QuickBooks Online PAYROLL - Full Tutorial

hi folks in this video we're going to be talking about how to run payroll in quickbooks online so the first thing you need to do is you need to turn on the feature because quickbooks charges an extra fee to have payroll built into quickbooks online you're going to payroll employees workers and then you're going to click on employees the very first screen there should be a button somewhere that says get started start now turn on payroll something like that before you do this if you haven't done this yet i'm going to put my email in the bottom if you shoot me an email i'll actually be able to get you a deeper discount than what they offer by default because because i am a reseller of quickbooks and payroll products anyway if you're buying this on your own or you already bought it that's okay totally fine i want to explain real quick what the three options are or the three versions of payroll so the core payroll is going to be the simplest form they have it will work 100 it's a great product by itself it allows you to have a direct deposit it allows you to set up automatic payroll file your forms file your or pay your taxes all of that stuff the only difference between core and premium just going up on the next level up is a premium is going to give you a same day direct deposit versus next day which is really good when you're kind of running payroll last minute they have an hr support center all sorts of extra resources about you know when to hire someone when to fire someone that sort of thing they have workers comp administration which means once you get workers compensation it varies state by state when an employer is required to have that one they have that they're going to have the ability to make those payments for you or calculate the workers comp amount depending on which workers company you can use in some cases you can pay electronically some cases will calculate it for you especially with the pay as you go options it has expert setup review basically means after you set it up you can have somebody into it check it double check it make sure you set it up correctly and it has access to t-sheets or a program called quickbooks time which basically allows quickbooks to track your time using an iphone you can track your own time you can have the employees track their time using an iphone with a special app and then as a manager you can approve that time before that that gets moved over to the quickbooks core payroll product and then you can process payroll from there tissues is pretty cool it makes it it makes it valuable by itself and then the elite product the most expensive option they have they're gonna have a basically hands-on setup process so you can actually call them have them set up things for you that might be the better choice if you're doing payroll in the middle of the year and you need to bring in what's called the year to date information so if you're moving from a different payroll system into quickbooks online there's a couple of extra steps you got to take to bring in the historical payroll so when you cancel the other service and have quickbooks take over so there's continuity in the numbers and your filings all make sense and you don't get into trouble with the irs or your state so for the people that are going to be doing mid-year conversions i would recommend white glove service at least for a month or two and you can always downgrade to premium or core if you need to just for that particular setup the extra things that you get with the elite is you get t sheets elite or the highest version of quickbooks time that allows you to do job costing through that special app that i talked about and also tax penalty protection which means if you get a tax penalty into a quickbooks will basically be responsible for taking care of that you get other stuff like 24 7 tech support and personal hr advisor honestly i haven't used any of them too so i can't speak to any of those but you're going to pick the one that makes the most sense to you by just clicking on try it now as i mentioned earlier if you shoot me an email i'll i'll give you direct contact that will give you a pretty deep discount on these products particularly with a premium and elite i believe the core cannot be discounted because that's their core lowest price so we're gonna start with the premium one we're gonna click on try now then once you do that you're gonna click on get started and then it's gonna ask you a whole bunch of questions so if you have uh paid employees already where you're doing a conversion from another payroll system into quickbooks this is where you're gonna you're gonna click yes and you're gonna have to enter all your year-to-date information if you click on no it will skip the year-to-date information so if you're a brand new employer you will click on no and then keep going from there we're going to hit yes just so we can see what that looks like then i'm going to click on next then it says when is your next payday basically when is your next payroll run so let's say our next payroll run is going to be february 5th then i click on next then it just asks you to double check the information about the business i'm going to put my address there then my payroll contact next okay then it's going to give you a list of to do which you have to follow step by step so the next one's going to say let's go i'm going to add my team members click on that and then i'm going to add my employees so i'm going to click on the first employee that quickbooks just created for me and then i'm going to start making some corrections on the fly here i'm going to put my employee's email and the reason for the employee's email is so they can get a w-2 or they can get an invitation to log into a portal where they can either do time tracking if you're going to have this t-sheets quickbooks time special application where people can do their own time tracking on the phone and also being able to log into quickbooks workforce which is a place where they can see all of the pay stubs all of the history the w2s all that stuff then the higher date so let's say hector was hired 1 1 20 21 and then we're going to add their w4 information so ever as an employer it's your responsibility to make sure that your employees give you aw4 okay so you're going to download awful you can print to stay from here your employee is going to fill that out and then you're literally going to transcribe whatever's in there into here so we're going to go ahead and put that information i'm going to make up a social security number this is not a real number so okay then i'm going to say that this person is married and then you're going to copy this information from their w4 form if you have no idea what this is definitely call support get an accountant involved you're literally just copying stuff from the w4 it shouldn't be really that complicated down here says um additional exceptions uh quickbooks by default doesn't add exemptions for you if you have a special rule where you have an employee in which is not going to pay a certain tax because maybe they're foreign or they have some special rules you have to call support have them have them set that up for you anyway i went ahead and i filled out all the information that was in the w4 i basically copied what's in my employee's w4 click on done then i'm going to scroll down see what else we got we have how often we pay hector which in this case would be the payment schedule so i'm going to click on create payment schedule right there and i have to create a brand new payment schedule and i can add multiple employees into the schedule so let's say we pay him every other week and the next payday is february 5th but then uh the the pay period which is up to what point we measure time to be able to pay them on the fifth let's say is the previous week so on friday the 30th is actually the last week in which we measure time for the paycheck to be created on february 5th i know you're going to be watching this way in the future after i recorded this video i recorded this in february 2021 that's why i'm using this date of course in your world it would be whatever your next paycheck is and whenever the end of that week or the pay period is in which you're measuring time in order to create the paycheck then i'm gonna click on save and then hector has already his payment schedule then i'm gonna scroll down here and then do his pay so let's say hector gets paid 50 an hour and let's say the default hours per day in this case is eight actually uh we're gonna put here five days a week so that's the default eight hours a day five days a week then we're gonna click on add additional pay types that's if hector qualifies for anything else than hourly so let's say hector also gets overtime and it says here hey how do we measure overtime we're going to put the first day of the week let's say it's a sunday because we work sunday through saturday okay then we're going to have here double overtime assuming that you're in the state where they do overtime or double overtime so for now we'll skip that we'll just have regular overtime pay let's say we also pay paid time off and we also do a vacation so let's say we have both pay time off and vacation and in here you tell it how this is accrued so let's say at the beginning of each year hector earns at the beginning of every year let's say he earns 80 hours of overtime which will give you approximately two weeks um and then we'll do a maximum let's say is 160. so if he goes a whole year without earning without spending his vacation pay he can earn another 80 but he can only have a maximum of of 160. so earn 80 but maximum of 160. the paid vacation type could be i mean the pay time off could be like sick time so maybe this one accumulates per paycheck so we can say look for each pay period let's say for every paycheck which is two weeks hector earns four hours of pay time off and a maximum of let's say 16. so this quickbooks allows you to have vacation pay paid time off sick pay you basically have multiple ways of measuring these things a lot of people have this uh paid time vacation and sick all bundle into one you can do that you have all sorts of options here and how you want it to calculate then i'm also going to add let's say bonus because i also pay hector in a bonus and all this stuff here that you see is only relevant you know during the period in which the special cares act because of the covet pandemic allowed special credits into quickbooks we're going to skip all that because it would be a very long complicated conversation to discuss any of those things but this is just a regular payroll setup nothing to do with covet or cares act or anything like that then we're going to click on done okay then we're going to scroll down see what else we have to set up so right how it says hector's birth date so i'm going to put here 1 1 1978 and then how much did hector get paid so far that was a magic question that asked whether or not hector had payroll for 2021 and therefore we have to enter the year to date so i'm going to click on enter 21 2021 prior and then the you pay hector after january first yes we're going to put that and then we're going to do is we're going to take the very last pay stop the very last pay stop before we convert it into quickbooks and enter the year-to-date information from here so typically that information would come in fact from a pay stub again this is where maybe you might want to get together with an accountant or get together with support to make sure that this gets done correctly because if you screw this one up your w2s will be wrong your end of the year information will be wrong and you will for sure have all sorts of issues with the irs and the state so i'm going to put here 10 000 so let's say i'm literally reading off the pay stub and the year year-to-date payments before we switch to quickbooks is ten thousand for wages let's say the federal income tax withheld is a thousand you're simplifying things social security number social security was 620 and medicare was 145 okay so the net pay option is just for me to do a quick math here to make sure that the math all adds up uh correctly so let me open up the trusty calculator here and do 10 000 minus 1 000 minus 620 minus 145 and uh what you should see is it's an addition of all your net paychecks for the year you want to add them all up and make sure that that number is right so i did it in a calculator you should be doing it with your pay stubs so put 82 35 and just for quickbooks to do a quick check we'll do continue and we'll see that we'll we'll run a pay stub and show you exactly what that looks like so it looks like we're done with the setup i'm going to go ahead and click on done and there's my employee my employee is set up all the initial setup is there so when i click down here on payroll and then click on employees i can click on that and i can see the list of all my employees he set up if i want to make any changes to it all i do is i click on the employee itself and it'll take me back into this setup screen let me close that and i'm going to create one more employee i'm going to go to add employee and i'm going to create a separate employee this time i won't do any uh year to date so we'll put here andrea garcia her emails andrea gmail.com let's also invite them into t-sheets or quickbooks time workforce all that stuff higher date let's say they started working february uh let's see january 15th 2021 so i'll make it a little bit simpler here and then um andreas withholding i'm going to click on the w4 information again i'm going to copy that information from her w4 so put the address here and we're going to put a fake social security number here okay let's say she's single and uh let's say in here she had uh two thousand dollars in the w4 so we're copying that information from the w4 then we click on uh done actually i made a mistake i didn't put her first name correctly so andrea here and then we'll click on done okay then we're gonna scroll down and select her pay period we can put it on hector's pay period or we can add a new one create an entirely different pay period how much we're going to pay andrea let's say she gets paid a salary of a fixed amount per year you can also do it per week or per month let's say that for a year she's 52 000 and then you know how many hours does she work per day how many days per week we can add that i'm also going to click on add uh pay types and let's say she gets paid overtime and same thing and then she gets paid time off and let's say this is per each pay period the same thing so 4 and then 16 and then we'll do vacation let's say that she uh only at the beginning of the year let's change it let's say on on the anniversary date she earns 40 hours and then her maximum she can uh add up is 160. so let's say for example with with andrea particularly over the years she can then earn maybe more vacation depending on your vacation policy again i'm just showing you an example you would have to figure out how this works with your current vacation policy you can also enter the current balance so let's say she's already accumulated eight so you can bring that bikini balance which we didn't do for the first employee and then let's say she also gets a bonus and then we'll click on done okay so her payment setup is it's there so we're gonna scroll down and see and talk about deductions we kind of skip this part with the other employees so we're going to do it here i'm going to click on add deductions and then you get all sorts of options here like garnishment deduction contribution we'll click deduction contribution we'll click on the drop down menu and let's say we're going to have health insurance for her so i'm gonna go health insurance and then the type let's say it's a medical and then the provider is aetna okay or let's say blue cross blue shield whatever the insurance company is and then how much do we take out per pay period so she gets let's say she gets uh taken out twelve thousand dollars a year uh that's too much let's say six hundred dollars a year for the whole year but she gets paid in uh every other week which means that there's 26 payments so let's say the total amount she pays for the year is 600 but we divided by 26 and then every period we take out 23.8 cents that's basically what it is 23.08 and let's say that the that the employer or the the the company pays the balance of that and let's say the balance of that is twelve hundred dollars a year or let's say twelve thousand dollars a year we'll do a more crazier number so twelve thousand dollars a year divided by twenty six it's then 461 54. so their company pays 461.54 so that basically gives you an idea how this works the amount that is taken out of the employee comes in here and that's per pay period so you have to calculate the annualized amount of the monthly amount divided by pay periods and then the portion that the company pays then down here you pick whether it's a taxable insurance premium or pre-tax obviously there's a question you need to ask your accountant that understands your situation i'm going to select pre-tax because it's the most common one then i'm going to click on ok so that's an example of a deduction that you can you can enter there's a couple more i'm going to add deduction here i'm going to do a retirement plan so let's say we're going to do this and let's do a retirement plan and let's say there's a 401k setup and let's say this is fidelity okay and then the amount that we take is a percentage so for example andreas um um wanted five percent of her gross pay to be taken out right and because of her date of birth this will cap it at whatever the irs maximum is which is 90 500 in 2021 and the company let's say they're gonna be matching up to a three percent so that gives you an idea more or less right so the employee yi is putting five percent up to 19500 the employer is putting three percent so they're matching a smaller percentage then we click okay i know we're getting pretty geeky into this stuff and a lot of you guys are not going to be having employees and payroll that is this complex but this is the real world within with dealing with payroll there's all sorts of moving parts okay so here where we choose how andrea gets paid i'm gonna do pay per check because i'm not gonna set up direct deposit here and let's say date of birth is one one nineteen seventy five and how much did i pay andrea so far let's say we haven't so we'll skip that part then i'm gonna click on done and then uh enter now and there we go we have both of our employees uh saved and set up we didn't miss anything let me click done one more time and then they'll finish later on that because you didn't get paid anything uh prior year to date so there's our our two employees if there's something missing here you would have a little exclamation mark i'm gonna click back on that because it's not gonna let me run payroll until i do that so i'm just going to enter the year today it's here i'm going to put no and then click on next and then it won't bother me anymore about that error perfect so we'll click on done there we go we have both of our employees set up so now that our employees are set up we want to take a look at the overall setup of payroll in quickbooks before we run payroll so i'm going to click on the gear menu top right and then i'm going to click on payroll settings that's going to take me into the payroll settings window where i can make all sorts of changes on my payroll so on the general tax i'm going to click on edit and then there's going to be my official company information whether or not i'm a sole proprietor or a 501 c 3 a non-profit then i will click ok so it's just going to take you to different screens federal tax click on edit so it tells me what's my ein number um you know what is my deposit schedule so based on how much you pay your employees and how much you owe the government you might be a semi-weekly depositor monthly depositor or or a quarterly depositor for the time being let's say i know what this is i've asked my accountant whatever i happen to be a monthly depositor i select that and hit okay and this is extremely important because uh there are specific rules around you know when you become a semi weekly or monthly again this is where it's tax and it gets a little bit more complex so we're gonna click on edit here for the florida tax it's asking me hey what is my account number with uh with the state all right so i'm gonna put my account number with the state and let's say my unemployment tax rate is 2.7 and i'm gonna have to go check my original uh documents that i have with the state that told me what my rate is or maybe my other historical payroll information then it says do you want to automate the taxes on forms or not automate it honestly i would always like to automate it get quickbooks to do it automatically for me and also click on later because i want quickbooks to take as long as possible to pay a payer to the last possible minute that is still on time so then we click on save then we got email notifications all sorts of information and whether or not you want quickbooks to share your information with other companies like turbotax so when people are entering the w-2 in turbotax information comes in manually that's a pretty cool thing and then we got the bank account number here which you need to enter in order to get your quickbooks connected so i can pay electronically this whole process in which you have to authorize quickbooks to be your e-filing e-payment agent so you're going to click on that go to that process i'm not going to do it we'll leave it there and then we click undone so that's the overall setup that you'll be doing on your own now let's talk about running payroll by itself so let's run payroll but first we're going to do timesheets so i'm going to go into the gear menu and then i'm going to click on so i'm going to click on the new button here where it says employees i'm going to click on weekly timesheet so i'm going to create a weekly timesheet prior to doing payroll there's a special app called t-sheets or quickbooks time that would allow you to track that so for now i'm going to click on close because i don't want to use a secondary app to track time i'm going to use it all within the quickbooks software itself we'll do a different video talking about that okay so we're going to select here the employee and let's say that the the week that we're gonna put in time in it's for this week right here so we just select the week then we select whether or not there's a customer involved uh that's only if you're gonna be doing uh job costing and if you have quickbooks online plus or advance if you have quickbooks online simple start or essentials you're not going to see any of these things in here okay so this is going to be a regular salary and let's say she worked eight hours six hours seven hours eight hours and nine hours again most salary people we don't track time four but i'm just showing you so you kind of see the dynamic of this thing then i'm gonna click save a new and then i'm gonna switch over to the other employee to hector and i'm going to switch back to the week that i want to track time for and let's say that he worked on this project here and again we're doing a little bit of job costing this video is not going to be focused on that and then let's say on the second time you work two hours in no project and eight hours here so you can assign some to specific customers or projects and some uh not and then i'm gonna click here this is regular pay and regular pay if hector was working saturday over time then what you would do is you would add maybe one hour here and then on a second line we would select overtime and let's say i worked an extra four hours of overtime and you see how that dynamic plays in right i got my hours booked to a particular project i got my regular hours not booked to a project and then i have my overtime pay in it in a line by itself so we'll click on save and close so i should give you an idea more or less of how timesheets work so to run payroll i'm going to click on the new button then click on payroll so after i enter my time i'm ready to actually run the payroll now there's going to be a couple of things here that's going to be keep asking you for your setup to make sure that's all correct so we're going to go through make sure that all the setup is correct all the information is correct this is going to be a a summary of the setup then we're going to click on continue okay and then continue so it looks like now the system is sort of ready to go then we're gonna keep going through the setup make sure that we haven't missed a beat on any of these uh setup pieces and we just have to be able to answer all these questions click on continue okay we have the tax id just making sure the tax id is accurate and all the stuff is correct then we click on continue then again all the numbers all the percentages that we already set up continue and done perfect so the setup is it's made let me go back into new and payroll and the other reason why it kind of took me to that extra step is because we're still in setup mode once you're past setup mode and you're at this screen then you're gonna be able to run your payroll every other friday uh as we have it set up so notice that when we first run the payroll here's my payday which is the next date on the pay cycle when we created it by default we have andrea set up with a salary of two thousand dollars per in this case per uh period and then we have hector who's fifty dollars an hour who's going to be based on all the hours we have set up here so in this screen you can quickly modify any of the hours that you want to for andrea particularly even though we enter time in the timesheet she's always going to default to salaries even though she worked less hours because she's salary it gets defaulted on salary so if you want her to get paid less hours you would have to have converted that set up to hourly and not in an annual salary so that just gives you an idea of what's going on here and let's say that andrea's going to get a bonus for 2 dollars in this particular check just so uh let's do one thousand it'll be easier to to read in this case so we can see it then we're gonna click on preview payroll here in the bottom okay you're gonna get a quick screen that tells you okay this is uh all the net pay so all your employees are going to get this amount in their net paychecks or uh direct deposit this is uh the employee portion of tax this is the employer portion of tax so the sum of the two is my tax liability here's my overall payroll cost my out-of-pocket payroll cost here's a summary of each one if i click on edit in any of these i can actually edit a specific paycheck so i can see exactly what are the inputs coming out of here what are the taxes being calculated automatically this is the federal income tax which is based on their tax table based on the w-4 information that you entered in this particular one there's no state tax so you don't see that but if you're in a state that charges income tax you will see that we got the deductions you see right here the 401k deduction and uh the blue cross blue shield health insurance we got the employer taxes which you can't change but you can actually see exactly how much this employee is costing you on this check for that then we have company paid contributions which is the part of health insurance that the company pays and uh the part of 401k matching so you see all the moving parts here pretty pretty easy and then you see uh all the calculation of pay time off and all that stuff so we're gonna click on done and that's that's pretty pretty obvious there and then we're gonna edit the second employee i'm gonna click here on hector so we can see we have 40 hours of regular rate and then we have four hours of times and a half and then again you can see everything that's going on with any of these also notice that our current check is 2300 but the year to date is 12 300 because we entered earlier that the year to date amount that he's gotten paid before we started payroll is the 10 000. so the year today is going to accumulate correctly hopefully when you set it up correctly then we click on done and that's it that's how you click on the on the paychecks then the next uh step here would be submit payroll and then once i click submit payroll quickbooks will create the checks for you you can you can print the checks if you have direct deposits set up the direct deposit payment will be sent and the tax information or the tax payments will be submitted to the authorities because i don't want to do that because i have a fake company here i'm just going to click on save for later and that would be it but in your case you will be clicking submit payroll and you'll follow the same instructions to print those checks so right now under payroll if i go to employees they don't have a history yet if i click on them they don't have a history yet because it's saved for later is basically waiting for me to uh run that check otherwise you would be able to actually see uh the checks in here you can see a list of checks that were created so the taxes will be paid by intuit by quickbooks because that's how quickbooks online payroll works they take care of the taxes they take care of the filings your job is to do the setup do the timesheets and also process those checks correctly anyway i'm sorry the video wasn't probably as long as you wanted with as many details payroll is a very difficult thing to teach especially because it's a live environment i don't want to make any actual payments to the government or actual reporting to the government so i want to avoid all that stuff uh from happening that's why i'm kind of showing you this example uh like that without actually hitting submit so you can see the last button but trust me it's not gonna be much different and for most people you're going to be using direct deposit so you'll be having the direct deposit experience not so much the check printing experience and then you're going to see intuit will take the money out of your bank account directly and pay all the government agencies that were supposed to be paid anyway i hope you like this video and i'll see you on the next one

Channel: Hector Garcia CPA

Views: 209,331

Keywords: quickbooks, tutorial, online, accountant, bookkeeping, accounting, 2020, quickbooks online, quickbooks tips and tricks, 2021, quickbooks online payroll, quickbooks payroll tutorial, quickbooks payroll setup tutorial, quickbooks payroll taxes

Id: TuZVOeTEx08

Length: 30min 56sec (1856 seconds)

Published: Mon Feb 01 2021