How to Set Up Basic Payroll with QuickBooks 2011
To set up do-it-yourself payroll with QuickBooks 2011, you step through a Web-based interview. To start this interview, choose Employees→Payroll→Order Payroll Service. QuickBooks displays the Intuit QuickBooks Payroll page. As this Web page indicates, to set up QuickBooks payroll, the first step is choosing a payroll option.
The Basic Payroll option is truly a do-it-yourself solution. You do the work. You need to understand federal and state payroll tax rules. However, you don't have to pay much.
To choose the Basic payroll option, click the Learn More button in the Let Your Accountant Handle Taxes box. Next, when prompted by QuickBooks using a second payroll setup Web page, click the Basic Payroll tab and then indicate how many employees you'll need to prepare payroll for by marking either the Up To 3 Employees button or the Unlimited Employees button. And then you click the Basic Payroll's Buy Now button.
Signing up for a payroll service
To sign up for the payroll service after you've selected a particular option, you fill in a series of Web page forms. You enter your business name and address, give your firm's employer identification number, or EIN, and also provide credit card information so Intuit can bill you for its service. Then you click the Next button. QuickBooks then steps you through the process for signup. Simply follow the on-screen instructions to describe how your company processes payroll.
Setting up employees
After you set up your company information for payroll, you're ready to set up employees for payroll. As part of the Basic Payroll setup, QuickBooks displays a Web page where you may add your employees. You may also add employees by displaying the Employees Center.
Providing payroll and tax information
Use the Payroll Info tab to describe how an employee's salary or wages are calculated. You enter the payroll item into the Earnings area. Use the Pay Frequency drop-down list to identify the pay period. Optionally, use the Class drop-down list to classify payments to this employee.
To describe which taxes an employee pays, click the Taxes button. QuickBooks displays the Taxes dialog box.
The State tab supplies boxes that you can use to describe state taxes, obviously. The Other tab lets you describe and store any local tax information, such as a city income tax. What you see on the Other tab depends on your location.
If you click the Sick/Vacation button, you see the Sick and Vacation dialog box, which lets you specify how sick or vacation pay or personal leave time is accrued payroll period by payroll period.
If you've chosen to use the Direct Deposit option, click the Direct Deposit button on the Payroll Info tab. QuickBooks then prompts you to supply the direct deposit information necessary to directly deposit checks for employees.
Providing other employment-related information
If you select the Employment Info option from the Change Tabs drop-down list, QuickBooks displays the Employment tab. The Employment tab lets you store the hire date, fire date, and other similar bits of employment data.
Setting up year-to-date amounts
If you're setting up the Basic Payroll Service at the very beginning of the business's operation or at the beginning of the year, you don't have to set up any year-to-date amounts (because the year-to-date amounts all equal zero). If you're switching to the Basic Payroll Service sometime in mid-year, however, you do need to set up year-to-date amounts. For this reason, the QuickBooks Basic Payroll setup process wizard walks you through the process for recording year-to-date amounts.
Checking your payroll setup data
As part of the Basic Payroll setup process, QuickBooks (or you) may identify suspicious payroll data that doesn't seem right; perhaps an employee that you know you've paid shows no year-to-date wages. In this case, you correct the incorrect data by following the on-screen instructions. Note, however, that QuickBooks Basic Payroll setup process may also identify suspicious payroll data that is, in fact, correct.