 QuickBooks Online 2023. Payroll set up. Get ready to start moving on up with QuickBooks Online. Here we are in our Get Great Guitars practice file. We started up in a prior presentation using the 30-day free trial. We also have the sample company open. If you want both open at the same time, we suggest using the incognito window or another browser. You can get to an incognito window if using Google Chrome's by selecting the three dots in the browser, opening up the new incognito window and then searching for QuickBooks Online Test Drive. We're going to be using the sample company to look at the differences between the accounting view, the view that Get Great Guitars is in, and the business view, the view that the sample company is in. You can toggle back and forth between the two views by going to the cog drop-down and switching the views on down below. 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. In prior presentations, we set up the new company file. We went through our preferences. We took a look at the general ledger. We've added some beginning balances and now we want to go through the setting up of the payroll. Now we have to put our disclaimer. Every time we talk about payroll, that being you have to ask some questions about payroll, payroll being one of those things that you would like to get right the first time. It's not one of those things you want to tinker with until you get it right. There's a lot of things like that, but usually payroll is one of those things that you want to get right the first time, measure twice, cut once. So the primary questions are, do you want to be doing payroll within QuickBooks, or do you want to be doing payroll with a third party payroll provider, the big ones being like an ADP or a paychecks, and you might want to get advised from someone that's not related to QuickBooks or to a third party provider, someone you're not looking to get payroll done from like a CPA firm or your tax preparer, because then you're paying just for the advice. And then once you get the advice, then you can go into the sales reps, which are going to be going to QuickBooks or to say a third party provider. There's pros and cons of either method. If you're a bookkeeper, then you want to think about what works best with your network. If you're trying to scale up like a bookkeeping system, is it best to be scaling up by doing the payroll within the system or possibly getting a third party provider as well as a CPA firm to help as a team to put together the best system that you can scale. If you do payroll within the system, then of course you have to deal with the tracking of the payroll and the reporting that is necessary for employees, the withholdings and everything, which is going to require more reporting forms, and then process the forms, which on the federal side is at least going to be the quarterly 941s, typically 941s, and then you've got the yearly 940, the W-2s, and the W-3s. You're going to need to process basically those returns. So the general flow of payroll, if I just look at the flow chart over here, would be we've got a setup payroll. This is a desktop flow chart, but just to get the idea, what we need to do is turn on payroll, setup payroll. We might then need to gather time if we have hourly employees, which we might be able to do by entering time, or we can just enter the time in some other fashion as we process the paychecks. And then we're going to need to process the paychecks, which might happen typically weekly, bi-weekly, semi-monthly, monthly, depending on the pay structure that we set up. When we process the paychecks, they might be electronic transfers. We're also going to be making withholdings, withholdings for at least mandatory withholdings, which for the federal side of things will include social security, Medicare, and federal income tax. And then we also might have state withholdings and benefits, health insurance, and that kind of stuff, so that the net check goes out and we're going to have to pay taxes based on the employee's information. So that includes social security, Medicare, federal unemployment tax, possibly state taxes like state SDI and whatnot. And then we're going to have to actually pay the liabilities, the withholdings that we made, and the amount of taxes that we owe. And then on a quarterly basis or cycle, we'll have the 941s that we have to report similar to reporting your income taxes on a Form 940, except we have to do it quarterly for payroll instead of at the end of the year. And then we've got the 940 at the end of the year. And then we've got the W2s and the W3s at the end of the year. So that's the general process. So we set up payroll within our QuickBooks to get the free 30-day trial with the payroll so we can play with it. But this is not a payroll specific course. Remember that payroll in and of itself is complex and could warrant a whole course clearly in and of itself. And we do have some courses on payroll if you want to dive into it in more detail. Okay. So if I go into the payroll tab, we've turned it on with a 30-day free trial. We've got the overview page. This is going to help us to walk through the setup process. You've got the Employees tab, lets you add employees. Now we're going to kind of go through the setup process, which will help us to add the employees. But this is where they're kind of located. You've got the contractors. This isn't really employees, contractors are not. Those are the people you might have to issue a 1099 for. You've got the workers comp, which could be somewhat complicated and different per company. So it's one of those rules that aren't the same for all companies. And then you've got your benefits and they've got some interesting resources here to possibly help out with the benefits, things like the health insurance, possibly trying to upsell to some degree to see if you have some availabilities for comparing and contrasting benefits that you might be able to offer. And then you've got your HR advisor tool. And this is kind of a neat tool because obviously payroll is what we think of from the accounting perspective, but payroll and HR laws related to employees are kind of linked together in some way. So we have the actual recording requirements, financial statement reporting, and then the requirements to give information to the employees and so on. So they got this some resources here that you can look into hiring, setting up policies, follow HR laws, manage conflicts and terminating information. So it's kind of interesting information or resources that could be useful here. And then you've got some compliance resources, once again, kind of research and resources for compliance. So let's go back up to the top and let's just go through our welcome process. Welcome to QuickBooks payroll. Let's get acquainted. Just a few quick questions. So let's go. Let's do it then. We're setting it up. So have you paid employees in 2023? Answer yes. If you, your accountant or maybe even a previous owner of your business has paid employees. Now note that it's far easier to have a full year of payroll in one accounting system, as opposed to having half of it like switching in the middle of the year. And that's because there's phase outs with things like social security and the federal unemployment tax. So if you're switching payrolls in the middle of the year, you can do that. But it gets far more complex because all the reporting requirements, right? You got to report the year to date information as well as the current paycheck information. And there's caps on some of the taxes. So we're going to start in January for the whole year. And therefore we're not going to have any prior payments prior to us starting in January. So I'm just going to say no, that would be the preferred layout. So we're thrilled. You're here since it looks like, and if you're thinking about switching payrolls, try to time it so that you can do it, you know, have a whole year in January generally, or at least switch, switch at the end of a quarter or something like that, right? And then it makes it a little bit easier. And so that's that. So we're thrilled. You're here since this looks like this is your first time paying employees in 2023 will help you set up. So let's get that sounds good. Next. So when is your next pay day? So I'm going to say it's going to be on a monthly basis. So I'm going to say we pay it's going to be on the 31st. So pick a date and we'll get we'll get things rolling. Now, obviously, when you pay people will be something that the business needs to choose. Do you pay people weekly? Do you pay them semi monthly? Do you pay them monthly? Do you pay them bi weekly or the general pay periods? We're going to do monthly for the purposes of the practice problem. Let's go to the next one. So what's the primary work location? This is the address, the address for most of your employees work. So where they work. So I'm just going to use the address, which is our company address here that we just made up, which is in Beverly Hills. Just I'm not in Beverly Hills. I just made up Beverly Hills for a millions of dollar house. So that's where we're at. We're at the million dollars location. So who's your payroll contact? So this is going to be the contact information for the payroll information. So I'm going to say that's the one and next. And so obviously someone has to be kind of like responsible for the payroll. How have you run payroll? So so run by eight. So this is a payroll provider. I mean, how did you do it before? This is another payroll provider that sometimes is integrated with other softwares. I so and I think like zero uses gusto and then paychecks is a third party provider spreadsheets, you know, you could do it by by hand. Other I've never run payroll. Let's just go with never. And next, add your first employee. So now we're just going to add the employees here. So I'm just going to make up the employees as I go. I'm going to add an employee and I'm going to say this is Adam Hamilton. And I'm not going to add an email. I don't think it's required. But it says if you add the email, we'll email them and invite to QuickBooks workforce and they can view their pay stubs, W two's and more from there. So would you also like your employee to sell set up in workforce? So they'll enter their personal tax and banking information. So that's probably the easiest way to do it. Because then they can, you know, enter their information, you can email this to them, and then they can enter it from there. And then it'll feed into the system. But of course, we're going to try to enter it here on our end. So I'm going to turn off the employee self set up and then add the employee. Okay, so there we have our information. So now we've got the profile documents and so on. You got the send invitation, send invite for the workforce. Now this send invite for the time they'll track and record hours. So if you're tracking their time and you want them to enter the time into the system on their end, this is a neat feature because you can send them an invitation and they can track the time which you can use. And then you've got the workforce send invitation. And I turned off the self set up so we can set it up on our end. If we were to set it up on our end, we would typically be using a W four form. You can look up the W four form on irs.gov. If you want just to check it out. W four form employees. Here's the PDF form of it. So you can just take a look at it. And so there we have it. So let's make it a little larger. W four form. So a lot of the information that we would pull in for the employee if we were to fill it out, our cells would be populated possibly from the W four form. Okay, so I'm going to close this on this side and then pull this over here. Okay, so let's see if we can edit some of this and add more information date of birth. I'm going to say is January 15 1985. I'm just going to make up another Beverly Hills address for the address. I just looked up a house for sale here. So it's going to be 67 Beverly Park Park CT. And then we're going to say that this is in Beverly Hills, California 90210. And then the social security numbers. I'm going to say that hopefully that'll work. And so I made up a social security number, obviously gender. I'm going to say mail. This is Adam, right? And then the phone number 55545. Let's say something like that. And no extension work number, mobile number will keep it there. So that's the basic information. Let's save that. And then we've got the personal tax withholdings. I'm going to edit the tax withholdings. When did you hire Adam? We'll choose the right form. So there's a different form. If you if it's before 2019, I'm going to say 2020 or later. So we'll say that one. Your federal withholding, you can find the information for this section on Adam's W four, which we looked at here. You could check out if you want to look at the IRS website, you could find it. So section. So single, married, filing separate versus married, filing jointly or head of household. So I'm going to say here that let's say, let's just go single, select. Yes. If Adam has marked this box on their W four. So I'm just going to keep it unchecked claim dependence. So obviously you can, you can look at the boxes box four on here. So I'm going to keep that here. Other adjustments, other income, deductions, extra withholdings. Again, these would be pulled in from the W four. I'm just going to keep them as are for the generic problem here. State withholdings, California state tax. Now I'm going to try to keep it somewhat generic because the state taxes will differ from location from state to state. Obviously if you're talking about the United States, the federal tax will kind of blanket the entire country. So we'll try to focus mainly on the federal tax. You can find the information for this section on Adam's state forum. So single or married. So I'll keep it there withholding allowance. I'm going to keep it a zero and additional amount to withhold. I'm going to keep it as is. And then we might make some adjustments when we actually enter the information into the system to on the payroll to make it kind of a generic problem here. So tax exemptions. So these are not not common. Certain government criteria must be met to take these exempt exemptions. Not sure contact a tax expert or the applicable tax agency. So are they exempt from food, social security and Medicare, California taxes. So I'm going to normally they would not be right, but I'm going to try to make it so that we're just focused on social security, Medicare and social security, Medicare and federal income tax for the withholdings. So I'm going to try to remove a federal unemployment tax, FUTE, which is a federal tax on the employer side of things, because I don't want to dive into that in too much detail for the purposes of our practice problem. And I'm also going to remove the state taxes if I can, because again, I want to make it kind of generic on the federal side of things. So most of the time you wouldn't be exempt for these items, but I'm trying to make it so we're focused on the social security and Medicare, which is applicable basically to everyone in the United States. And then we'll have our portion of the social security and Medicare and not on the state tax or on the FUTE, which is a smaller tax, but it's on the employer side of things. We'll talk about those when we process, but I'm going to try to keep it somewhat generic in that way. Okay, so there we have that payment method. So let's open up the payment method. So I'll say, okay, so we've got the paper check or the direct deposit. So obviously, if you went to the direct deposit, you'd have to enter the detail for making the direct deposit. I'm going to keep it at the paper check for our purposes and say save it. And then we've got the employment details. So let's start that. So we'll say active higher date. Let's just say the beginning of the year from 01, 01, 2023. So we're going to say 2023 and payment schedule. So the payment schedule, I'm going to say let's add a payment schedule. And we're going to say pay period, January. Now hold on, we want to make it, this is where the drop down is. And so I can make it here every week, every other week, twice a month, or every month. So these two get a little confusing when you say, well, let's just go, we're going with every month. I'm going to go with every month. And so then the next payday, I'm going to say is at the end of the month. So I'm going to say it's at January 31st. So to make it nice and easy when the payday is and the end of the next pay period. So next payday Tuesday, end of the next pay period is also January 31st. So the payday, I'm going to make the end of the period and the payday at the same time, not necessarily always the case because you might have a period end. And then you pay them a little bit after the period end, pay schedule name every month. So use this pay schedule for employees you add after this one. So we're going to want to apply the monthly pay schedule to everyone. That's usually the case, whatever you're using, whether it be monthly or weekly or whatever you apply to everyone, usually. So let's go ahead and save that. Okay. And so then we've got work location. That's good job title. I could add here. I'm going to leave that blank employee ID. I'm not going to add what workers comp class, if you're dealing with the workers comp, which again will be specific to location and the actual business itself. So I'm not going to dive into that at this time. So let's go ahead and save that information. And so that looks good for that one payment method. Okay, so let's go to the pay types. And we've got hourly versus salary. So let's go ahead and make Adam a salary. So I'm going to say salary and we're going to say per year 55,000 55,000. So that means if we pay them monthly 55,000 each month divided by 12, it should be the 4583 when we calculated, I believe is the process. And then the set set the default. I'm going to keep their default for this our common pay types. So I'm not going to get into basically over time at this point, which this will be dependent upon usually the rules that you're located in whether you got to pay more for overtime, holiday bonuses, commissions. So I'm not going to dive into those at this point in time. So time off, pay policies. So pay time off, no pay time off policy. So again, these are going to be other kind of policy decisions that will be dependent to some degree on you and the laws that are in your particular location, unpaid time off, sick pay, vacation, pay, additional pay types, allowance, reimbursements, cash tips and so on. We're not going to dive into those. I'm going to go ahead and save that one. And then we've got we've got that lined up. And so let's do the last one, deductions. So any deductions or contributions for Adam deductions may include health insurance. So these would be the the the voluntary deductions as opposed to the withholdings with our mandatory and then you might have garnishments or something like that if they got in a lawsuit or something like that or divorce or something. And they had to have money taken directly out due to a court order. So I'm not going to say anything there. So that looks good. Everything looks set up. Boom, boom, boom. And so I'm going to save that and say done on that one. So there they are. So we have Adam one down. Let's do the next one. I'm going to say next employee. And let's make this one. This one's going to be Erica, I'm going to say, so I'm going to say Erica Smith. And then again, I'm not going to send it email to them or hurt, although that would be a useful way to go. But we're going to try to do it within the system here. So I'm going to say add, we'll go through the same kind of setup process. So now we have Erica, we could set up, we can send her a time sheet, or we can have her self set up, but we're going to do it here manually. So I'm going to go in and say, okay, so we've got email, I'm not going to add an email date of birth. Let's say once again, let's say 01-15-1987 or something. And then street address. So we'll do the address again. So I'm just picking another house here. So I'm going to say this is going to be at the 9425 Sunset Boulevard. And this is going to be Beverly Hills, California. And so 90210 social security number. And hopefully that will work. I'm just made that up. This is going to be female on the gender home phone 555 and something like that. So that looks good. Let's save it. And they changed their picking the one that works for them here on the address. I'm going to say, okay, that works for me. If you want to make that the address, I'm good with that. And so then we'll edit the withholding. So I'm going to go into here. When did Erica? I'm going to use the 2020 instead of the 2019. I'm imagining we hired her in currently. And so I'm going to say the filing status. We'll say she's married this time. All this stuff would come from the W4. I'm going to leave it basically as is. I'm going to try not to add much on the state to try to keep it generic on the federal side of things. And once again, I'm going to try to say she's exempt from FUTA and the state so we can focus on the federal taxes of Social Security Medicare, which is unusual in practice. But it's my attempt to make the practice problem focus on just the federal taxes and not on FUTA. Because that's kind of a little twerky, quirky, smaller tax I don't want to get into because it has limits on it and whatnot. So we'll stay with those. And then we're going to go to the payment method. So I'm just going to say it's going to be a paycheck. So we'll do that just to make it easy. So I don't have to set up the electronic transfers. And then we'll say the employee details. So active hire date, I'm going to say 01, 01, let's say 01-01, 2023. Did I say that on Adam? I think I might have put 2020 on Adam, but it should have been 2020. But anyways, every Beverly Hills, I'm not going to do any job title. We'll keep that as is. And so then I'm going to say that's good employee details. And then the pay type, pay type, we're going to say she's hourly this time. So we can practice an hourly and a salaried one. And we'll say the rate, I'm going to say the wage is going to be 16. Let's say hourly and 16. And so there we have it here, hourly two. So I'm going to keep it at the 16. And then I'm not going to get into the overtime and all of the other pay options down here, we're going to keep it somewhat generic with just the hourly pay. So we can see the process of the payroll being processed. So I'm going to say, okay, save that. And then I'm going to scroll down and say, okay, there's the type and the deductions. We don't have any that's going to be for voluntary items. So I'm not going to add those for our practice problem. So there's just the general setup process. And we've got our two employees now. So there's our two employees. I'm going to say done on that. So now if I go into my overview tab, so I'm going to close this, we've got the overview tab, pay your team with paper checks. So then you can obviously go to this point at the next time when we're going to be paying the employees. We've got our employee tab now, which has our two employees located down below where we can adjust those items down here shouldn't have any real change to the to the contractor because that's what 1099 contractors, not really employees. Once again, you got the workers comp information that you could have to set up or look into, which would be specific for particular company in a location. Again, you've got your business, your, this benefits, which kind of gives you more information, possibly an up sale. And this is just informational stuff, which is useful HR kind of stuff and the compliance. So no impact on the actual income statements at this point. There will be an impact. Of course, the next time we make a payment, which we'll test out and we'll play with once we get to that point in our practice problem. Right now, we just set up to be ready for that point, which we'll do at the end of the first month of data input.