Payroll Processing Chapter 7 Objectives Update your Payroll Tax Tables Create Paychecks and override default calculations Edit Void and Delete Paychecks Pay Payroll Liabilities Adjust Payroll Liabilities Create Payroll Reports Prepare Payroll Tax Forms 941 940 W 2s and reports to help you prepare your State payroll tax returns PAGE REF 223 CHAPTER 7 Payroll Processing SLIDE 2 2 Payroll Processing Checklists Every Payday Verify that your payroll setup is correct Verify that your tax tables are current and update them if necessary Create review and correct if necessary paychecks Print paychecks and pays stubs Every Tax Deposit Due Date Create review and correct if necessary liability payments Print liability payment checks PAGE REF 223 CHAPTER 7 Payroll Processing SLIDE 3 3 Payroll Processing Checklists Contd Every Quarter Verify the accuracy of all payroll transactions for the previous quarter Create payroll reports for the previous quarter and yearto date Create payroll tax returns Federal Form Every January Verify the accuracy of all payroll transactions for the entire previous year Create payroll reports for the previous quarter and yearto date Create payroll tax returns Federal Form 941 940 and State Quarterly and Yearly Returns PAGE REF 223 CHAPTER 7 Payroll Processing SLIDE 4 4 Payroll Tax Table Payroll Tax Tables include the tax rates necessary to calculate an employee s paycheck This calculation affects the amounts of taxes that are withheld from an employee s check e g Federal and State income tax as well as the amounts of taxes the company must pay for the employee e g Federal and State Unemployment tax The Payroll Tax Table also includes data that updates the forms that print directly from QuickBooks e g 940 941 and W 2 PAGE REF 224 CHAPTER 7 Payroll Processing SLIDE 5 5 Updating Payroll Tax Tables Select the Employees menu then select Get Updates and then select Get Payroll Updates If you have a payroll subscription you can connect to the Internet and download the tax tables by clicking Update PAGE REF 224 CHAPTER 7 Payroll Processing SLIDE 6 6 Paying Employees Once the payroll setup is complete and you have downloaded the latest tax tables you are ready to process payroll by using the following Selecting the Employees to Pay Calculating Paychecks for Hourly Employees Calculating Paychecks for Salaried Employees Printing Paychecks Printing Pay stubs PAGE REF 226 CHAPTER 7 Payroll Processing SLIDE 7 7 Selecting the Employees to Pay Select the Employees menu and then select Pay Employees A warning may appear if you have not processed any payroll or entered Year to date information for employees yet this year If you have not installed the payroll update QuickBooks may ask you to update your payroll subscription PAGE REF 226 CHAPTER 7 Payroll Processing SLIDE 8 8 Paycheck for Hourly Employee PAGE REF 229 CHAPTER 7 Payroll Processing SLIDE 9 9 Calculating Paychecks for Hourly Employees If the employee was set up to Use Time Data to Create Paychecks QuickBooks will fill in the earnings section of the paycheck with data entered in the Weekly Timesheet To manually allocate an employee s wages to each of the jobs and classes that they worked on enter a separate line for each combination of Earnings Item Rate Hours Customer Job and Class In the Other Payroll Items section QuickBooks adds the Additions Deductions and Company Contributions as defined in this employee s record If you are doing manual payroll you will need to manually enter the Federal and State taxes in the Employees Summary and Company Summary section PAGE REF 229 CHAPTER 7 Payroll Processing SLIDE 10 10 Calculating Paychecks for Salaried Employees With salaried employees QuickBooks calculates the total gross pay for the period annual rate divided by the number of pay periods and then divides that amount equally into each of the Earnings Items listed in the Earnings Section To track sick and vacation hours used enter the number of hours for each on separate lines in the earnings section QuickBooks pro rates the total salary amount to each line according to the number of hours on that line PAGE REF 234 CHAPTER 7 Payroll Processing SLIDE 11 11 Printing Paychecks Select the File menu select Print Forms and then select Paychecks All the unprinted paychecks show in the Select Paychecks to Print window Select the checks to print and enter the check number in the First Check Number field Select Voucher check style so that QuickBooks can print the pay stub information on the voucher portion of the checks PAGE REF 236 CHAPTER 7 Payroll Processing SLIDE 12 12 Printing Paystubs If you don t use voucher checks or if you don t print checks from QuickBooks you can still print paystubs for your employees on blank paper Select the File menu then select Print Forms and then select Paystubs PAGE REF 239 CHAPTER 7 Payroll Processing SLIDE 13 13 Editing Voiding and Deleting Paychecks If you find errors on paychecks you can edit void or delete the paychecks However be careful when you do any of these actions because changing transactions may adversely affect your records When in doubt ask your accountant PAGE REF 240 CHAPTER 7 Payroll Processing SLIDE 14 14 Editing Paychecks If you haven t printed the paycheck you can edit the paycheck directly in the register From the Employees menu select Edit Void Paychecks Set the from and to dates and then select the paycheck from the list to edit To edit the items on the paycheck click Paycheck Detail PAGE REF 241 CHAPTER 7 Payroll Processing SLIDE 15 15 Replacing Lost or Stolen Checks Find the check in the Checking account register Double click to edit the check Click the To be printed box in the Paycheck window to deselect it Click Save Close and then Yes to save your change Reprint the check and then give it a new check number Enter a new check directly in the Checking account register with the same date payee amount and check number as the lost check coding it to the Miscellaneous Expense account Void the new check you just created This converts the check into a voided check with the same date payee amount and check number as the lost or stolen check PAGE REF 243 CHAPTER 7 Payroll Processing SLIDE 16 16 Voiding Paychecks If you need to void a paycheck make sure it s the most recent paycheck for this employee otherwise QuickBooks would not be able to recreate the check exactly as the original Before you edit or void old paychecks make a backup of your file Select the Employees menu and then