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Level 2

QBO Standard Payroll - change default hours from 40 hrs per week

It seems the system defaults salary employees to 40 hours per week.  It then uses the calculation to figure out the hourly rate for when you are adding vacation or sick hours but also when you are deducting someone salary for time off without pay.  This issue for me is that I don't pay based on a 40 hour week.  I want to pay salary on a 37.5 hour week so when I make an adjustments to time off not paid the system incorrectly calculates the hour rate and does not deduct the correct amount.

 

Does anyone know how you change this default for salary employees so it is not a 40 hour work week but less?  I can't believe they would think this should be the standard default for everyone.  There should be setting to set the weekly hours by each employee but I just can find this on the standard payroll version of Quickbooks online.

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Best answer 04-16-2019

Accepted Solutions
Level 2

Re: QBO Standard Payroll - change default hours from 40 hrs per week

Figured this out.  Any full time employee for you that works less then a 40 hour work week in QBO is then considered a part time employee even if it is by 30 minutes (example 39.5 work week).

 

So if your employee works full time at 37.5 hour work week then in QBO you need to record this as a part time employee.

 

When selecting the part-time function in the employee profile it will then prompt for the hours worked per day and how many days per week they work.  For example 7.50 hours per day and 5.00 days per week (37.5 hours per week).

 

After doing this it will then calculate the hourly rate, vacation time, sick time and all the reports correctly.

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5 Comments
Level 12

Re: QBO Standard Payroll - change default hours from 40 hrs per week

There may be rules from Ottawa that describe the 40 hour usage. Or it may be an option in Enhanced Payroll.

 

Remember this that in most situations your salaried workers get the exact same amount when they work 37.5 hours per week or 375 hours per week or even 3.7 hours. Salaried means salaried. Working or not. Yes a salary worker gets PTO but there is only a calculation as to what they are allotted in not having to show up. They by contract must be paid the same while on vacation, sick, or working. Your contract may allow a deduction from pay for time beyond allotted PTO but in the end salary is an annual calculation first - divided by scheduled pay periods regardless of hours. The hours come into play only for minimum wage and PTO. If you give an employee the day off the system bases it on 1/5 of a week or 8 hours. Maybe that employee always works 12 hours or only 6 - it doesn't matter the PTO is based on 40. You might try creating a PTO salary base that is 93.75% of the annual wage divided by 2040 , the number of hours in a standard annual salary at 40x52

Level 2

Re: QBO Standard Payroll - change default hours from 40 hrs per week

Thank you for the reply.  I do understand what you are saying but because the QBO system sets the default of 40 hours per week which is not correct for my business it then calculates the hourly rate based on the 40 hours per week for the salary person which then does not accurately reflect in any QBO reports that show hours or rate.  For example the Payroll Summary by Employee and Pay cheque report.  These reports summarized the total hours worked based on 40 hours per week not the 37.5 hours.  The hours worked in these reports are not accurate for employees who work less then a 40 hour week.

Level 2

Re: QBO Standard Payroll - change default hours from 40 hrs per week

Yes I believe it was an option in the Enhanced Payroll to adjust hours worked for salary.  I did use this system in a test trial for the period of time allowed and ran a payroll to test.  In the end I thought the Standard payroll was better, more flexible, and better reports.  This so far is the only issue I have found needs to be improved unless I am not doing something incorrect.

QuickBooks Team

Re: QBO Standard Payroll - change default hours from 40 hrs per week

Hi SevenClark,

 

I can see how important it is for you to edit the hours of your salaried employees. I'll pass this along to the Wagepoint development team to be considered in future updates.

 

If there's anything that we can help, feel free to reach out.

Level 2

Re: QBO Standard Payroll - change default hours from 40 hrs per week

Figured this out.  Any full time employee for you that works less then a 40 hour work week in QBO is then considered a part time employee even if it is by 30 minutes (example 39.5 work week).

 

So if your employee works full time at 37.5 hour work week then in QBO you need to record this as a part time employee.

 

When selecting the part-time function in the employee profile it will then prompt for the hours worked per day and how many days per week they work.  For example 7.50 hours per day and 5.00 days per week (37.5 hours per week).

 

After doing this it will then calculate the hourly rate, vacation time, sick time and all the reports correctly.

View solution in original post