In this webinar presentation, learn the step-by-step instructions on using QuickBooks for payroll processing, from entering time to creating paychecks.

1. Using QuickBooks for
Payroll Processing
Objectives
This webinar will discuss:
• The information needed to begin payroll set-up
• Entering Time
• Creating paychecks
• Paying payroll liabilities
• Processing 1099s in QuickBooks
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2. Processing 1099s in QuickBooks
• Go to Edit, Preferences, Tax: 1099, Company Preferences.
• Set-up the appropriate 1099 category for each applicable account.
• Each vendor that may need to receive a 1099 must be checked as
an eligible vendor under the Additional Info vendor tab.
Using the 1099 Wizard
• May be found in the Vendor drop-down list under Print/e-file 1099s, or
• Under the Tax: 1099 Preference.
• QuickBooks can only create Form 1099-Misc and they must be
printed on preprinted stock.
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3. QuickBooks Payroll
• A subscription service that works inside your QuickBooks
Accounting Software.
• The payroll subscription must be activated to allow payroll
processing in QuickBooks.
• For an annual fee, QuickBooks
• calculates payroll checks and payroll tax liabilities
• provides up-to-date payroll tax withholding amounts
• tracks time for job costing reports.
• There are several payroll service options available.
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4. Preferences for Payroll & Employees
• Go to Edit, Preferences, Payroll & Employees.
• If you wish to track time for Job Costing, or would like to track time
and payroll costs by Department, check the appropriate box under
Company Preferences.
• Time tracking is setup under the Preference Time & Expenses.
Payroll Setup
• QuickBooks will walk you through setting up the basics of payroll
through a series of questions.
• You will need compensation and benefit information, employee’s
W-4 forms, pay rates, deductions, hire dates, state unemployment
contribution rate, and tax id numbers.
• If you are starting mid-year, payroll history information is needed.
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5. Payroll Items
• Work in the background to link the information on the paycheck to
the proper expense and liability accounts.
• Payroll items include salary, wages, bonuses, deductions, benefits,
and taxes.
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6. Employee Defaults
• An employee’s pay rate, deductions, additions, payroll schedule,
and taxes can be entered or edited in the Employee Center.
• If you wish to use time data to create paychecks, be sure the box is
checked in the employee’s Payroll Info screen.
Editing Your Payroll Setup
• Payroll information can be edited as needed.
• Rates can be adjusted through the payroll item list, rather than going
through payroll setup.
• Employee information can be edited in the Employee Center.
• Payroll Updates should be run regularly
• RUN A PAYROLL UPDATE PRIOR TO THE FIRST PAYROLL
OF THE NEW YEAR
• IL Unemployment Tax Rate should be adjusted on January 2.
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7. Entering Time
• Time can be entered using the Weekly Timesheet.
• Multiple jobs, service items, payroll items, and classes may be used
on the same day.
• Time can be entered as a single activity.
• There are several applications that integrate with QuickBooks and
can be used to import time.
• Time can be entered directly in the Preview Paycheck screen.
Creating Paychecks
• Using a payroll schedule, in the Payroll Center go to Start
Scheduled Payroll.
• If you are not using a payroll schedule, from the Employee drop
down list choose Pay Employees, Unscheduled Payroll.
• DATES ARE IMPORTANT!
• Be sure that the Pay Period Ends date and check date are correct.
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8. Using Scheduled Payroll
• Select the employees you wish to pay.
• Choose Open Paycheck Detail to make any changes.
• Review the payroll information.
• Create paychecks.
• Paychecks and stubs may be printed directly from QuickBooks.
• Follow the same steps using Unscheduled Payroll.
Paying Payroll Liabilities
• If paying Scheduled Liabilities, choose the liability you wish to pay,
Click View/Pay.
• Save the check, then call in the EFTPS payment, or use e-pay to
pay the liability.
• If not paying through Scheduled Liabilities, from the Employee drop-
down list choose Payroll Taxes & Liabilities, Create Custom Liability
Payment.
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9. Paying Payroll Liabilities
• Choose the date range of 01/01/12 through the pay date.
DATES ARE IMPORTANT!
• Choose the liabilities to pay.
• Always choose “Review liability check…”
• Choose Create.
• Review, then save and use EFTPS to make the payment.
Making Corrections
• If payroll liabilities are not paid through the payroll liability screen,
they will appear as unpaid in the Payroll Center.
• Verify the payment has been made before adjusting the liability.
• Check to see to what account the payment was applied.
• Pay the liability with a $0 liability check offset to the incorrectly
charged account.
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10. QuickBooks Employee Center
• Employees tab shows transaction history for each employee.
• Transactions tab shows all paychecks, liability checks, liability
adjustments, and non-payroll transactions involving employees.
• Payroll tab shows scheduled payroll related payments and payroll
subscription information.
QuickBooks Payroll Summary Report
• Check for Reasonableness
• Report shows actual payroll amounts
• Do the employer and company medicare contributions match?
• Are the unemployment contributions over the limit?
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11. Payroll Tax Returns in QuickBooks
• If the payroll setup is wrong, the 941 will be wrong.
• Use the payroll summary to check the figures on the 941.
• Summarize the Payroll Data in Excel to complete the IL
Unemployment Tax Return.
• State Wage Listing tab shows excess wages
• Verify the IDES rate
Year-end Payroll Returns
• QuickBooks can be used to create Form 940, W-2s, and W-3.
• W-2s can be printed 3 to a page or 4 to a page for employee
distribution.
• Government copies of W-3 and Copy A of the W-2s can be printed
directly from QuickBooks.
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12. Questions?
Deborah Garrison, CPA
Advanced Certified QuickBooks ProAdvisor
Sikich LLP
1415 W. Diehl Road, Suite 400
Naperville, IL 60563
T: 630.566.8470 F: 630.375.6996
dgarrison@sikich.com
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