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Payroll Basics

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Setup Payroll Items 0:54
    • Add to Subscription
  • Add Employee 2:26
    • Creating and Adding Personal Information
    • Adding Payroll/Compensation Information
    • Setup Taxes
  • Make a Payroll 8:36
    • Start a Scheduled Payroll
    • How to Edit Each Employee's Payroll Summary
    • Custom Items on Payroll
  • Print Payroll Checks 14:36
    • Print Later
  • Pay Payroll Liabilities 14:49
    • Forward Taxes to Authorities
    • Generate/Sending Check

Transcription: Payroll Basics

Welcome back to Educator.com.0000

This is QuickBooks lesson on basic payroll.0002

In this lesson, we are going to teach you how to run your payroll for a small business.0006

So, if you have 1 employee or 3 or 5 or 10 or 15, it does not really matter.0011

But, if you are going to use the payroll service, you have to have an additional subscription through Intuit.0015

They have a variety of levels of subscriptions. You can have a payroll service that Intuit will do for you.0023

You just submit the hours to them, and they will run it for you and download it to your computer.0031

You can actually do partial payroll. There is a variety of services that Intuit offers.0037

So, in order to do that, you would choose the one. I would not choose which one is best for you.0043

But, the one that I would recommend is when you do the payroll yourself, and that is what we are going to show you today.0048

Using QuickBooks, we want to make sure that after you subscribe to the service, it will actually set it up for you under the subscription.0055

In order to look at that and to add to the subscription, you can go under QuickBooks.0063

Under the Menu bar, you can click on Employees, and down below, you will see that you would have an item that says Payroll Subscription or Service.0070

When you click on that option, you will see it in your QuickBooks if have not already done so,0081

it will run you through the different options that you can subscribe to and pay for.0087

Once you do that, it will add a list under Payroll Items. It will add this payroll item list in your QuickBooks.0093

So, under the List menu, when we click on Payroll Item List, you can pull that up.0103

And now, you can see the variety of payroll options that it gives you: Salary, Hourly Employees. There is Insurances.0110

There is the Federal Employment. There is the FICA.0119

There is Social Security, which is FICA- Social Security, Medicare together. There is your state withholding.0124

It is depending on the state that you are in and your unemployment rates etc. that you would need to use to setup.0129

Once that is done in setting that up, then, we can go ahead and show you how.0137

And then, we will be showing you how to run a payroll and add a new employee.0142

So, once you subscribe, we can now begin setting things up to where we can start paying our employees.0148

The first step is after you have all your payroll item lists set up properly, when you add your state rates and whatnot,0154

in California, there is an Employee Training Tax rate, and there is an Unemployment rate that varies per company,0165

so, you would have to check with your state to see where your rates are for your specific company.0175

But, we are going to go ahead and show you how to add an employee to the payroll.0181

So, under QuickBooks, we are going to go back to our Employee area, and we are going to choose the Employee Center.0190

There is a couple of ways we can do.0196

We can do it from the Menu bar, or we can click on the Employee icon from the Icon bar and pull up the Employee Center.0198

We are going to add a new employee here and set them up to be able to pay them in Payroll.0208

So, under the Employee Center, I am going to click on the upper left corner where it says New Employee.0216

And this is going to be Lisa, and the last name will be Sample.0223

So, we put in their information. Here, we can put in their Social Security Number.0230

I should put it in properly, and, of course, with the name Lisa, it is a female. We could put in their date of birth etc.0241

We can add their address and contact information here. We can add additional information, and we will need what the billing rate of the customer might be.0254

If we are going to charge for their hourly rate, we might want to put a surcharge, if this is a $10 an hour employee.0261

But, when they do work for a customer, we might bill them $15 an hour or $20.0268

So, we can put in their information under these different tabs for personal information.0275

But, the most important item that we are going to look for is the payroll information.0280

So, up here in the New Employee screen, we will have a little dropdown menu under Change tab, and it says Personal Information.0284

Well, if we drop that menu down, we can see that we have an option for Payroll and Compensation.0292

If we click on that, it pulls up the Payroll Information. This person would be a regular pay and an hourly rate.0298

So, we are going to pay Lisa $10 an hour. We also want to say, well, whenever they work overtime, we have to obey the law and pay them time and a half.0305

If they are sick, well, we have a sick hourly rate that we are going to add in there, and that is at regular rate.0323

And when they are sick, we are going to pay them for sick time at $10 an hour.0329

When they go on vacation, it is vacation time at $10 an hour. We are going to give them those benefits and etc.0332

So, we can add those types of items there. We can also say that they are participating in the medical plan that we might offer.0340

So, we are going to give them that there is the medical insurance that they are going to have to contribute $30 a month for.0350

We are going to deduct $30 a pay period rather, and if we are going to be paying them biweekly, every two weeks,0357

that means that we are going to deduct $30 every two weeks to pay for the benefit.0368

We are also going to add maybe the dental rate, as well, and maybe that is $10 every two weeks that we are going to pay.0373

Then, when we have to get their W-4 filled out, when we do payroll, there is always a form of W-4s that we have to fill out.0387

You have done it when you have been an employee.0394

You have got to fill out the number of deductions that you plan on taking for your payroll and how much they are going to take out of your pay check.0397

We utilize their W-4 form, and we will click on the button that says Taxes.0406

And this is where we can now put in that information that we obtained from the W-4.0412

So, this is a single female, and on here W-4, she has claimed one exemption.0417

And, of course, that is subject to Medicare, Social Security and Federal Employment Tax.0424

We are going to go under the state, and it is also single and one, so the allowance is one.0428

There is no extra holding. The employee can say "Hey, I would like to contribute more tax to the government".0436

And we have a slot for that if they want to add a certain amount to the tax. They can do that, as well.0443

But, we can just go ahead and stick with the standard W-4 and that.0451

There is another tab where we can add in the other state taxes or local taxes if they apply to our business.0456

This one automatically sets it up because we are in California. It is going to set up to add the Employee Training Tax, which is for the employer.0462

So, we will go ahead and click OK that now the taxes are done and set up properly there.0472

And we can say we have added an employee, so we can click OK and close that Employee down.0479

When you say OK, it might say Hey, another employee, Ben Sample already has a Social Security Number.0487

It is the same thing. We have already done this, so we will just say Yes.0493

I am going to keep it as up. It wants me to ask if there is payroll information for the sick and vacation.0495

I am going to leave it as is. We have already done that, so we will leave it as is.0503

OK, so Lisa Sample is now set up as a new employee. Now, we are going to go ahead and pay our payroll0508

We are going to make a payroll. We are going to pay someone some money their timesheet.0516

And so, they had offered their time for the two weeks. They had worked 80 hours.0522

We are going to pay them a payroll, so we will run a payroll now. Under the Employee Center, there is a couple of things we can do to run a payroll.0526

We can either go through the Employee Center and click on Payroll.0535

Or we can get to the same screen by going Employees and Pay employees and Schedule a payroll.0540

Now, this screen here, when we get to this point, it is going to give us a lot of different items.0547

It is going to say Pay employees. This is Late, of course.0553

In the sample, it will pull it up that it is scheduled. Since it is biweekly, it will remind us that it is ready to do.0557

It will give us some liabilities. Once we set up a payroll, it will add the liabilities that we need to pay to the various agencies.0565

And, of course, there are some tax forms that we can go ahead and process, which would be quarterly forms etc., and that is at a more advanced payroll.0573

But, if you are familiar with payroll enough, this is how we would use it.0582

So, the first thing that we want to do is we are going to start a scheduled payroll.0586

So, we would click on that button there, and we are going to go ahead and click on Continue to this message that says another pay check exists etc.0591

We going to ignore that. When you do your new company, you will not have these duplicate things.0599

This is a sample company.0604

So, we will click on Continue. It will bring up the Enter Payroll Information.0605

For this example, we are just going to pay Lisa Sample for now, so I am going to uncheck all the employees.0611

We can pay them all if we want and go individually and make sure their time is entered right.0618

So, we are just going to only do the one for now, so I have the one checked, Lisa Sample, and I am going to click on Open pay check detail.0624

Now, we have not put in any hours in here, so she worked a regular 80 hours for the two weeks.0633

And it is going to automatically calculate it to $800. The bottom right corner of the screen gives you the Employee Payroll Summary.0641

It will give you the regular pay. It will give you the health insurance that is being deducted, the dental insurance that is being deducted,0652

the Federal Tax and the FICA, which is Social Security, Medicare and your state taxes.0657

And over here in the lower left corner, it is going to show you all the company paid taxes, the liabilities that the company has to pay.0665

Here is the Employees portion. Now, here is the Company Paid portion of Social Security.0673

Here is the training tax that we saw, California Training Tax.0678

You notice that it is not here. The employee does not pay the training tax.0682

The employer has to pay that training tax, and there is the matched FICA that they have to pay for Social Security and Medicare.0686

There is the Federal Unemployment and the California Unemployment. These are employer taxes that they pay on the employee's behalf.0695

Up here in the center portion is the other payroll items. We can add other items if we needed to.0705

If they were getting a mileage reimbursement of some sort, or we wanted to add something else to them, we could do that.0712

But, at this point, this person is participating in the health insurance and the dental plan, as well.0719

If we are happy with that, we can say "Great".0725

Go ahead and Save and close, or we can do some custom items where this Enter net calculate gross is there.0729

So, if we check on that, we can actually do a reverse.0740

If the person says "Well, I really want a net $650", then, we could reverse calculate on what-if scenarios.0747

But, we are just going to keep it as standard at this point in time. We will say Save and close.0756

Now, we have added this person in there for total 80 hours.0762

We can go ahead and say continue. There she is, Lisa Sample.0767

Here is the summary of her pay check here, the gross pay less the taxes and the deductions. Net pay is 625.0772

We say Create the check. At this point in time, we can go ahead and print the check and print the pay stub.0780

If we do that, it will bring to the Print Screen, and we can go straight to printing that check.0786

At this point, we are not going to do that, but we could, and we could put our check stock in, and it will print the check.0794

We can also print this pay stub, and it will print the pay stub in an additional piece of paper that we can0799

give to the employee to letting them know what their taxes are and what the breakdown of their payroll is.0804

For this purpose, we are not going to go ahead and print it, but we will look at the check in the bank. That was a 2007 check.0810

We are a little off on our dates here, but if we go all the way up to that check and look for it, we can see it in 2007 here.0820

Go all the way back up on our date here, and we can find that check in 2000. Oh, here it in 2008 very, very much so.0833

Here is a check we did dated in 2008, and it is Lisa Sample, and there it is on our check register. It is ready to print.0841

And once we printed it, we can go ahead and assign the check number to that. If we want to look at that again, we can look and edit the transaction.0850

It will give it to us in a sample, and we can say "Let's look at the payroll pay check detail".0859

It will pull up the payroll pay check detail as we have seen before, so we will close that down, and assume that we went ahead and paid that employee.0864

Now, in order to print those checks, if you have set them all up to be printed later, we can go ahead and print them again later just like what I did.0875

So, in order to print them later, we can go File, Print form and go down to Pay Checks.0885

When we do that, the pay checks will be listed here, and then, we are ready to print those.0891

Now, the next step is after we go ahead and pay our employees, we need to make sure that we forward0900

the taxes to the actual tax authorities that we have agreed to under law that we need to pay.0907

So, here, it gives us a nice little listing of all those taxes that are due.0917

If we want to pay those, for instance, we are going to pay the Federal government, maybe not the state today,0923

but we are going to pay our Federal Taxes, here they are.0930

It gives us a nice little listing to pay those taxes, and we can check the items that we are going to pay first and say View and pay.0934

Once we say View And pay, it is going to create a check and generate a check for us.0944

This is a bank deposit for taxes. Banks are set up usually to take tax deposits on behalf of the IRS, and here it is.0949

It is going to give us all the payroll liabilities here for us.0960

And then, we would go ahead and say Save and next, and it goes to the next one for the Federal Unemployment.0965

The one that was before was the Social Security and Medicare and Federal Tax.0971

Withholding is this is for the unemployment only. Nothing in it take.0979

We will say Save and Close.0982

Those are ready. It gives us a little summary of those taxes.0984

It is going to be To be printed. Here is the amount that we are sending.0988

It is for this period of time, and it summarizes those taxes for us, so it is quite, quite simple.0991

If we wanted to pay the states, we would do that in the same manner. It may be the health insurance.0999

We can click the rest of them and go through the same process.1005

So, I am going to pay the state tax withholdings as well as the unemployment and training tax.1008

And we are going to pay the insurance company, so, I will say View and pay. Here it is.1015

It gives us the check for our state taxes withholding from the employee and the disability for the employee.1021

We will say Save and next. It will generate that check.1029

The next one is the health insurance that is going to be paid to the Erin's Dental Insurance Company.1032

And it is for the health insurance, and we say Save and next.1038

And then, the final check that is listing to us is for the Employment Insurance that the employer has to pay as well as the Employee Training Tax.1043

And we will say Save and close.1052

So, this is the summary of all those checks. We can go ahead and print those checks and get to mail that to the proper authorities.1055

At this point in time, we will not do so. We will close that down for this purpose, and that is where we have paid all of our payroll liabilities.1061

I will close this down.1069

Again, thank you so much for visiting us here at Educator.com. We will see you next time.1071