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Enter wage and salary information

Regardless of how you have set up your employee defaults, you can customize the wage and salary information for each employee. QuickBooks then prefills the information when you write a paycheck for the employee.

The employee defaults are where you enter payroll information that most employees have in common, such as deductions for taxes, health insurance, or union dues. The default setup saves you time, because you enter this information only once. When you are setting up the payroll record for a new employee, QuickBooks automatically fills in the information you entered into the default setup. If you need to, you can customize any of the prefilled information for each employee.

Have you set up payroll items?

QuickBooks uses payroll items to track individual amounts on a paycheck and accumulate year-to-date wage and tax amounts for each employee. There are payroll items for compensation, taxes, other additions and deductions, and employer-paid expenses. You can assign these payroll items to different accounts as needed.

When the payroll feature is turned on, QuickBooks creates payroll items for federal taxes and advance EIC for you. To fully track your payroll, you may need to add more payroll items to the list. For example, you can add payroll items for state withholding, state disability, state unemployment, other state taxes, local taxes; employee deductions of any kind; additions (such as employee loans); commissions; and company-paid expenses (such as company-paid health insurance).

See also

To do this task
  1. Click Employee Center.

  2. Click the Employees tab, if necessary.

  3. If the employee is already on the list, double-click the employee's name.

    or

    If the employee is not yet on the list, click New Employee at the top of the list.

  4. Click the Change tabs drop-down arrow and click Payroll and Compensation Info.

    Go to step 5 if you're setting up an hourly employee or go to step 6 if you're setting up a salaried employee.

  5. (Hourly employees only) In the Earnings section of the Payroll Info tab, enter an hourly wage payroll item for each type of hourly wage the employee receives.

    • Regular wages: Click the name of the payroll item that represents the employee's hourly wage from the Name drop-down list, and enter the employee's hourly rate in the Hourly/Annual Rate column.

    • Overtime wages: If the employee regularly receives overtime, enter an overtime payroll item here. Since the overtime payroll item is a multiplier, QuickBooks populates the payroll item's rate automatically, based on the regular hourly rate directly above it.

      Important: Overtime payroll items must follow the payroll item for the hourly rate on which they are based; otherwise, the overtime rate will not calculate correctly.

      Examples

  6. (Salaried employees only) In the Earnings section, enter a salary payroll item for the employee.

    Click the name of the payroll item from the Name drop-down list and enter the employee's annual salary in the Hourly/Annual Rate column.

    How QuickBooks calculates salary

    To calculate the gross salary for the employee's paycheck, QuickBooks divides the annual salary by the number of pay periods in one year. The gross salary is always the same, no matter how many hours the employee works.

    Example

    • Annual salary: $40,000

    • Pay periods per year: 26 (biweekly)

    • Gross salary: $1538.46 ($40,000 divided by 26)

  7. Click OK.

See also

KB ID# H_PAY_NEWEDIT_EMP_ENTER_WAGE_SALARY
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