Doing Payroll in QuickBooks: Overview, FAQs, and How-To Guide

Managing payroll can be tricky, especially with so many rules, calculations, and changes to track. For construction businesses, payroll needs to be done carefully to avoid mistakes and save time.

This guide will show you how to use QuickBooks Payroll software to manage payroll more easily. It’s designed to help contractors and construction business owners handle payroll efficiently and stay on top of tax rules.

In this guide, you’ll learn:

• How to set up QuickBooks Payroll Software for your business.
• Steps to run payroll smoothly.
• Tips for managing payroll taxes and year-end forms.
• Common mistakes to avoid when using QuickBooks Payroll.

By the end, you’ll know how to use QuickBooks Payroll Software to make payroll simpler and more accurate for your construction business.

How Does QuickBooks Help with Payroll?

QuickBooks simplifies payroll by handling many time-consuming tasks for construction businesses.

Here’s what it does:

• Organizes payroll tasks: It manages employee pay, calculates taxes, and tracks time, making payroll more efficient.
• Customizes for construction needs: QuickBooks can handle different pay rates, track job costs, and organize expenses to fit the unique needs of construction businesses.
• Helps with tax compliance: It updates automatically for changes in tax laws and ensures calculations stay accurate.
• Saves time: Automating payroll tasks reduces errors and cuts down on manual work.
• Creates useful reports: QuickBooks generates payroll and tax reports to help you monitor your business finances.

When choosing between QuickBooks Desktop and Online, consider what works best for your business. Both can help with payroll, but QuickBooks Online may offer flexibility for businesses needing remote access.

Workyard integrates with QuickBooks to streamline accounting for your constuction business.

Find out more

How To Set Up Payroll in QuickBooks

Setting up payroll in QuickBooks might feel overwhelming at first, but it’s straightforward when broken into simple steps.

1. Access Payroll Setup: Log in to QuickBooks and go to the “Employees” tab. Click “Set Up Payroll” to begin.
2. Enter Company Information: Provide details about your business, such as the legal name, address, and tax identification numbers. Double-check this information for accuracy, as it’s the foundation for your payroll system.
3. Add Employees: Add employee details, including names, addresses, Social Security numbers, and pay rates. You can also assign payment schedules, such as weekly or biweekly.
4. Set Up Payroll Taxes: Enter your federal and state tax information to ensure accurate calculations. QuickBooks helps simplify this process to keep you compliant with tax laws.
5. Optional: Set Up Direct Deposit: If you’re using direct deposit, securely enter employee bank account details. This allows QuickBooks to process payments directly to their accounts.
6. Run a Test Payroll: Before your first real payroll, run a test to check that all employee details and tax calculations are correct. Use the “Payroll Preview” feature to spot any issues.
7. Go Live: Once everything looks good, activate your payroll system. QuickBooks will guide you through the final steps to ensure it’s ready to run.

With these simple steps, you can set up payroll in QuickBooks accurately and avoid issues later. Take your time to review each step, and your system will be ready to handle payroll efficiently.

How Do You Run Payroll in QuickBooks?

Once payroll is set up, running it in QuickBooks is simple and efficient. Follow these steps:

1. Set a Payroll Schedule: Choose your pay periods—weekly, biweekly, or monthly. Keeping this consistent helps you stay organized.
2. Integrate Time Tracking: Connect time-tracking tools to QuickBooks to import work hours directly. This reduces manual entry and ensures accuracy.
3. Add Adjustments: Include bonuses, overtime, or other earnings. You can also add deductions as needed.
4. Preview and Approve: Use QuickBooks’ preview feature to review paychecks before finalizing. Check all details carefully, then approve.
5. Issue Paychecks: Choose how to pay employees: print checks or send payments via direct deposit.
6. Handle Taxes and Compliance: QuickBooks calculates taxes and generates reports. It also helps with tax filings and ensures compliance with regulations.

By following these steps, you can run payroll smoothly while focusing on other important parts of your business.

To avoid payroll mistakes, pair QuickBooks with an accurate time-tracking tool like Workyard.

Workyard integrates seamlessly, offering:

• Precise GPS tracking of work hours.
• Automated reminders for clocking in and out.

Payroll Taxes and Year-End Forms in QuickBooks

Managing payroll taxes and preparing year-end forms can be complex, but QuickBooks helps simplify the process and ensure accuracy.

1. Calculate and Pay Taxes: QuickBooks automatically calculates federal and state payroll taxes based on your setup. This reduces manual work and minimizes errors.
2. Make Timely Tax Deposits: The system provides reminders and step-by-step guidance to help you deposit taxes on time, ensuring compliance with deadlines.
3. Prepare Year-End Forms: At the end of the year, QuickBooks generates important forms like W-2s for employees and 1099s for contractors, summarizing earnings and tax withholdings for tax filing.
4. File Forms Electronically: QuickBooks offers electronic filing, making it easy to submit forms without dealing with manual paperwork.
5. Stay Compliant with Tax Laws: QuickBooks keeps you updated on changes in tax regulations and ensures your payroll remains compliant, helping you avoid penalties.
6. Monitor Taxes Year-Round: The system continues to track tax updates throughout the year, so you can make any necessary adjustments to stay aligned with current rules.

With QuickBoois automating these tasks, your payroll tax management and year-end reporting becomes simpler, so you can focus on running your business.

What Are Common Payroll Mistakes in QuickBooks and How Can You Avoid Them?

While QuickBooks simplifies payroll, some common mistakes can still occur. Knowing these pitfalls and taking steps to prevent them is key to managing payroll accurately.

1. Manual Data Entry Errors: Mistakes in entering employee details, hours, or tax information can lead to payroll issues. Always double-check entries to avoid discrepancies.
2. Missing Tax Updates: Tax laws change frequently. QuickBooks prompts updates for tax tables, but it’s important to apply them regularly to stay compliant.
3. Misclassifying Employees: Classifying employees incorrectly as contractors or vice versa can cause legal problems. Regularly review employee classifications to ensure accuracy.
4. Missing Payroll Deadlines: Late tax filings or payments can result in penalties. Use QuickBooks reminders and maintain an internal calendar to keep track of important dates.
5. Failing to Back Up Data: Not backing up payroll data can lead to losses during system failures. Use QuickBooks’ backup options to protect your payroll and financial information.
6. Ignoring Reconciliation: Unreconciled payroll records can cause errors. Regularly match payroll records with bank statements using QuickBooks’ reconciliation tools to identify and resolve discrepancies.

Stay vigilant and follow best practices to minimize errors and ensure smooth payroll management in QuickBooks. Paying attention to these details helps maintain compliance and keeps your payroll process efficient.

Read More

Learn more about QuickBooks:

• QuickBooks Simple Start Reviewed and Compared: What’s Your Best Option?
• QuickBooks Projects: Tips, Tricks, and Tutorials for Effective Use
• QuickBooks Construction Cost Codes: How They Work and How to Use Them Effectively
• QuickBooks Expense Tracking: How-To Guide and Top Integrations
• QuickBooks Bill Pay Guide: Setup, Optimization, Integrations, and More

FAQs About Doing Payroll in QuickBooks

Here are some frequently asked questions about QuickBooks Payroll.

How do I add employees to QuickBooks Payroll?

To add employees, go to the “Employees” tab in QuickBooks Payroll and click on “Add Employee.” Then, follow the steps to enter their personal details, such as full name, address, and Social Security number. You’ll also input their pay rates, tax withholding preferences, and payment schedules. If they choose direct deposit, securely add their bank account information. Double-check all the details to ensure accuracy before saving.

Can QuickBooks Payroll handle payroll taxes automatically?

Yes, QuickBooks Payroll automates payroll tax calculations. It uses the information you provide during setup to calculate both federal and state payroll taxes. QuickBooks also tracks changes in tax laws to ensure deductions remain accurate over time. Additionally, it can file taxes on your behalf, reducing the chances of errors and saving time compared to manual calculations.

Is QuickBooks Payroll suitable for my business size?

Yes. QuickBooks Payroll offers plans for businesses of all sizes. Small businesses can benefit from basic tools to manage employee pay and taxes. Larger businesses can opt for advanced plans with features like HR management, benefits tracking, and more. Whether you have a small team or a large workforce, you can find a plan that matches your business needs.

How does QuickBooks Payroll integrate with other apps?

QuickBooks Payroll integrates with a wide range of apps to streamline your workflow. For example, it works with time-tracking apps like Workyard, which help track employee hours and link them directly to payroll. It also integrates with accounting software, invoicing platforms, and project management tools to simplify payroll, project costing, and expense tracking.

Can I access QuickBooks Payroll on mobile devices?

Yes, QuickBooks Payroll is accessible through its mobile app. With the app, you can manage payroll, approve timesheets, and even view reports from anywhere. This flexibility is especially helpful for business owners or managers who need to stay updated while on the go.

What kind of support does QuickBooks Payroll offer?

QuickBooks Payroll provides various levels of support depending on your plan. It includes tutorials, a help center, and product guides for self-service support. Higher-tier plans may also offer expert assistance for setup, troubleshooting, and payroll reviews. For businesses that need extra help, QuickBooks offers personalized support to ensure your payroll runs smoothly.

How does QuickBooks Payroll ensure compliance with tax laws?

QuickBooks Payroll helps you stay compliant by automatically updating tax tables when laws change. It sends reminders for filing deadlines and ensures tax calculations are accurate for both federal and state requirements. At the end of the year, it assists with preparing and submitting forms like W-2s and 1099s, making it easier to meet tax obligations and avoid penalties.

Simplify Payroll with the Right Tools

Managing payroll doesn’t have to be complicated. With proper setup, attention to detail, and tools like QuickBooks Payroll, you can handle payroll efficiently and accurately. For construction businesses, integrating a reliable time-tracking solution can further streamline the process.

Workyard’s GPS-based time-tracking app ensures precise data for payroll, helping you save time and reduce errors.

Try Workyard for free today and experience a smarter way to manage payroll.