How to Turn On QuickBooks Online Payroll - dummies

How to Turn On QuickBooks Online Payroll

By Elaine Marmel

QuickBooks Online Payroll (QBOP) uses a wizard to walk you through the payroll setup process. You start by first turning on payroll in QBO. Then, the wizard walks you through setting up your company so that you can pay your employees.

Note that you can click Add an Employee to set up employees without turning on payroll. You will be able to enter payroll later, going back as far as the date on which you started your payroll subscription. Also note that not turning on payroll immediately doesn’t save you any money. You will be charged for your subscription from the time you sign up for the service less any trial time even if you don’t pay any employees. Plan to set up payroll as soon as you subscribe so that you don’t spend months paying for a subscription you’re not using.

turnon QBOP
Turning on QBOP.

Click the Employees link in the Navigation bar, and then click the Get Started button.

The Payroll Wizard starts. On the first page, you select payroll features that are important to you so that QBO can help you select the right payroll plan for you. As soon as you select Automatic Tax Calculations, QBO offers you two options for payroll:

  • I Want to Do Payroll Myself
  • I Want Payroll Done for Me

If you scroll down the page, QBO shows you a comparison of the features in the two different services. Choose the Try Now button in the I Want to Do Payroll Myself option — and if you want to use QBOP, you too should choose this option.

QBO redisplays the Employees page, telling you that you’ve signed up for QBOP. Click the Get Set Up button to start the payroll setup process.

On the first page of the Get Ready for Payroll Wizard, QBO displays the information you provided when you initially set up your company. Double-check the information and click the Continue button in the lower right corner of the screen.

On the next screen of the wizard, you indicate whether you’ve been paying employees during the current year or whether you are about to start paying employees for the first time.

If you indicate that you have previously done payroll and are now switching to QBOP, the wizard displays two additional questions for you to answer. Answer the questions and click the Continue button in the lower right corner of the screen. If you indicate that you’ve not previously paid employees, no additional questions appear, so you can just click Continue in the lower right corner of the screen.

payroll history QBOP
Indicate whether you’ve previously paid employees during the current year.

The instructions that follow assume that you’ve not previously paid any employees. If you have been using QuickBooks for Windows Desktop to prepare payroll, you can enter payroll history information for each employee and each payroll using information you find on the Payroll Summary report from the QuickBooks Desktop program.

The next page of the wizard asks if you have collected completed W-4 forms from your employees. W-4 forms are the Internal Revenue Service’s form that employees complete to specify their withholding allowance. If you need to complete Form W-4 for any employee, you can click the Need W-4 Forms link in the Payroll Setup Wizard to display and print or save a PDF version after printing the form; the form QBO displays is not an editable form. For an editable form that you can complete using your computer, visit the IRS website and click the W-4 link in the Forms & Pubs section to display editable PDF forms.

w-4 info QBOP
Specify whether you have W-4 information from all or most of your employees.

After you indicate that you have received completed W-4 forms from your employees, click Continue. The wizard prompts you to enter one of your employees. Click Add an Employee to display a screen like this one.

emplyee info QBOP
Provide information for the first employee.

If you don’t have a Form W-4 from the employee, you can invite the employee to fill in the information himself using a secure portal. If you want the employee to provide the information, provide the employee’s email address and click Send Email. Alternatively, choose No, I Want to Enter the Info Myself and fill in the page with the following information:

  • Name
  • Hire Date
  • The frequency with which you pay the employee and the next expected pay date
  • When you supply pay frequency information, QBO creates a pay schedule that you can apply to subsequent employees you create.
  • The amount you pay the employee
  • Whether the employee has any deductions
  • Form W-4 information

This information includes the employee’s address, social security number, marital status, withholding amount, and state payroll tax — which varies from state to state, but QBOP prompts you to supply information for the state in which your business operates. The prompts for all this information appear when you click the Enter W-4 Form button.

To identify your state’s payroll tax requirements, visit your state’s website and search for payroll taxes.

  • The method you want to use to pay the employee (such as paper check or direct deposit)
  • If you choose Direct Deposit, specify the bank account information for the employee (account type, routing number, and account number).

After you answer questions 2–5, if you need to make changes, click the pencil icon beside the answer. As you supply information, QBOP updates the preview of the sample check on the right side of the window.

When you finish supplying the employee’s information, click Done, and QBO displays the Run Payroll page, listing employees being paid using the same pay schedule. If QBO displays a page with a Preview Payroll button in the bottom right corner, you can click the down arrow beside the button and opt to do so later.

Once you add an employee being paid using some other pay schedule, QBO displays the Employees page; the employees you set up appear in the list, and you can click an employee to edit the employee’s information, or you can click the Add an Employee button to add more employees.

QBOP employee info
Add or edit employees.