This is going to be a long series because QuickBooks Payroll is quite sophisticated and must be set up properly.
So one of your early questions was why should you spend the extra money for a monthly subscription? My answer is the same as I told you in an earlier article - saves time, increases accuracy and ensures compliance. What you will need in order to operate Payroll is a Service Key which you can obtain from Intuit Canada.
Once you get this Key you can turn Payroll on from the Preferences menu. You find this in the Menu Bar/Edit/Preferences/Payroll & Employees/Company Preferences.
Under QuickBooks Payroll Features click the button beside Full payroll and edit the information below to suit your needs. Don’t forget to download the latest tax tables through Help/Update QuickBooks.
Next you need to verify that your tax table is up to date before you start. This is found at Employees/My Payroll Service/Tax Table Information. Once you have established that your tax table is for the period of either January through June or July to December of the current year you are working in, then you can begin to set up the Employee information.
You need to stop here and compile everything that you will need before you charge ahead. You will need the following information:
- pay period type and company payroll business number
- type of gross pay – e.g. salary, hourly
- Additions – Group RRSP, car allowance
- Deductions – Group RRSP, health plan
- Expenses – company paid portion of health plan or pension
- Other taxes – health and workers compensation
In addition, you will need all the Employees’ personal information such as date of birth, address, SIN, TD1 amounts and so on.
Just like you did when you were setting up Items in the Customer module, you will need to set some up for Payroll also. QuickBooks has already set up some default Items which you can see by going to List/Payroll Item List. There you will see some of the standard defaults like CPP, EI and Federal Income Tax.
What you don’t see on this screen is the general ledger account that these items are pointing to. In order to understand what QuickBooks is doing with the amounts from these Items, let’s look at one of these items by highlighting CPP Company, right click on the mouse and Edit payroll item.
In the first screen you will see the name CPP Company and then when you click on Next it will take you to the screen that shows the account that is tracking this Liability (Payroll Liabilities) and the agency name. The final screen takes you to the Expense account which tracks the company portion of the CPP. Since we are just viewing this information you can click on Cancel to exit.
I’m going to show you how to set up one Item so that you can do the others. Let’s start with Hourly. Right click your mouse and choose New and the Add new payroll item screen opens. The first button is the Wage type. Just make sure that it is marked before you hit Next. In the Wages screen tag Hourly wages, then Regular pay, and in the Name screen type in Hourly.
The Expense account will be Payroll Expenses and in the ROE Tracking screen accept the defaults. Clicking on the Finish tab will save the item.
If you have a need for more than one Payroll expense or liability to track specific amounts, then contact your QuickBooks Trainer to guide you through this. Setting these up incorrectly can create a nightmare to unravel.
Now you should be ready to set up any additional payroll item types that you require. Once again if you run into problems, then contact your QuickBooks Trainer.
In continuing on, we will next proceed to set up an Employee.
Remember that you can follow me on Twitter @twitter.com/QuikBooksTrainr for tips and updates also.
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