Su Brown and Associates, PLLC

  Certified Public Accountants

   77 Southway, Suite B,  P.O. Box 1454,  Lewiston, Idaho  83501

Telephone

208-743-7790

Fax

208-743-7363

QuickBooks Tip

Setting Up A New Employee

Under the Employee menu, select Employee List.  If you use the navigator, click the employee button.  From the Employee List window, click the Employee tab on the lower right corner of the window and then click New.

Quickbooks 2002 is slightly different from 2003.  QB 2002 has three tabs:  Address Info, Additional Info, and Payroll Info.  From the Payroll Info tab, click Taxes to input the withholding information from the W-4.  QB 2003 has three different tabs:  Personal, Address and Contact, and Additional Info.  It also has Change Tabs to access Personal Info, Payroll and Compensation Info, and Employment Info.  Go to the Payroll and Compensation Info change tab to input the withholding information from the W-4.  Each version has essentially the same fields; they are just grouped differently.

The 2002 Address Info tab and 2003 Personal tab are for the name, social security number, and address.  Use the exact name and spelling from the employee's social security card.  If a female employee has married but not changed her SS card, you must still use that information until she presents you with a corrected SS card.  You have the option to list another name for the checks, such as a nickname.  You may also add phone numbers, email, and other information.

The Additional Info tab has a field where you can assign an employee number.  It also has User Defined Fields that you can designate for information you want to retain.  Examples are spouses name, number of children, etc.

Under the 2002 Payroll Info and 2003 Payroll and Compensation info you can set up the employee pay rate, deductions, etc.  Click the arrow next to the Pay Period field to set up how often the employee is paid.  Examples for pay periods are:  daily, weekly, bi-weekly (every two weeks), semi-monthly (twice a month), monthly, quarterly, and yearly.  Earnings items are based on hourly, salary, and bonus, as examples.  If entering a salary, use the annual.  QB will divide the amount by the number of pay periods.  If an annual salary is $24,000 and the pay period is bi-weekly, the salary for each period is calculated to be $923.08 ($24,000 divided by 26 pay periods).  If you have hourly employees, you will need to set up separate items for regular pay and overtime pay.

Additions, deductions, and company contributions are payroll items for insurance, garnishments, pensions plans, auto reimbursements, and draws.  Amounts are deducted or added each pay period if set up in the employee masterfile.  Wage and deduction items can also be added or removed as needed while preparing payroll.

The Taxes button on the Payroll Info tab is very important.  This is where you tell the program what to withhold as taxes from the employee's pay and what to accrue as taxes to be paid by the company.  You must use the exact information provided on the form W-4.  If the employee wishes to change their status and number of allowances, then you must have the employee provide you with a new W-4 stating any changes.

The first tab from the Taxes window is Federal.  Enter the filing status, number of allowances and any extra withholding from the W-4 form.  The Extra Withholding field is for an additional amount the employee wishes to be withheld for each pay period.  The Subject To taxes are, for most employers, Medicare, Social Security, and Federal Unemployment Tax.

The next tab from the Taxes window is State.  The options for state worked and state lived can be different.  For Idaho employers, all employees are subject to Idaho taxes withheld.  So both the State Worked field and State Subject to Withholding will be Idaho.  For Washington employers, all employees are subject to State Worked.  But since Washington does not have withholding, when WA is entered as State Subject to Withholding, it will omit filing status and allowances.  Some Washington employers provide withholding options for employees that reside out of state and thereby the State Subject to Withholding can be used for their state of residence.  Extra withholding can be entered for the state like the Federal.  Be sure to check the box for SUI so that state unemployment taxes can be accrued for the company.  The Miscellaneous Data area and Previous State Data area are for special fields for other state requirements.

The last tab on the Taxes window is Other.  If your company has other taxes deducted from employee's pay or other taxes paid by the company, then they would be selected if they apply to the employee.

There is a Sick/Vacation and Direct Deposit button as from the Payroll Info tab.  These are options for the employer to use.  The Sick/Vacation tab will track time allowed and used for those items.  The direct Deposit is an option you set up through QuickBooks.  A fee is charged for the feature.

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