Credit: Tripp
QuickBooks desktop edition has powerful tools to manage your payroll. Many small and mid-sized businesses use QuickBooks to manage their employees and contractors payments and accounting.
Employee
After a quick setup process, paying employees and filing taxes using Quickbooks is easy. To setup a new employee, you just need to add this information:
- Name and address information
- Social security number
- Pay rate
To ensure you are in compliance with all state and federal laws, make sure to get W-4 and I-9 information as well to ensure your employee taxes are paid correctly and that they are a legal United States worker. If you live outside of the United States, QuickBooks can still be used, as it has other tax tables and forms.
Here is a great video on setting up new employees for payroll.
Contractor
Paying contractors is even easier than employees. To pay a contractor, you just set the company or person up as a “vendor” and use QuickBooks to print a check.
When you print the check, make sure to choose the correct expense category so your reporting is accurate when tax time comes around.
Paying Employees on Demand
When I was the treasurer of a non-profit, we had one employee that had to be paid. Because it was only one employee, it was easiest for me to just create a new paycheck and define the pay period manually for each check.
With a very small business, that is the easiest way to handle payments. When you are ready to pay your employee, just enter their hours (you can setup several rates depending on your needs) and save and print the check.
When you are getting ready to enter payments, it can be a good idea to refresh your tax tables, which only takes one click. That way, Quickbooks will handle the deductions and taxes correctly.
Paying Employees on a Regular Schedule
If you have multiple employees that are all paid either a salary or hourly on a regular schedule, such as weekly, bi-weekly, or monthly, you are best off using a payroll schedule.
Payroll schedules allow you to pay all of your employees at once from one screen. Just enter all of your employees time and save all of the transactions and send to the printer. It only takes a couple of quick steps.
Hourly vs. Salary
Paying hourly employees is simple with the Quickbooks system, as it was built to make payroll easy. In fact, payroll is easier than many other accounting tasks in Quickbooks.
To pay salary based employees, who make the same regardless of the number of hours worked, the best option is to treat them as a 40 hour per week employee every week. Just divide their annual salary by 52 weeks, and then divide that number by 40 hours. That is their “hourly” rate you should enter when setting up the employee.
Don’t Forget Your Taxes
Quickbooks will calculate your taxes each quarter, but it won’t pay them for you unless you pay Intuit for their premium payroll service, which is not worth the cost in my opinion. Just remember to print your forms and checks and send to the Federal and State tax agencies each quarter and you are all set.
Easy to Get Started
If you are not sure where to start with your business finances, Quickbooks desktop is the cheapest and most powerful option available.
Note: I added affiliate links for Quickbooks Pro
About Carson Derrow
