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Adding an employee in QuickBooks Online Advanced Payroll and QuickBooks Bureau Payroll

SOLVEDby QuickBooks14Updated December 08, 2023

There are a few things you need to do before you can add an employee to your Advanced Payroll. First, you need to have their personal information like their name, address, National Insurance number and so on.

You'll also need their employment information such as their start date, job title and salary. Once you have all of this information, you can then follow these steps to add the employee to Advanced Payroll.

To add an employee in Advanced Payroll

  1. Go to Payroll, and select the Employees tab.
  2. Select Add employee.

Step 1. Enter the employee's basic details

  1. Enter the employee's personal information.
    • Title
    • First, middle and surname
    • Previous name
    • Date of birth
  2. Enter the employee's contact information.
  3. If you like, you can turn on self-service to allow employees to view their payslips, manage their personal details and apply for leave.
  4. Select Next.

Step 2. Enter their employment details

  1. Select the date your employee starts.
  2. Select the employee's gender.
  3. Select the primary location of employment.
  4. Choose their pay schedule.
  5. Enter the pay rate and if it is to be paid per annum, day or hour.
  6. Enter the number of hours they'll normally work per week.
  7. If applicable, select Employee is paid irregularly.
    • When reporting employees via RTI, you need to report how many hours they regularly work. This is done by using the following statuses:
      • A if less than 16 hours
      • B if 16 hours to 23.99 hours
      • C if 24 hours to 29.99 hours
      • D if 30 hours or more
      • E if you don't pay your employee regularly.
        Ticking this option will submit "E" on the employee FPS regardless of the number of hours they have worked.
  8. Select the pay category you will pay your employee with.
  9. Select if you're using a leave allowance template or select No leave allowance if you're not using one.
  10. Select from the dropdown menu if you're going to use timesheets.
  11. Select Next.

Step 3. Enter the employee's banking details

  1. Select the account type based on the payment method you are using for the employee. These are the different account types:
    • Electronic – the account is designated for electronic payment via Payment. It will be included in any Payment files that are produced out of the pay run.
    • Manual – the sort code/account number is recorded and although payments to this account will not be included in any Payment files that are produced, these payments will be displayed in any payment related reports (for example the payment history report and the pay run audit report).
    • Cash/cheque – no bank details are recorded.
  2. Select Next.

Note: Pay runs are not paid automatically. It is your responsibility to pay the employees, either through manual payment or by downloading a payment file and uploading it to your internet banking provider.

Step 4. Enter the employee's tax and NI details

  1. Enter their payroll ID–if the employee has been included on a previous FPS file to HMRC you must use the same payroll ID.
  2. Select whether the IR35 rules apply.
  3. Choose the employee statement. If the employee has previously been reported (for example, you're just changing systems and you are transferring their details to this system) you need to tick the box to say that this employee has previously been reported.
  4. Enter the tax code.
    • If you're using a week one/month one code, tick box otherwise the code will default to cumulative. 
    • Don't include the X at the end of a tax code. For example, K325X should be entered as K325.
    • The X tells you to use the calculation method W1/M1.
    • The QuickBooks tax code notification feature automatically updates employee's tax codes without the need to manually the new tax code.
  5. Tick the box if the employee has student or postgrad loans.
  6. Enter the employee's National Insurance number. If unknown, tick NIN unknown (NINO).
  7. Choose the NI category.
  8. If the employee is a company director, tick the box.
  9. Select the employee type. If the employee is:
    • An existing employee, enter the opening balances.
    • A new starter, enter the employer PAYE reference, leaving date and total tax to date. You'll see an alert if the total tax to date stated does not match the total tax calculated. Select Check to compare the calculations.
      Note: P45 information will not transfer onto the current payslips for this employment.
  10. Select Next.

If you have enabled the 'IR35 contractors' option under HMRC settings, then the IR35 contractors option will be available for you to set, when creating employee records. You should have already used HMRC's Check Employment Status for Tax (CEST) tool, in order to find out the tax status of a new contractor:

IR35 Intermediaries legislation does not apply to this engagement

When you have completed the CEST check and this status has been returned, the software option chosen should be 'IR35 contractors' legislation does not apply', this contractor should continue to have their invoices paid in full, via the finance system.

IR35 Intermediaries legislation applies to this engagement

When you have completed the CEST check and this status has been returned, the software option chosen should be 'IR35 contractors' legislation applies', this contractor should have their invoices paid through your payroll, so that you can deduct tax and National Insurance from the work element of their pay.

Step 5. Add a pension scheme

  1. Select the assessment method.
  2. Enter the relevant details.
  3. Select Next.

And that's it! You've successfully added a new employee. Select Home to do back to your payroll dashboard.

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