© 2006-2008 Computers Etc Software Training Center, Inc. Main Menu QB Payroll Overview Payroll Setup Payroll Schedule Write a Paycheck Pay Payroll Liabilities.

© 2006-2008 Computers Etc Software Training Center, Inc. Main Menu QB Payroll Overview Payroll Setup Payroll Schedule Write a Paycheck Pay Payroll Liabilities Employee Loans Payroll Resources © 2006-2008 Computers Etc Software Training Center, Inc. QuickBooks Payroll NOTE: Press CTRL-A now so your mouse cursor is visible throughout the tutorial.

© 2006-2008 Computers Etc Software Training Center, Inc. Payroll Tracks Federal income tax withholding Social Security rates and limits Medicare rates FUTA (Federal Unemployment Tax) State income tax withholding State unemployment wage limits State disability rates and wage limits Form W-2 (Wage and Tax Statement) Form W-3 (Transmittal of Wage and Tax Statements) Form 940 (Employer’s Annual Federal Unemployment Tax Return) Form 941 (Employer’s Quarterly Federal Tax Return) Form 1099-MISC (Miscellaneous Income)

© 2006-2008 Computers Etc Software Training Center, Inc. Company Information Information You Need to Gather: Name Address EIN (Employer Identification Number issued to employers by IRS) EAN (Employer Account Number from State of California) SUI (State Unemployment Insurance rate) Name of your bank Payroll tax liability payment schedule (monthly or quarterly) Payroll start date (usually the first of the year)

© 2006-2008 Computers Etc Software Training Center, Inc. Employee Information Information You Need to Gather: Name Address Social Security Number Filing status Number of exemptions Hourly Wages/Salaries/Commissions Deductions/additions to paycheck Direct deposit information (bank account and routing number) NOTE: Some of this information will be found on the employee’s W4 form (Employee’s Withholding Allowance Certificate).

© 2006-2008 Computers Etc Software Training Center, Inc. Company Benefits Information You Need to Gather: Insurance plans (health/dental/vision) you offer Retirement plans (IRAs/401(k)s) you offer Vendor names Account numbers Amount/percentages of benefits Annual limits if any Method of calculating benefits

© 2006-2008 Computers Etc Software Training Center, Inc. Getting Help Accountant: If your accountant is familiar with QuickBooks, consider paying him/her to set up payroll for you. Intuit: Intuit, the maker of QuickBooks, offers free “call back” technical support for all payroll users, provided you own QuickBooks 2007 or newer. Vendors: It may be necessary to contact your insurance company or the administrator of your retirement plan to clarify specific information about the payroll items you are setting up. Ideally, you should set up payroll with your accountant by your side. This way you can clarify important issues as they arise. At the very least, have your accountant double-check your work to see if things were set up correctly.

© 2006-2008 Computers Etc Software Training Center, Inc. Payroll Resources Videos:Payroll OverviewPayroll Overview Paying Employees Paying Liabilities PDF Files:Advanced QuickBooks HandoutAdvanced QuickBooks Handout Internet: IRS www.irs.govwww.irs.gov IRS – California www.irs.gov/cawww.irs.gov/ca Employment www.edd.ca.gov Development Departmentwww.edd.ca.gov QuickBooks www.intuit.comwww.intuit.com www.quickbooksgroups.com www.payroll.com

© 2006-2008 Computers Etc Software Training Center, Inc. There are three payroll plans to choose from. To compare them: 1. Click the Employees menu 2. Point to Process Payroll 3. Click Learn About Payroll Options

© 2006-2008 Computers Etc Software Training Center, Inc. The three payroll plans are: Standard, Enhanced, and Assisted Payroll. Click the Compare Products link below to view prices and features of each plan.

© 2006-2008 Computers Etc Software Training Center, Inc. After deciding on a payroll plan, click the Close button Here you can compare payroll plans and decide which one is right for you: Standard, Enhanced, or Assisted Payroll.

© 2006-2008 Computers Etc Software Training Center, Inc. Now that you’ve seen an overview of the payroll process and have selected a payroll plan, you’re ready to sign up for QuickBooks Payroll. 1. Click the Home button in the upper left

© 2006-2008 Computers Etc Software Training Center, Inc. To sign up for a payroll service: 1.Click the Employees menu 2.Point to Process Payroll 3.Click Learn About Payroll Options or Order Payroll Service

© 2006-2008 Computers Etc Software Training Center, Inc. The Payroll Setup Wizard will guide you through the setup process. It can answer most of your questions. In some cases, however, it may be necessary to contact your accountant, the IRS, or EDD for specific tax-related answers. Ideally, your accountant will be present when you setup payroll. At the very least, you should have your accountant review your company file to see if everything is set up correctly. Click the link below to see what information you’ll need for the payroll setup process.

Click the CLOSE button.

© 2006-2008 Computers Etc Software Training Center, Inc. If you pay sales commissions, tell QuickBooks if they’re based on a percentage or dollar amount. In this example we chose a percentage. Click the NEXT button when finished.

© 2006-2008 Computers Etc Software Training Center, Inc. Once you have created payroll items you may need to edit them. For example, we want to set a default commission rate. Click the EDIT button, and indicate the default percentage rate.

© 2006-2008 Computers Etc Software Training Center, Inc. Here we specified the commission rate as 10%. This means all new salespersons will earn 10%; however, we can change that for each employee. Click the FINISH button.

© 2006-2008 Computers Etc Software Training Center, Inc. In this example the employee and the company share the health insurance expense and the employee’s share is deducted before taxes. Check with the IRS, your accountant, your payroll service, or your health plan provider to determine the tax status. Click the NEXT button.

© 2006-2008 Computers Etc Software Training Center, Inc. In this example, (as with the health plan), the employee and the company share the dental insurance expense and the employee’s share is deducted before taxes. Check the dental plan to determine tax status. Click the NEXT button

© 2006-2008 Computers Etc Software Training Center, Inc. In this example, the employee and the company share the vision care insurance expense and the employee’s share is deducted before taxes. If necessary, check with your accountant or the vision plan provider on the tax issue. Click the FINISH button.

© 2006-2008 Computers Etc Software Training Center, Inc. Now you’ll need to edit these items one-by one. You must add the vendor name and account number for each payroll item. You’ll also need to indicate if the items are taxable, how the benefits are calculated (percentage or flat amount), whether or not there are annual limits, etc. As an example, we’ll edit the Dental Insurance (company-paid) item. Click EDIT button

© 2006-2008 Computers Etc Software Training Center, Inc. Fill in the Payee (Vendor) name and account number. The Account Name and Type is correct for most situations. Only change these settings if your accountant tells you to. Click the NEXT button.

© 2006-2008 Computers Etc Software Training Center, Inc. If the item is not subject to tax, select NONE. If taxes apply, select the desired Tax Tracking option from the drop-down list. If the item is subject to some taxes but not others, select the CUSTOMIZE TAX SETTINGS option. Click CUSTOMIZE TAX SETTINGS option.

© 2006-2008 Computers Etc Software Training Center, Inc. Indicate which taxes – if any – apply. If you’re unsure, you should consult with your accountant about the tax status of this item. In this example the item isn’t taxable. Click the NEXT button

© 2006-2008 Computers Etc Software Training Center, Inc. In this example, we chose a flat rate of $25 per paycheck and an annual limit of $600, which resets to $0 on January 1st. Check with your payroll expert to clarify these sorts of details before attempting to set up any item. Click FINISH button.

© 2006-2008 Computers Etc Software Training Center, Inc. You’ll need to edit the other items in this list and provide similar information concerning vendors, account numbers, tax status, how amounts are calculated, annual limits, etc. When you’re finished, click the CONTINUE button.

© 2006-2008 Computers Etc Software Training Center, Inc. As with the other benefits, these items need to be edited to indicate vendor names, account numbers, methods of calculating the benefit, annual limits (if any), etc. As an example, we will edit the 401k Co. Match item. Click EDIT button.

© 2006-2008 Computers Etc Software Training Center, Inc. The previous example was for a 401(k). This example is for a SIMPLE IRA. Here, the company contributes up to 3%, with an annual limit of $1500. Click the FINISH button.

© 2006-2008 Computers Etc Software Training Center, Inc. For the moment, the Hourly Sick and Vacation Rates should not require editing. Later, we will indicate the hours for each individual employee. Click the CONTINUE button.

© 2006-2008 Computers Etc Software Training Center, Inc. Check with your accountant or the IRS to determine if this payroll item is taxable. If so, click Customize Tax Settings option shown above. Click the CUSTOMIZE TAX SETTINGS OPTION

© 2006-2008 Computers Etc Software Training Center, Inc. We set the default rate as $100.00. This amount will be deducted from each paycheck. We will set a Permanent Limit of $1,000. Click the FINISH button.

© 2006-2008 Computers Etc Software Training Center, Inc. Specify how vacation pay is calculated, if there is an annual limit, and current balances. Click the NEXT button. Fill in the required information.

© 2006-2008 Computers Etc Software Training Center, Inc. Now we need to edit Jane Stewart records to show exactly what we paid her, the IRS, EDD, and the various other vendors (dental, health, IRA, etc.). Click the EDIT button.

© 2006-2008 Computers Etc Software Training Center, Inc. Select the employee to pay. Make sure you have the right checking account selected, and that the Check Date and Pay Period End Date are correct. When you’re ready to continue click the Create button.

© 2006-2008 Computers Etc Software Training Center, Inc. If you use the Time Tracking feature, some or all of your employee’s hours will automatically fill in for you. It may be necessary to fill in the balance of hours worked with a generic payroll item. If you don’t use Time Tracking, you’ll need to manually enter the hours worked. Commissions, Bonuses, and other payroll items must be added manually. If you pay commissions, run a Sales by Sales Rep Summary report before writing the payroll check. You’ll need to enter the amount you see in the report in the Quantity column shown above (10,000) in order for QuickBooks to calculate the correct commission.

© 2006-2008 Computers Etc Software Training Center, Inc. Employee Loans Setup an “Other Current Asset” type account named Employee Loans to track the loan (this is described later) When you make the loan to the employee, write a regular check (not a payroll check) and use the Employee Loans account on the Expenses tab If the employee repays the loan using cash or personal checks, record the loans along with other deposits but make sure to name the Employee Loan account in the deposit (this way the loan balance will be reduced) If the employee repays the loan through payroll, create a Deduction Item that connects to Employee Loan

© 2006-2008 Computers Etc Software Training Center, Inc. Setup a Deduction type payroll item called “Employee Loan Repayment” which is linked to Employee Loan account (mentioned earlier). Click NEXT button.

© 2006-2008 Computers Etc Software Training Center, Inc. Link the “Employee Loan Repayment” Payroll Deduction Item to the “Employee Loan” Other Current Asset account you created earlier. Click NEXT button.

© 2006-2008 Computers Etc Software Training Center, Inc. Include the “Employee Loan Repayment” item in the Additions, Deductions and Company Contributions section for the employee. Enter the amount or percentage to be deducted from each paycheck and the limit. QuickBooks will stop deducting once the limit is reached (this is for the calendar year. On January 1 st QuickBooks “forgets” payments made in the previous year so you’ll need to change the limit to take into account payments made in the previous calendar year).

© 2006-2008 Computers Etc Software Training Center, Inc. Final Steps Make certain all payroll items have been edited. Have your accountant double- check payroll setup. Study Advanced QuickBooks handout for more information on timesheets, sales commissions, writing payroll checks, paying liabilities, and processing payroll forms.

© 2006-2008 Computers Etc Software Training Center, Inc. Main Menu QB Payroll Overview Payroll Setup Payroll Schedule Write a Paycheck Pay Payroll Liabilities.

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© 2006-2008 Computers Etc Software Training Center, Inc. Main Menu QB Payroll Overview Payroll Setup Payroll Schedule Write a Paycheck Pay Payroll Liabilities.

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