapter guidance is useful to bookkeepers and personnel involved in payroll activities.  The chapter helps bookkeepers process payroll efficiently, accurately, and productively and provides newly hired or cross-trained employees guidance for processing payroll.

Accounting Process Automation

Accounting process automation automates routine payroll processing. Automation improves the speed, accuracy, and reliability of processing payroll.

This chapter uses accounting process automation, when possible, to process payroll efficiently, accurately, and productively with QuickBooks Payroll.

Processing Payroll Tools

The following tools are needed to process payroll:

• QuickBooks,
• QuickBooks time tracking,
• QuickBooks Payroll, and
• QuickBooks Workforce.

Bookkeeper Tasks

Processing payroll tasks include:

1. Review the Payroll Overview page,

2. Review employee time sheets, and

3. Run payroll.

Accountant Tasks

Your accountant’s processing payroll tasks include:

1. Provide processing payroll training,

2. Support processing payroll questions or problems, and

3. Review your payroll.

Review the Payroll Overview Page

Frequency

You should review the Payroll Overview Page the day before you run payroll in case there are things you need to do or know prior to running payroll.

The Payroll Overview page reminds and informs you of payroll tasks and matters to assist you in processing payroll. It also provides Run payroll and Add employee shortcut links.

Note: The Payroll Overview page also reminds and informs you of independent contractor (1099) tasks and matters as well as Pay contractor and Add contactor shortcut links. However, we only address payroll in this chapter.

QuickBooks Payroll also emails the payroll contact upcoming payroll tasks and matters to assist them in processing payroll.

To go to the Payroll Overview page:

1. Select Payroll on the left menu and

2. Select Overview.

Payroll Overview Page

The Payroll Overview page:

1. Reminds you of the number of days until payday,

2. Provides a link to the Paycheck list page as of the last pay date,

3. Provides a Run payroll shortcut link,

4. Provides an Add employee shortcut link,

5. Reminds you of incomplete payroll tasks (To Do List), and

6. Informs you of payroll matters (Discover More).

To Do List

The To Do List reminds you of payroll tasks that may need to be completed.

The To Do List generally includes the following types of tasks:

• Setup,
• Processing,
• Taxes, and
• Forms.

Review Employee Time Sheets

Frequency

How often you review employee time sheets depends on your company’s pay period; weekly, bi-weekly, bi-monthly, etc. However, whatever the pay period, you should review your employees’ time sheets after the payroll cutoff date and before the date payroll is required to be submitted.

Review Steps

1. Verify employees required to submit their time sheets have done so for the payroll period.

2. Verify employees’ total time doesn’t exceed the allowable total hours for the payroll period.

Perform these additional steps for employees who bill or charge their time by client or job:

3. Verify customer, service, and description fields are properly completed.

4. Verify the Billable box has been properly selected.

5. Communicate any questions with the employee and, although you can edit the employee’s time activities, have the employee correct their time.

You can review employees’ time sheets using the Weekly Timesheet or by generating the Time Activities by Employee Detail Report.

Weekly Timesheet

The Weekly Timesheet displays a selected employee’s time detail for a selected week. The Weekly Timesheet displays the following:

1. Employee,

2. Week,

3. Total hours,

4. Customer,

5. Service,

6. Description,

7. Billable, and

8. Time.

You can review and edit the employee’s time activities.

To access the Weekly Timesheet, select the New (+) icon from the left menu and select Weekly Timesheet under Employees.

Time Activities by Employee Detail Report

The Time Activities by Employee Detail Report displays each employee’s time detail for a selected period. The Time Activities by Employee Detail Report displays the following:

1. Employee,

2. Activity Date,

3. Customer,

4. Product/Service,

5. Memo/Description,

6. Rates,

7. Duration,

8. Billable,

9. Amount, and

10. Total time for the period.

You can also customize the report.

To access the Time Activities by Employee Detail Report:

1. Select Reports from the left menu.

2. In the Search bar, enter Time Activities by Employee Detail and select it from the list.

3. Select the Time Activity Date drop-down menu or enter a date range.

Note: You can select an employee’s time activity and drill down to the Time Activity page source document and review and edit the employee’s time activity.

Processing Payroll

Note: The payroll process assumes you’re paying your employees via direct deposit.

Frequency

How often you process (run) payroll depends on the Pay Period you selected when configuring your Payroll Settings. For example, if you selected to pay your employees every other week (bi-weekly), you run your payroll every other week. Payroll should be submitted one to two banking days before the paycheck date. The number of days depends on the QuickBooks Payroll subscription you subscribe to.

Employee Default Hours

When you have employees that work a set schedule each week, you can save time by setting up default hours for them. This allows QuickBooks to automatically fill in their time each pay period. When using this feature, default hours will be highlighted yellow when running payroll. Default hours will be overridden if an employee enters their own hours or if you decide to make changes when running payroll.

To set an employee’s default hours:

1. Select Payroll from the left menu.

2. On the Employees tab, select the employee’s name, then the Pencil icon next to Pay.

3. Scroll down to Step-5: How much do you pay this employee? and enter the default hours per day and number of days per week.

4. Select Done.

Run Payroll Page

The Run Payroll page is where you process your payroll. From the Employees page, select Run payroll to open the page.

The Run Payroll page displays the following:

1. Pay from

2. Pay period

3. Pay date

4. Total Pay

5. Messages

6. Reminders

7. Employee

8. Pay Method

9. Salary

10. Regular Pay Hrs

11. OT Hrs

12. Sick Pay Hrs

13. Vacation Pay Hrs

14. Memo

15. Total Hrs

16. Total Pay

Pay From

Pay from displays the bank account and QuickBooks bank account balance you connected your payroll to in Chapter 3 – Setup Payroll, Step 5 – Connect Your Bank.

Note: You can select the down arrow to select another bank to withdraw your net payroll amount. However, instead of selecting another bank account with the proper payroll funds, we suggest you transfer funds from that account to your payroll connected bank account.

Pay Period

Pay period displays the payroll period you’re running payroll for. You can select the down arrow to select another payroll period, but this is rarely done.

Pay Date

Pay date displays the payroll date.

Total Pay

Total pay displays the total payroll amount for the payroll period after all employee time is entered.

Messages

Messages display any payroll communications from Intuit, the developer of QuickBooks Payroll.

Reminders

Reminders display any payroll To Do reminders.

Employee

The Employee column displays each employee’s name and hourly or salaried pay. The name has a link to the employee’s Information page which displays Pay, Profile, and Employment information.

Pay Method

The Pay Method column displays each employee’s pay method, paper check or direct deposit, you chose when you set up or added the employee. The method has a link to change the method.

Salary

The Salary column displays each salaried employee’s gross pay for the payroll period. The pay has a link to change the pay from Pay regular salary to Adjust salary this time only.

Regular Pay Hrs

The Regular Pay Hrs column displays the hours each hourly employee has entered in the Single Time Activity or Weekly Timesheet to date during the payroll period.

OT Hrs

The OT Hrs column displays the overtime hours each hourly employee has incurred during the payroll period if overtime hours was set up during your payroll setup.

Unfortunately, the Weekly Timesheet doesn’t allow employees to enter overtime hours. Any overtime hours must be manually entered by you.

Sick Pay Hrs

The Sick Pay Hrs column displays the sick pay hours each employee has incurred during the payroll period if sick pay hours was set up during your payroll setup.

Unfortunately, the Weekly Timesheet doesn’t allow employees to enter sick pay hours. Any sick pay hours must be manually entered by you.

Note: To automate sick pay hours into QuickBooks Payroll, consider subscribing to the QuickBooks Time app by QuickBooks.

Vacation Pay Hrs

The Vacation Pay Hrs column displays the vacation pay hours each employee has incurred during the payroll period if vacation pay hours was set up during your payroll setup.

Unfortunately, the Weekly Timesheet doesn’t allow employees to enter vacation pay hours. Any vacation pay hours must be manually entered by you.

Note: To automate vacation pay hours into QuickBooks Payroll, consider subscribing to the QuickBooks Time app by QuickBooks.

Memo

The Memo column displays any memos you entered during the pay period.

Total Hrs

The Total Hrs column displays the accumulative hours incurred: regular pay, overtime pay, sick pay, and vacation pay; for each employee during the payroll period to date.

Total Pay

The Total Pay column displays the total payroll amount for the payroll period after all employee time is entered.

Run Payroll

Once you set up payroll and your employees have entered their time, running payroll is straightforward.

To Run Payroll:

1. Select the New Icon (+) from the left menu, then select Payroll under Employees.

2. Select the checkbox to the left of Employee in the Employee column. This selects all employees listed to be paid. If any employees are not to be paid, deselect the employees’ checkbox.

3. Select Preview payroll in the lower right hand corner to preview a payroll summary.

To preview the Payroll Details Report, select Preview payroll details at the bottom of the page.

Select the Back button if you need to go back to the Run Payroll page.

4. Select Submit payroll. If you’re not ready to submit payroll, select Save for later.

Auto Payroll

Auto Payroll saves time by automatically running payroll for you according to the pay schedule set. This feature can be used for employees that are either salary or hourly with default hours set.

After running your first payroll manually, you can set up the Auto Payroll feature.

To set up on Auto Payroll:

1. Select the Gear icon, then select Payroll Settings.

2. Select the Pencil icon next to Auto Payroll.

3. On the Set up Auto Payroll page, select the checkbox next to each employee you want on auto payroll.

Note: You can view the Auto Payroll and Status columns to determine which employees are enrolled, not enrolled, or ineligible.

4. Select Save changes.

Once turned on, payroll will begin to run automatically each pay period. Prior to payroll being run, the primary payroll contact (configured during Chapter 3: Set Up Payroll) will be emailed a payroll preview summary to review for accuracy. Any employees not on Auto Payroll will still need to be processed manually.  

Void, Delete, and Edit Paychecks

Paychecks can be adjusted as long as they aren’t prior to the current tax period. QuickBooks Online Payroll will automatically create adjustment paychecks and show details of how the corrections impact taxes. Be sure to communicate with your accountant before you void, delete, or edit a paycheck.

To void, delete, or edit paychecks:

1. Select Payroll from the left menu, then select the Employees tab.

2. Select the Paycheck list link to open the Paycheck List report.

3. Locate the paycheck from the list, then open the drop-down arrow from the action column and select Void, Delete, or Edit.

4. Confirm the selection or save and close after making necessary edits.

View Paystubs in QuickBooks Workforce

Employees can use QuickBooks Workforce to view their current and prior paystubs, W-2s, and other pay related information, as well as edit/update their employee profile. This service is included in your QuickBooks Payroll subscription. For your employees to access QuickBooks Workforce, they need to receive an invite from you to login to workforce.intuit.com.  

Your responsibility is to ensure that every employee is invited to this service and that they’re educated on how to navigate and retrieve their paystub and W-2 information.

Invite Employees to QuickBooks Workforce

Note: Only the Primary administrator can invite employees to access QuickBooks Workforce.

To invite employees to QuickBooks Workforce:

1. Select Payroll from the left menu.

2. On the Employees tab, select Invite to Workforce.

3. In the Invite Employees to Workforce pane, select the checkboxes next to the names of the employees you want to invite and input/verify their email addresses.

Employees that have already accepted invitations will show “Invite accepted” under their names.

4. Select Send invitations. This will send the invitation email to each employee selected.

5. Have each employee open the email message from their mailbox and select the link titled Get access for paychecks, which will direct them to QuickBooks Workforce (workforce.intuit.com).

This email link is valid for 30 days from the time it was sent and will expire once used.

6. After they accept the invitation, the employee will then be able to either create a new Intuit user ID or sign in with an existing one.

We have created QuickBooks Workforce instructions you can email employees to view their paystubs, W-2s, and other pay related information using QuickBooks Workforce. See Appendix 5.a – View Paystubs in QuickBooks Workforce.