QuickBooks is a well-established accounting software in the market that is known for its efficient and user-friendly manners. Developed by Intuit, the software offers various services and features such as invoicing, paying bills and taxes, and payroll activities. Another one of its features is the QuickBooks Manual Payroll.

When it comes to payroll, it becomes necessary to keep records of paychecks in QuickBooks to run payroll. Generally, paychecks are formed outside the application by ADP or third-party paychecks. Nevertheless, journal entries do help to keep the track of the accounting information for payroll in QB Online. So, if you are not using the payroll service, you can go forth with journal entries. But, the payroll service does come with its perks, such as letting you import paycheck data directly into QuickBooks.

In this article, we will provide you with all the necessary information on how to do manual payroll in QuickBooks.

Points To Keep In Mind

Before we dig further, it is important to keep the following factors in mind.

  • Use tax tables to calculate payroll.
  • Payroll requires details for evaluation. They are as follow-
    • Employees’ details, for instance, name, address, etcetera.
    • Information of the organization. Their name, address, and Federal Tax ID numbers.
    • Payroll Item’s details. This includes the organization’s expenses in accordance with payroll.

How To Manually Enter Payroll In QuickBooks?

If you want to do manual payroll in QuickBooks, then you have to implement some simple steps such as:

  • First of all, open the Edit menu.
  • Then, click on Preferences.
  • Select Payroll and Employees from the drop-down menu.
  • From the Company Preferences tab, select the No Payroll option.
  • Click on Manage Payroll Items from the employee’s menu.
  • After that, click on View/Edit Payroll item list to modify the list.
  • Now, the Payroll item list will appear on the screen.
  • However, if you want an item on the Payroll list, you have to repeat the above steps. And then, click on New to add the Payroll item to the list.

Recording Manual Payroll In QuickBooks Online

Since, if you are recording manual payroll into QuickBooks Online, it will track your payment totals. However, it will not create the data for the employee’s W-2s. In that case, you have to work directly with your payroll service to get your year-end forms.

If you want to record manual payroll in QuickBooks Online, then implement all these steps such as:

Creating Manual Tracking Accounts

  • Firstly, you have to create manual tracking accounts in the Chart of Accounts.
  • Then, select Expense as the account type.
  • After that, choose Liabilities as the type of account.
  • Create additional accounts for taxes specific to your state or locality.

Make Journal Entry And Enter The Payroll Paychecks 

  • First, get your employees’ payroll reports from your payroll service.
  • Now, click on Add New and select Journal Entry.
  • Under the Journal date, type in the paycheck date.
  • For tracking the paycheck number, type the paycheck number in the Journal No. field.
  • If you paid multiple employees for the pay period, then you can combine paycheck totals into one journal entry. 
  • Also, you can create separate journal entries for each employee in order to break out the details.

To Add:

Gross wages:

  • First, you have to choose Payroll Expenses as Wages for the account.
  • Next, fill the amount as a debit.

Net wages:

  • Simply click on the checking account you are paying your employees from.
  • Instead of combining them, type each individual paycheck on separate lines.
  • Enter the amounts in the form of credits.
  • When it is over to enter the debits and credits, then click on the Save option.

The employer’s payroll taxes:

  • Firstly, click on Payroll Expenses as Taxes for the account.
  • Next, enter the amount as a debit.

Taxes paid towards 941 or 944 tax:

  • Select Payroll Liabilities as of Federal Taxes (941/944) for the account.
  • Type the amount as a credit.

State unemployment insurance taxes:

  • Select the Payroll Liabilities as of  [State] SUI/ETT Liability for the account.
  • When it is done, then enter the amount as a credit.

FUDA (Federal Unemployment Taxes):

  • Choose the Payroll Liabilities as Federal Unemployment (940) for the account.
  • Mention the amount as a credit.

State income taxes:

  • Mark the Payroll Liabilities as of the  [State] PIT/SDI for the account.
  • And you have to enter the amount as a credit.

Final Note

As a beginner, it is hard to understand manual payroll in QuickBooks. But, with adequate information and correct guidance, you can grasp the subject. We hope, with the data given in the article, you were able to do so. However, if you have any difficulty, you can contact us through the toll-free number. Our team of experts and ProAdvisors will be happy to help you. You can also get in touch with us for any further queries regarding QuickBooks.

How To Do Manual Payroll In QuickBooks?
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