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How to Short Payroll by Departments in QuickBooks Desktop & Online

Short Payroll by Departments in QuickBooks Desktop & Online

Using the ‘Class’ tool is the best way to divide payroll into departments. For each department, you would make a class, which you would then apply to each employee’s payroll profile under the “Payroll Info” tab. Although you could generate sub-reports that split down payroll spending by Department/Class, your regular P & L would still show your payroll expenses as a single, lump sum in one GL account. You can choose from a wide variety of reports, but it all comes down to your preferences for how you want the data to be presented. Any report you choose to utilize will provide the information you need if you simply filter by Class.

The setup you’ve described for a payroll item and associated spending account in the chart of accounts should work in theory because the Profit and Loss report will always display a breakdown by account. I strongly advise speaking with an accountant to find out what it might mean for keeping track of your paycheck amounts, though. Getting these particulars right is crucial for effective bookkeeping, as it is with all aspects of money.

The class tracking feature in QuickBooks Desktop is an additional tool for managing several departments. There are reports, like the Payroll Summary report, where you can add a class filter to view the amounts you require. The class can be assigned to employees or specific payroll items.

Ready to use QuickBooks but lacking the time to go into the technical nitty-gritty? The straightforward explanation you want to rapidly begin managing payroll in QuickBooks Desktop may be found in this article. You can quickly start paying employees if you follow the five easy procedures listed below.

QuickBooks Desktop Payroll Benefits:

Payroll is a laborious chore for many business owners that demands a high level of accuracy. Making your own payroll can quickly become onerous when it comes to keeping up with changes to tax and employment legislation and negotiating governmental regulations.

Fortunately, payroll software can assist you in making sure you pay your employees on time and in the correct amount.

The following are some of the main advantages of payroll software like QuickBooks Desktop Pro:

  •  Automated tax calculations, filing, and payment services for full-service payroll tax preparation
  •  Information about employees, including pay rates and job status, is centralized.
  •  Simple tracking, management, and description of employee benefits
  •  Reminders for your next payday to prevent forgetting to make payments

If you have trouble managing payroll yourself, QuickBooks Desktop Pro might be the solution for you. Numerous payroll procedures are automated by QuickBooks Desktop, which also shields you from paying employees incorrectly and ensures that your company can expand without encountering IRS-related problems.

Continue reading to learn how to rapidly set up your new software and begin managing payroll like a pro if you’re interested in integrating QuickBooks Desktop into your company’s payroll process.

Prior to beginning Payroll Running in QuickBooks

However, for those without any prior experience, setting up payroll with QuickBooks might be somewhat challenging. If you need assistance getting started with QuickBooks payroll setup, look at our fast guide.

In order to conduct your first pay cycle after setting up your company’s payroll, you must perform the following two things:

  •  Enter the working hours of employees.
  •  Open a bank account.
  •  Make certain that every employee has entered their time into QuickBooks before you can process your payroll.

How to process Payroll in QuickBooks?

Once you’ve correctly configured your payroll, banking, and employee time tracking, running QuickBooks Payroll should be simple. To process your payroll and pay your employees, go to the payroll centre before your next pay cycle and follow the instructions below.

  •  Go to the payroll tab in QuickBooks.
  •  Select the kind of payroll to execute.
  •  Put the payroll data in.
  •  Examine and produce pay checks
  •  Verify payroll

Step 1: Open QuickBooks and go to Payroll

  •  To start, click ‘Pay Employees’ under ‘Employees’ in the upper left corner of your screen, then choose ‘Payroll Centre’.
  •  To begin, click “OK, I’m ready!”

Step 2: Select the Payroll Type to Run

Before you begin inputting your payroll information, you must choose whether to perform an unscheduled or planned payroll, as illustrated in the below picture. The screen shown under Step 3 will appear as soon as you start an unplanned payroll.

To a payroll schedule, you must add one or more individual employees. To do this, select the “Employees” tab, which is the one on the very left in the image below. Choose the name of the employee or employees you want to add to a payroll schedule, go to their ‘Payroll Info’ tab, and choose a payroll schedule from the dropdown menu there.

Step 3: Open Payroll Information

Start by entering the pay period end date and check date before entering all of your payroll data. Choose the bank account you want to use to pay your staff (QB will show you the existing account balance). Choose whether you’ll handwrite your checks or print them using QuickBooks.

The most crucial step in inputting payroll information is choosing which employees you want to pay and checking their hours to make sure everything appears correct before moving on. If you’ve assigned each employee to a payroll schedule, you can choose as many as you’d like. When ready, click “Continue.”

Step 4: Examine and draft Paychecks

The information should then be reviewed to ensure that everything appears to be accurate. Under “Payroll Information” on the left-hand side of QuickBooks, you can see how many pay checks will be issued. Additionally, it will add up the gross pay, taxes, deductions, net pay, employer tax contributions, total hours worked, and direct deposit sums for the pay period. Click “Create Pay checks” after carefully reviewing the data.

Step 5: Verify Payroll

Congrats! In QuickBooks Desktop Pro, payroll has now successfully been processed. You can see on this screen how many pay checks have been successfully prepared, how many are available for printing, and how many are available for direct deposit.

How do I use QuickBooks Payroll’s new Coronavirus Features?

Since the COVID-19 outbreak, QuickBooks Desktop now gives employers the option of giving employees paid leave if they’ve been impacted. According to the QuickBooks website, there are a few things that need to be settled before they can grant paid vacation and sick time for the coronavirus, depending on things like the employee benefits you provide and the hourly rates you pay. Before attempting to pay their employees for paid leave and sick time for COVID-19 in QuickBooks Desktop, employers should be sure to review these instructions.

Step 1: Set up Paid Leave items

Start by going to ‘Employees’ at the top left of your screen in QuickBooks Desktop (you can do this from any page in your software). To view or edit the list of payroll items, click it and then click “Manage Payroll Items.”

Step 2: Pick a Paid Leave Item

A screen displaying the various National Paid Leave items in QuickBooks should appear. Double-click the paid leave item you wish to set up, give it a new name, and then click “Next.”

Step 3: Set your taxability to “unmark social security.”

When you reach the “Taxable Compensation” screen, choose “Next.” Once there, click the ‘Default’ button to declare your taxability as unmarked for Employer Social Security. For every National Paid Leave item you create, repeat this step.

How to set up QuickBooks Desktop Payroll?

Payroll features are quite comprehensive in QuickBooks. As a result, proper payroll operations and IRS tax compliance are ensured, but a lengthy setup process results. But do not fret. In 20 easy steps, we’ll show you how to set up your QuickBooks payroll.

There are three requirements you must meet before setting up QuickBooks payroll:

  •  Adequate time
  •  The Correct Paperwork
  •  Key to Your Payroll Service

Make sure you have enough time to properly set up payroll. To give you a rough idea of how much time you will need to set up your payroll, QuickBooks generated the graphic below:

Additionally, you should download the Payroll Setup Checklist for QuickBooks and compile the necessary paperwork. Even though collecting the necessary paperwork and information may take some time, having everything in one place can ultimately save you a ton of time.

An email with a payroll service key should be sent to you when you buy QuickBooks Payroll. If not, get your service key by calling QuickBooks, and then you can start configuring QuickBooks Desktop Payroll.

Now take a seat with plenty of time, all the necessary papers, your service key, and a large cup of coffee. We’re prepared to leave.

  • Enter your EIN
    Make sure your EIN is entered in QuickBooks first. The chances are that you have already done this while configuring your QuickBooks Desktop program, but just in case, go to Company>My Company and then click on the Customer Information page to confirm that your EIN is accurately entered in QuickBooks. When finished, click “OK”.

    (If you don’t have an EIN, you might want to think about getting a company EIN, but you can also input an SSN if that’s how the IRS recognizes your tax files. Consult your accountant or a business expert if you’re uncertain which is best for your company.)
    Make sure your EIN and QB license number are appearing appropriately. Then click “Add” in the bottom left-hand corner.
  • Enter the service key
    Recall the service key we mentioned earlier. Now type that amount and select “Next.” If you’re unclear of your service key, contact QuickBooks payroll support.
    The next step is to confirm that you are adding a payroll subscription to your computer. You’ll be prompted by QuickBooks to say, “Do you want to add your subscription to this machine?” To move forward, respond “Yes.”
    If you want to begin setting up payroll right immediately after downloading the program, choose the “Open Payroll Setup – I want to start right now” option on this page. To download QuickBooks Desktop Payroll, select “Finish.”
    This indicates that payroll has been successfully added and is currently being setup. Wait until QuickBooks has completed installing payroll. It normally just takes a few minutes to complete this process.
    This warning message will appear after QuickBooks Payroll has been set up on your computer. To verify that your software has been updated properly, click “OK” and restart QuickBooks.
    After restarting QuickBooks, go to Employee>Payroll Setup to properly configure your payroll. First, you’ll be questioned about whether your employees have ever gotten paychecks from your company. If the response is no, you’ll also need to decide whether paying people today is necessary.
  • Choose a company setup method
    You will now be prompted by QuickBooks to choose between the “Typical new employer setup” and the “Customer setup” technique. While QuickBooks “automatically provides all the payment kinds and perks frequently needed by new employers” for the typical new setup, the custom setup also includes the option to tailor your benefits.
  • Update Employee INFORMATION
    Now would be a good time to add employees to QuickBooks. In the lower left-hand corner, click “Add New…” to begin. If you have previously added employees to QuickBooks, double check that their tax and contact information is accurate. You can see that QuickBooks displays a caution icon next to employees who lack certain information and a red X next to those whose information is incorrect on the screen below. Selecting the employee and clicking “Edit” at the bottom of the screen will allow you to change or edit the employee’s details.
    You can set up direct deposit here, or you can come back and do it later, if you want to pay your employee through direct deposit. We’ll go into more depth on how to set up direct deposit later in this post, so for now, let’s select “Next.”
  • Enter employee tax information
    Select the state where your employee must pay taxes. Click the blue “Explain” hyperlink for more details if you are ever unclear of the correct tax settings. Answer the question of whether your employee lived or worked outside of your state while still under your employment during the year.
  • Review the employee list
    Until all your workers have been successfully added to QuickBooks, repeat steps 10 through 18. After finishing, look through your list of employees and press “Continue.”
    Next, you have two options: “Create Pay checks and Finish Tax Setup Later” or “Continue to Tax Setup.” The tax setting procedure differs according to the tax liabilities and pay cycle of your company. To complete this section, print the step-by-step tax instructions and follow them. Alternately, you can enter your tax information when you return later. We’ll proceed with creating pay checks for the time being.

    Payroll has finally been set up officially. In the future, you might need to complete entering your tax data, but for the time being, you can be proud that your payroll is already operational. At this point, I strongly advise looking at the Payroll Centre to see everything QuickBooks Payroll can do.

General FAQs

  1. How much does Desktop QuickBooks Payroll cost?

    There are three desktop plans for QuickBooks Payroll, with monthly costs ranging from $50 to $109, plus a $2 per-employee fee.

  2. Does QuickBooks automatically calculate payroll tax?

    QuickBooks Desktop adjusts several flat-rate taxes, including as Social Security, Medicare, Federal Unemployment, State Unemployment, and specified local taxes, to calculate payroll automatically.

  3. Are there positive reviews for QuickBooks payroll?

    The best payroll software for small businesses is QuickBooks Payroll, which consistently receives an average rating of 4.5/5 out of 606 reviews.

  4. How can I create a class-based payroll summary report?

    + Select Employees & Payroll Reports from the QuickBooks Reports drop-down menu. Select Payroll Summary next.
    + On the report button bar, choose Customize Report.
    + Choose Class from the Column drop-down menu.
    + Make any additional alterations to the report. Select OK next.

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