Payroll: What could go wrong?

Welcome to our What could go wrong? series, where we do our best to flout Murphy’s law and get prepared for anything that could possibly go wrong as we prepare for year-end.

Today’s topic is an especially sensitive one: paying employees. When you’re trying to make sure your workers are rewarded for the contributions they’ve made to your business, the last thing you want is for an issue with your bank to put your payroll in jeopardy. So, let’s take a look at some of the most common payroll issues and how to solve them.

This guide is for users of QuickBooks Online Payroll.

What could go wrong: A Non-Sufficient Funds (NSF) hold on your payroll account

An NSF hold on your payroll account happens when we debit your account for the direct deposit amounts due, and the debit is returned due to an issue with your bank account.

When this happens, we'll send an email to the Principal Officer or Primary Principal listed on your account (you can find out who your Principal Officer is here).

The email will contain what you need to know about the returned debit. We'll automatically attempt a redebit on the same day we receive the return notice from the bank. Your payroll service will be on hold for 5 business days, to make sure the redebit goes through. You'll get another email from us letting you know if it was successful or not. If it is, you don't need to do anything else - we'll remove the hold and go back to business as usual.

If the auto-redebit was unsuccessful, there will be wire instructions in the email you receive letting you know. Have your Principal Officer use those instructions to have your bank complete a wire transfer. After we receive it, the hold will be removed within 1 business day.

If you are on same-day, next-day, or 2-day funding, your employees were still paid. However, if you're on 5-day funding, your employees were not paid, and you should consider paying them with a cheque. 

You can learn more about resolving NSF holds on your payroll account in our guide.

What could go wrong: My employee’s payroll information is wrong

Whether the’ve moved, changed their name, or it’s a simple error, correcting your employee’s payroll information in QuickBooks Online is a simple task:

1. Go to Payroll and select Employees.
2. Select the employee's name.
3. If you don’t see your employee, change the filter on the employee list.  Above the employee list select the dropdown  and choose Active Employees, Inactive Employees, or All Employees. 
4. Select Edit on the section you want to update.
5. Edit their info and select Done.

You can also change an employee’s information while you run payroll, if needed. Check out how to edit or change employee info in payroll.

What could go wrong: A payroll item seems to be missing

When setting up payroll and entering company or employee prior payroll totals, pay types, deductions, and taxes listed should match those that you had in your prior payroll solution. There are a couple of reasons why this might not be the base.

First, the pay type, deduction, or tad item may need to be added. Select Cancel on the prior payroll totals page and return to the employee’s profile to make your changes.

Second, the payroll tax might have a different name, such as Federal Withholding being listed as Federal Income Tax or FIT. Look for a possible alternate name for the item.

If you need to set up a prior payroll, you can do so by following these steps. 

What could go wrong: I’ve been told there’s an urgent issue with my payroll account

If your payroll service is on hold for an urgent issue, you'll be notified either through a message while trying to run payroll ("Your account is on hold, contact us") or through an email we've sent you.

It likely means that there's a payroll transaction we'd like to look at. Often, we are trying to protect you from potentially fraudulent transactions. The email will explain everything you need to know, as well as any documents you may need to send.

Since you won't be able to pay workers until the issue is resolved, follow the instructions in the email as soon as possible. Once we receive your documents, we'll review your case and get back to you within 2 business days to let you know if the hold has been removed.

You can read some FAQs about resolving urgent issues with your payroll account here. 

What could go wrong: I’ve overpaid my payroll tax

If you have overpaid payroll tax, you will receive a credit notice from CRA. Make sure it's valid, and then resolve it in-product: 

1. Select Taxes from the left-side menu, then select Payroll Taxes.
2. Select the Pay option in the Actions column.
3. Review the Taxes section and select Pay Taxes to check the overpayment. Overpayments appear as negative amounts.
4. Select Resolve Overpayment next to the negative amount. It displays the breakdown of the taxes.
5. Select one of the following two options:
• Refund: Select this option if you prefer to get a refund. Note that you still need to contact the CRA to acquire the actual refund.
• Apply to Next Period: Your overpayment will be applied to the next liability period.
6. Select Save to complete the process.

What could go wrong: My timesheet hours are not transferring to payroll

To ensure that timesheet hours transfer correctly, double-check your payroll settings. Here's how:

1. Select the Gear icon.
2. Select Payroll settings.
3. Select Time Sheets from the Employees section.
4. Select Copy hours from employee time sheets.
5. Select OK.

The weekly timesheets that you enter will now pull directly into QuickBooks for the appropriate employees.

That’s it for today! While we hope you never experience any of these problems, we’re here to help if you do. Stay tuned for more What could go wrong content to help you prep for tax season - even in the worst-case scenario.