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.
your employee defaults
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).
Setting up common
payroll items easily
Click Employee Center.
Click the Employees tab, if necessary.
If the employee is already on the list, double-click the employee's name.
If the employee is not yet on the list, click New Employee at the top of the list.
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.
(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
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
(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.
Annual salary: $40,000
Pay periods per year: 26 (biweekly)
Gross salary: $1538.46 ($40,000 divided by 26)
Enter benefits and other adjustments
Enter federal tax information (individual employees)
Enter miscellaneous state or local tax information (individual employees)
Enter sick and vacation time information (individual employees)
Enter state tax information (individual employees)
Enter wage and salary information (individual employees)