 QuickBooks Desktop 2023. Manual payroll setup. Let's do it within two-its. QuickBooks Desktop 2023. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitars practice file. We started up in a prior presentation going through the setup process we do every time maximizing the homepage to the gray area in the view dropdown. We've got the height icon bar and open windows lists checked off open windows open on the left hand side. Going to the reports dropdown company and financial. Let's open up the profit and loss. The P and L change the range from 010122 to 123122. And then I'm going to customize it and we'll go to the fonts and numbers change in the font up to 12. Okay. Yes. And okay. One more report for the balance sheet reports dropdown company and financial. This time we're going to be looking at the balance sheet standard. I'm going to customize it up top then change the range from 010122 to 123122 and fonts and the numbers to change it to 12. Okay. Yes. And okay. So let's go back to the home page and now we want to focus in our employees in prior presentations. We've been setting up our beginning balances imagining that we had a prior accounting system and then we're moving into the QuickBooks system and we installed or put in place the customers, the vendors, the accounts and the beginning balances. Now we want to think about the payroll process. Note that you want to make sure that you consider the payroll process carefully before you start payroll because payroll is one of those areas where I would use the adage of you would like to measure twice cut once rather than the adage. I'm going to tinker with something until I get it right because tinkering with it can be kind of costly and time consuming with regards to the payroll process. So if you've never had payroll before and you're just turning on the payroll in your QuickBooks system, then the question would be, do you want to run payroll within QuickBooks or do you want to run payroll with a third party provider that's going to be doing some of the payroll processing? If you run it within QuickBooks, then most likely you're going to want to have some level of paid payroll to be running because the paid payroll gives you some double checks to help safeguard against making errors when you're processing the payroll, helps you to do the human resources stuff like give the paycheck stubs and to do the reporting requirements for the quarterly reportings, for example, 941s year end reporting, the 940 and the W2s and the W3s and so on. And it's also getting a better and better at the state stuff as well. However, you might want to work with a third party payroll provider. That's another option that you can use and they can take care of all that kind of stuff, hopefully help out with some of the reporting human resources requirements and so on. Because remember that payroll, if you didn't have the taxes involved would be kind of like a vendor transaction. You would just be paying someone for service that would be done. You'd write them a check, no problem. But because there's all the withholdings and because you're giving those withholdings to the government and they've added the tax filing requirements, it can get quite complex with even a few employees. So there is that. Now if you had a payroll process in the past and you're transferring it into QuickBooks, then usually you would like to be able to make the transfer like at the beginning of the year. So you have a whole year's worth of data of payroll in one place or at least you make the transfer at the end of the quarter if you're doing quarterly filing because there's going to be caps and things that you have to worry about with regards to payroll. So it's not too bad to transfer at the end of the year or to start a new year, but to transfer in the middle of the year gets kind of complex because of the reporting of the pay stubs on a year to date basis for all the employees and so on. So we're just going to turn on the payroll and then we're going to have to of course set up our employees. This is a whole process in and of itself. So we have other courses on just payroll if you want to get into that in more detail, but we're going to be using the manual payroll for the practice problem. So if we go to the edit drop down preferences and edit, we turned on the payroll by going to the payroll settings, which is right here. And then in the company preferences, here's your payroll options. We turned on the manual payroll when we went through the preferences in a prior presentation and that when we turned it on, we saw this arrow then came through down here and we had the pay employees icon, which would not be there if you didn't have any payroll on. Manual payroll is a great tool for the practice problem, but not one you would typically want to use in practice when running live because in a practice problem, it actually forces you to do some of the calculations, which might give you more of an awareness of what is happening, but it's more likely that you can do math errors. No one calculation in payroll is all that complex, but because there's so many of them and because you have reporting requirements, it gets complex just due to the amount of calculations involved. So some support through paying payroll within QuickBooks or by having a third party payroll is quite useful. I'll go through these quickly because we saw them when we went through the preferences, but you got the pay stub and voucher printing. So this is the information that's going to be kind of on the pay stub. Note that from a human resources standpoint, you have to do the withholdings, you have to pay the employees obviously, and you also have to tell them the withholdings that you made, what they had gross, what they took it, what you took out of the paycheck, and what they made net. And then we got the sick and vacation option. So we're not going to change or add any sick and vacation, we're just going to be running the basic payroll. And then you got copy earnings detail from the previous check. I'm keeping the default settings here. Recall quantity field on paychecks. I'm going to keep that as the default. Recall our field on the paycheck for the hourly employees. I'll keep the default job costing and item tracking for paycheck expenses. We'll keep that on as well. And then you got the changing employee name. So you got, you got the first name display employees, Howard, what's going to be the order that the employees will be displayed. And then you got the employee defaults. Mark new employees as sales reps. I'm going to keep that off here. So there we have them. And then these defaults right here would give us the default items that we would be setting up and our pay period. So we've got the schedule. I'm just going to set the default for our pay period. And this should be the default for all employees. And I'll leave everything else until we actually add the employees. So typically we can pay people daily, which isn't too common, weekly, bi-weekly, semi-monthly. These two things are not exactly the same because if you pay people twice a month, there's 12 months, you're going to pay them 24 times. If you pay them bi-weekly every two weeks, if you take 52 weeks in a year divided by two, then you're going to come up with I think 26 payments. So they're not exactly the same monthly or quarterly. Let's do it for us. We're going to do it monthly because that'll work for our practice problem. I'm not going to set anything else on the defaults right now. I'm going to close this out and say, okay, okay. And then we'll add the rest as we enter some employees. So let's just add a couple employees right now. Just note that you're going to have payroll items. And we're going to set up kind of the payroll items, which are in the list area, payroll items right here. And these are going to help us to set up the payroll. So notice some of them are in there by default, the Medicare because that's a flat tax rate, the Social Security, the unemployment. So these can get somewhat complex. This is kind of like the behind the scenes that's helping to process the payroll in a similar way as the lists and item lists for the inventory items are, are, this is the item list for things like inventory items help us to process the forms for the sales and purchases of inventory, for example. All right, let's go back to the homepage. We're going to go into the employee center, which you can do here, or you can go into the employee drop down employee center, and we'll just add a couple employees. I'm going to do that by going to the new up top. And so here are our employees. I'm just going to make up a couple here. We've got Adam Hamilton, Adam Hamilton, which is going to say that's our employee. This is information that you would get from the W4 form, which would look something like this, right? We'd have our employee, we'd have them fill out the W4 form to give us this information so that we can use it to populate the paystubs, pay them properly, have the proper address and the reporting requirements and withholding needs as we enter it into the system. So that's the primary document you would be pulling this stuff from. So five, six, five, six, five, five, five, five, five. I'm going to say is the social security number, male is the gender. And we've got, I'm going to say 09, 05, 79 on the date, marital status, I'm going to say is single. And this is something that we kind of need to know, at least when we get to the withholdings, because that's going to happen, that could have an impact on the withholding citizens. We're going to say, yes, this is a human resources thing. So typically we need to say that they need to be a citizen and American in I'm going to I'll just I'll keep that blank for now. And then we've got the disability, I'm going to say no, and W9 or an I9 I'm going to say yes. And then I'm going to say military. Here's an I9 form by the way, form I9 Employment Eligibility Verification Department of Homeland Security. So again, with payroll, we got some of these items here that aren't really an accounting component, but we're going to have to deal with from, you know, a human resources kind of perspective as well. So it's not going to have possibly an impact on the withholdings, which is going to be our major calculation or our major thought process as we're processing the payroll. But then you've also got to be in compliance with all the all the laws with regards to the payroll. So you as veteran, I'm going to say no. And then the address, let's add the address. I'm just going to make one up here. It's going to be important to have one. This is kind of a required field. You'd get this from the W4 typically, because it needs to be on the paste up generally. And you got to give the address to the government as you're reporting generally. So I'm going to say this drive, I just made this one up and I make them all from Beverly Hills just for the fun of it. California. That's not California. California 90210. So 555-555-5791. It's a fake number. And then none of these are required fields. I'll keep them as is. Let's go to the additional information. So account number. Let's keep that as is. Let's go to the payroll. So this is the key difference between an employee kind of intro screen as opposed to a customer or a vendor. So we've got the payroll. So I'm going to keep that monthly is our default. So notice it's setting up as monthly. That's a key default because you would think all of our employees would be the same. We're not typically going to have one employee on a bi-weekly and another one on monthly. So the default will be monthly. You've got your direct deposit information, tax information, sick stuff, sick pay, and vacation. I'm going to add the items. So if I hit the drop down, we don't have any items set up. These are going to be the types of pay. Typically the items will be like salary and hourly will be the major two kinds of items. We're just going to set up as we go right now. So I'm going to add the I'm just going to type in salary and then tab. It will add the items. So now I'm going to set up the item of salary, set it up, and we go through the little widget here. Do you want to set up a payroll item to track hourly wages, annual salary commissions, or bonuses? We want to do the annual salary. That's what we're going to set it up as. I'm going to say okay. Next is this item for regular, overtime, sick or vacation pay. It's going to be regular pay and then enter the name of the salary item. It's just going to be called salary next and then enter the account for tracking this expense, meaning when I process payroll, what's the expense account that will be hit on the income statement payroll expense? That looks good. And so there is our salary item and then I'm going to say that she earns 55,000. I know that's a year because we're on salary now. So if I open up the trustee calculator and I was to say, okay, 55,000, 55,000 divided by 12, because we're paying monthly would be this much per month, we would expect, right? So there's going to be our item, then direct deposit. We're not going to set that up, but you can look into that if you got the direct deposit. And then the taxes is the other key component here. So we've got the form W for I'm going to say it's form W for for 2020. And say you selected 2000 note the following before hire date of the employee must be on or after January 1, 2020, I'm going to say okay. And so now we've got the filing status, let's say the filing status, the filing statuses are single or married filing separately, married filing jointly head of household or exempt. This is going to have an impact on the withholdings we would typically get this from the W for and then we've got two jobs only. So we'll keep that as unchecked and I'm not going to fill out anything else here and just keep it as it is claim dependence, other income deductions, extra withholding information you get from the W for then we've got the Medicare social security, all of our employees will typically be subject to the federal income federal withholdings of federal income tax, social security and Medicare and the federal unemployment tax. And then we also might have state taxes that would be applicable. We also might have other voluntary withholdings, which would be things like a 401k plan health care and that kind of stuff. And then we've got the state side of things. If there is a state side of things. Now the states will change, of course, depending on where you're located. And so I said we're in California, so we would have state implications, but I'm going to try to keep it off because I want to keep it generic right now and major majorly or mainly have our focus on the federal side of things. So I'm going to say state work is not selected. I'm going to just say continue. And I'm just going to say I'm not going to add anything. I'm just going to try to keep the federal side of things to keep it generic. I'm going to say okay and continue. And then okay. So now we have our one employee, Adam, the other employee is Erica that we need to set up. So I'm going to say new employee. And then let's set up Erica. And this is here, I'm going to say Smith is her last name. And we're going to say that the social security 564574941 female, this is going to be 1231 97. We're going to say that she is married and citizen. Yes, I'm not going to do the ethnicity. I'm going to say disabled. No. And then we got, we got yes and no on the military status address is going to be at 9425 Sunset Boulevard in Beverly Hills, California 90210 5556715174. Let's put some dashes in there. Dash dash. So there's that. Let's go to the additional information. Let's go to the payroll information. So the default is going to be monthly. That looks correct. We're going to set up a new item. Let's make her hourly just for contrast. So I'm going to have to set up a new item because we don't have it set up yet tab set it up. It's going to be an hourly item that looks correct, regular pay looks correct. And it's going to be hourly that looks correct payroll expenses. That's the expense account that's going to be hit looks correct. Finish it up. And so then we're going to say the hourly rage will be, let's say it's $16, $16 for the hourly wage. And then we'll go to the taxes up top, which we would get from the W for we're going to make it to the 2020 or later again, I'm going to say okay. And we have let's put married this time with some information we get from the W for I'm going to keep all this as the default. So two jobs only if there are only two jobs total claim dependence, other income deductions extra subject to Medicare Social Security federal income tax. I'm not going to do anything for the state to try to keep it generic even though I'm in kind of California here continue. And I'm going to say okay and continue. So I'm not going to set up the sick payer or do anything else related to that we'll keep it basically generic and then employee information down below. We've got the higher date let's actually bring this back to January of 2022 we'll just do it at the beginning of the year. Original higher date adjusted service date release date employee type regular versus officer statutory owner this could help you to kind of sort your employees if you have a lot of employees by different categories full time part time seasonal exempt these are all fields they can help you kind of sort and organize your employees total supervisor. So we'll keep that as is I'm going to say okay. And it says do you wish to say no I'm going to say leave as is to keep a generic. Let's edit this one I'm going to right click and edit Adam again. I thought I said did I set him up mail I set and then we'll set this to January so we can process payroll actually we're going to set it up January 2023 I'm working in 2020 I'm working in the future I'm working in the future so we'll do it right here and I'll say okay and then I'll change Erica again so let's edit this one and where's her first name doesn't seem to be showing up print on paycheck why isn't Erica Smith that was weird and employee information let's make this 2023 January let's do that okay okay we might have to do some touch ups but okay I see what's happening here I'm going to double click on her again I put her last name in the middle area and I don't know what oh I have a title I see okay so this is Erica Smith okay so there we have it now I'm going to say okay there it looks good all right now if I go to my payroll lists or payroll items you can see that we've added the items now of the hourly and salary if we had sick pay if we had other other 401k and and so on stuff that we have to withhold we can have more items here so we again we can get into that in a lot more detail we can do whole courses on on payroll and all the different options with regards to payroll but that's what we'll leave it for now and we'll get into more of it when we process the payroll as we get into the next month of data input