QuickBooks Payroll – Part 2 – Adding a New Employee

Posted by on Feb 24, 2011 in Payroll Module | 4 comments

As mentioned from the previous segment, it is now time to set up an Employee.

Working from your Home page click on Employees which will take you to your Employee Centre/Employees tab/New Employee. In the New Employee screen you should see three other tabs: Personal, Address and Contact and Additional Information.

In the Change Tabs: field the drop down box will have three other selections: Personal Info, Payroll and Compensation Info and Employment Info.

In the Personal tab, enter the following information into the fields: Mr./Ms.:  Ms, First Name:  Carol, Last Name:  Walker, Print As:  Carol Walker, SIN: 111 888 111, Gender:  Female, Date of Birth:  01/08/1975.

Next at the Address and Contact tab, enter the following into the fields:  Address:  2121 Ventura Blvd, City: Toronto, Province:  ON, Postal Code: M4Y 2M9, Country:  Canada, Phone:   416 123-4567. There will be six other fields remaining and make sure to add the email address, as it is a another way of contacting people in case they move (think T4’s mailed out and returned).

The Additional Info tab can be used to further identify, for example, job costing. Now  before you save this new employee there is still further information you need to add.

From the drop down window in the Change tabs: field, select Payroll and Compensation Info. Enter the following information into the fields: Earnings:  hourly, Rate:  25.00, Payroll Schedule:  Biweekly (if this is not set up, then <Add New>), Class:  Office Admin, and make sure to mark the  Use time data to create pay cheques box.

In the Additions, Deductions and Company Contributions box, enter in Long Term Disability (if this is not set up, then <Add New>) in the Item Name column, Amount is -6 and Limit is -156. Long Term Disability would be set up as a Payroll Item as a Deduction with None as Tax Tracking, Payable to Health Experts.

To the right of the Additions, Deductions and Company Contributions box are four tabs: Taxes, Accrual Hours, Vacation Pay and Direct Deposit. Let’s start from the top and work down from Taxes.

The Tax Table field will be whatever your province is, in this example it is Ontario. In the Subject to fields, make sure Income Tax, EI and CPP are checked off. Always make sure that the Federal and Provincial TD1 amounts are the correct amounts for that calendar year, or else you will find out that there was not enough tax deducted for all the Employees.

This would then have to be corrected, by the Employees having to pay the additional tax to CRA and they won’t be happy! Click on OK once you are finished with the Tax tab, which will take you back to complete the others.

Accrual Hours can be used to track banked hours for which time off will be granted in lieu of pay. It should be documented in a company policy manual as to how this will be handled, not only for you and the Employees, but for CRA in case you ever get audited. We’re not going to use this tab for now.

Vacation tab is very important, so remember to set this up for all Employees no matter whether you are retaining or paying out their vacation pay during each scheduled pay run.  This is where you can reconcile the available amount, choose whether to retain or pay every period, percentage and the Earnings that accrue vacation.

In this example the screen displays information that had already been processed during the year, thus the amounts seen. A new employee would have zero available and used, when you set him or her up.

Just to cover all of the payroll items that may be applicable, make sure and tag the following: Sick Salary, Vacation Salary, Hourly, Sick Hourly Rate and Vacation Hourly Rate.

I’m not going to cover the Direct Deposit tab because that would need to be set up through Inuit’s Direct Deposit Service. Suffice to say you would then be able to deposit the pay amounts directly into the Employee’s bank account. If you are interested you can click on the Direct Deposit tab and it will guide you through to TelPay.ca and its information. I have used this function before and it works just fine, as long as your employee turnover is low, otherwise it can be labour intensive.

You have one more step before you are finished with the new employee setup.

The final Change tabs: selection is Employment Info and I have seen way too many companies forget to utilize it. This is the area where QuickBooks gathers the important information for the Record of Employment (ROE). You need to make absolutely sure that you fill in the Hire Date when they start, the Release Date when they finish and the ROE code – reason for leaving.

At this point you would click OK to save and proceed to set up as many new employees as needed. If you make a mistake after you have finished, just go back and Edit that Employee.

The next section will cover the area of time tracking through Enter Time.

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4 Responses to “QuickBooks Payroll – Part 2 – Adding a New Employee”

  1. When I try and print an ROE I continuously get the message – “there are no insurable hours available for this employee”.

    How do I correct this issue?

    Thanks

    • Larry Johnson says:

      Hi Rob, this is hard to answer without actually seeing your company file and employee setup, but I’ll give it a try. – First off check to make sure you have not made this employee inactive. Next make sure you have the correct year for the employment. The obvious one would be, did you input the hours when you processed the pay cheque? If you did not, then go back and input all the hours and make sure they are exact for each insurable period, or that employee will have a tough time with any unemployment insurance. Another might be, did you set up two employees with the same name. Final one – did you set this person up as an Employee, or a Vendor by mistake. That’s about all I can think of unless I have more info.

  2. Brenda King says:

    I entered a new employee but when I did a P & L it shows him as other.

    • Larry Johnson says:

      Hi Brenda, sorry but without seeing your company file and figuring out what you’re trying to do, i.e. is it just a PR expense or job costing you are trying to create, it would be hard for me to comment. Also, I would not know what PR Items you used to set this employee up.

      The “other” usually means you have not attached the figure to the account. e.g. If I have a PR expense account and then also have a sub-account to the PR account, and I tag the PR figure to the PR expense account, when it should have been the sub-account, it will show up as “other”.

      PR expense account (main account)
      PR expense account for employer deductions (sub-account to the main account)

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