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Adding employees in QuickBooks Online Core Payroll

SOLVED•by QuickBooks•4•Updated 7 days ago

Learn how to set up your new employee in QuickBooks Online Payroll Core.

Step 1: Get employee info

Before adding an employee to your payroll, make sure you have the following information readily available for that employee:

  • Their basic information like their name, email address, date of birth and contact info. 
  • Work location
    • Their last payslip and FPS (Full Payment Summary) submission
    • P11 Working Deductions 
    • Total taxable pay, total tax paid, and total pay subject to NI
    • Total NI paid by employee and your business, respectively
  • NI letter
  • Earnings at LEL, LEL to PT, and PT to UEL, which can be found on the P11 or latest FPS submission
  • Statutory Paternity Pay (SPP) or Statutory Maternity Pay (SMP) paid to date
  • Employee and employer pension contributions
  • Total payments towards student loans and postgraduate loans

Accurate reporting to HMRC is crucial. You can use the Starter Checklist for PAYE checklist or the employee’s P45 form.

Step 2: Add your employee

Now that you have the necessary documents, let's set up your new employee.

You can set up some info, then invite your employee to add the rest of their details. Or, you can follow these steps to add all their employee info. 

  1. Go to Payroll, then select Employees (Take me there). 
  2. Select Add an employee. 
  3. Add your employee’s name, email address, and hire date. 
  4. Select Add employee.
    Tip: If you want them to enter their own personal, tax, and banking info, make sure Employee self-setup is on.
  5. Select Start or Edit to any section to add the remaining employee info. 
  6. When you’re done, select Save.

If you need to make changes to an employee who is already in the system, see Edit or change employee info in payroll instead.

Step 3: Add employment details

Once you have added an employee in QuickBooks, you can proceed to enter their employment information. Select the relevant section to set up each area.

The info you enter here is crucial for payroll calculations and is required by HMRC. For instance, the employee’s gender determines their eligibility for statutory maternity/paternity pay, while their age determines their eligibility for automatic enrolment.

  1. Go to Payroll, then select Employees (Take me there). 
  2. Select your employee. 
  3. Select Edit to open the Personal info section. 
  4. Enter the following information:
    1. Title 
    2. Full legal name (not nicknames or familiar names. For example, David not Dave). 
    3. Email and home address 
    4. Date of birth and Gender 
  5. Select Save.

To ensure that an employee's profile is complete in QuickBooks Online, make sure to fill in all of their employment details. Otherwise, their record will show as incomplete.

  1. Go to Payroll, then select Employees (Take me there). 
  2. Select your employee. 
  3. Select Edit to open the Employment details section. 
  4. Enter the employee’s Start date. 
  5. If needed, replace the auto-generated Payroll ID with the employee's own. 
    • This is a unique number used by HMRC for employee identification and Real Time Information (RTI) and Full Payment Submission (FPS) submissions. 
    • Keep the same Payroll ID for the employee when switching from another provider to avoid reporting errors to HMRC. QuickBooks will assign a unique ID for new employees.
  6. Create or add a Pay schedule, and specify a Manager and Department.
  7. If the employee is paid regularly, select the appropriate option: 
    • No, if the employee is paid on a regular basis. 
    • Yes, if the employee will not be paid for at least three months. 
  8. Select Save. 

Adding an employee's tax information includes their tax code, student loan information, and pension scheme in order to calculate deductions.

  1. Go to Payroll, then select Employees (Take me there). 
  2. Select your employee. 
  3. Select Edit to open the Tax information section.
  4. Enter the employee’s National Insurance (NI) number. 
  5. Fill in the Starter declaration: indicate if it’s the employee’s first job, only job or if they have another job or pension. 
  6. Enter the Tax code based on their P45 form, unless it’s from a different tax year. 
  7. Enter the applicable NI letter (A is the most common) and provide evidence if using a different letter.
    • NI letter changes mid-tax year are supported for regular employees, but not for company directors. For company directors, move to Advanced Payroll or remain on the 'old' NI letter and change it at the beginning of the new tax year. 
  8. Choose the Tax calculation method: Cumulative for year-to-date basis or Week 1/Month 1 for pay-by-pay basis. 
  9. If applicable, select the Company director checkbox, then enter the Appointment date and Director calculation method. 
  10. Select Save. 

This is where you can specify the mode of payment for your employees, such as direct bank transfer, cheque, or cash.

  1. Go to Payroll, then select Employees (Take me there). 
  2. Select your employee. 
  3. Select Edit to open the Payment method section.
  4. Select the Payment method from the dropdown menu and select Save.

Pay types are additional pay items on top of your employee’s regular salary or hourly rate. You can add or change pay types like bonus, commission, overtime, benefits, and more. 

Learn how to add and change pay types.

You have the flexibility to set up weekly and monthly pay schedules for your employees. You can choose to have either one or both pay schedules, or even multiple schedules with the same frequency.

To learn how to set up pay schedules for each employee, refer to this helpful guide.

More help

Looking for guidance on navigating QuickBooks Online Core Payroll? Check out this resource page with how-to guides to help you.

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