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jmason2
Level 1

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

 
5 Comments 5
IntuitAika
Intuit

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

Hi jmason2, 

 

Thank you for reaching out to us.

 

You can set up a pay category to record the advance payment made to an employee. Let me show you how to add a pay category. 

 

  1. Go to Employees tab and select Payroll Settings.
  2. Select Pay Categories.
  3. Select Add and enter the name for that pay category then Save.
  4. Enter the pay category details and select Save.

 

Once done, you can apply the category on a pay run by selecting an employee and then Actions> Add earnings

 

While we don't have a specific method of entering an employee's advance payment, if you need to aggregate the tax, you can select Actions> Add Lump Sum Payment.

 

For more information, you can check on this article: Process Lump Sum Payments, Bonuses or Leave in Advance

 

Let me know if you need any help by leaving a comment below. Have a nice day! 

 

jmason2
Level 1

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

Hi,

 

Thank your reply. I'm not sure if I made myself clear. what I want to do is process payroll as per usual and deduct the payment in advance after Tax to repay so it shows in the payslip the Net wages then deducting the amount that has already been paid to the employee so the remaining balance is what is owing to the employee to be paid in the bank account.

I still want to report the in the STP as the the usual wages for the month no deduction to be reported. Can this be done?

 

Thanks in advance,

Julie

 

IntuitSheila
Level 8

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

Thanks for replying in this thread, jmason2.

 

When setting up the deduction category you have the option to select the deduction type as pre-tax, post tax type. Here's how you can set up the deduction:

 

  1. Click on the Employees tab.
  2. Click on the Payroll Settings.
  3. Click on Deduction Categories.
  4. Click on Add button, and enter the deduction category name.
  5. Select Deduction type, and select the Classification.
  6. Click on Save.

Then, let's go the employee details so you can assign and set up the deduction category. 

 

  1. Click on the Employees tab.
  2. Click on the employee name, and click on Pay run Inclusions.
  3. Click on Add button next to Deductions.
  4. Select the Deduction type, and enter the Amount.
  5. Choose a method under This deduction should be paid.
  6. Fill out other fields like start and end dates.
  7. Click on Save.

Once done, when you create a pay run for the employee the deduction will automatically appear.

 

As for the STP, please be advised that all data submitted to the ATO is based from all pay runs created and finalised in QuickBooks Online Payroll. STP reports employees year-to-date gross payments, tax withheld, allowances, deductions and superannuation liability. If you don't wish to report the deduction, we'd recommend checking with your accountant to provide more information on how to lodge the STP.

 

You can check the articles below to learn more about deductions and STP:

As always you can reply in this thread if you need more help with QuickBooks. We'll be around to help you.

RWilk
Level 1

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

Hi Julie,

Did you work out a system for this scenario?

IntuitSheila
Level 8

How do I set up a deduction in payroll for payment in advance made to the employee and the employee needs to pay by deducting the amount in the next payroll run?

Hi RWilk,

 

You can set up a deduction category to record the advance payment made to an employee. Here's how:

 

  1. Click on the Employees tab.
  2. Click on the Payroll Settings tab then select Deduction Categories.
  3. Click Add and enter a Name for the Deduction
  4. Enter the Deduction Type and any other relevant fields, then select Save.

Then, assign the deduction category to the employee. Here's how:

 

  1. Click on the Employees.
  2. Then select the employee you wish to add the deduction.
  3. Click on Pay Run Inclusions from the left-hand menu, then select the Add button next to Deductions
  4. Click on the Deduction Type and Amount  
  5. Select the method This deduction should be paid
  6. Enter any other relevant fields (including start and end dates), then select Save.

Once you create the next pay run the deduction will show on the employee's pay run.

 

Also, you may want to check this article to learn more about Set up employee deductions.

 

Feel free to reply to this thread if you have more questions about QuickBooks. Have a nice day!