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How to Set Up Overtime Pay in QuickBooks

When QuickBooks is considered as one of the best accounting software solutions, there is definitely something special that makes it the first choice of business owners. One such special feature that it offers is to set up overtime pay for the employees working with you.

Calculating Overtime Pay in QuickBooks

Maintaining records related to overtime manually is quite complicated. It involves a lot of calculations. However, when you have a software solution like QB to handle everything, you should surely go for it.

As a QuickBooks user, you need to set up an Overtime Pay account for the eligible employees. Whether it is for a salaried staff or a waged one, you can set up both the types conveniently. Once the Overtime Pay in QuickBooks is set up, you just need to run payroll. Enter the hours of overtime in the Overtime section and get the final output instantly.

Set Up Overtime Pay in QuickBooks

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  • Calculating overtime with two different pay rates

Process of Setting up Overtime Pay in QuickBooks

Here are the steps to follow to set up Overtime Pay in QB:

  • Navigate to the Payroll menu
  • Choose employees
  • Click on the respective employee’s name
  • Check the pencil icon beside the Pay option. Click on it
  • You will find Step 4, reading: “How much do you pay [employee]”
  • Under the option, you have a pencil icon again. Click on it
  • Tick the checkbox for Overtime Pay
  • You may also tick the checkbox for Double Overtime Pay if that’s valid for that employee
  • Click Done

The Expected Errors

There are times when the overtime hours do not get calculated or the computation undergoes some issues. As a result, the retrieval of the output becomes difficult. To identify the error and act accordingly, you can follow the below-mentioned steps:

  • Check the settings of the software or app you are using
  • Go to Settings to have a look at the Payroll screen
  • Check the OT settings properly and ensure they are correct
  • Go to Payroll Summary
  • Select Daily hours to generate a report for the required period
  • If the data generated is correct, understand that the issue is of the QB setup that you have. Hence, you need to check the record of the employee in QB. To do so, you can:

a.Open Employee
b.Choose to check the Payroll tab
c.Ensure the Overtime Payroll items are added for the employee
d.You will come across Use Time Data to Create Paychecks option. Ensure it is set as ON

  • If the OT payroll details are not set for the employee, you have to set up the same to make sure QB what wage or salary to pay to the employee on the OT hours.

However, if you get stuck with any of the steps to set up Overtime Pay in QB or find it difficult to identify the error, connect with our QB experts available on livechat and get their assistance instantly.

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