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Add employees in QuickBooks Online Payroll

by Intuit•8• Updated 3 days ago

Learn how to set up a new employee in QuickBooks Online Payroll. This process involves gathering their personal and tax information and entering it into their employee profile.

This article is for customers who use QuickBooks Online Core, Premium or Elite Payroll.

Before you begin

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

  • 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.


Add your employee and enter details

You can set up basic info and invite your employee to add the rest, or you can follow these steps to add all their info:

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Select Add an employee. 
  3. Add your employee’s name, email address, and hire date. 
  4. Select Add employee.
  5. Go back to the employee list and select your new employee to open their profile.
  6. Complete each section of the employee's profile. Select Start or Edit for a section to add or change info.

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.

Follow this link to complete the steps in product Open this link in a new window

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

Follow this link to complete the steps in product Open this link in a new window

  1. Select your employee.
  2. Select Edit to open the Employment details section.
  3. Enter the employee’s Hire date.
  4. If needed, replace the auto-generated Payroll ID with the employee's own.
    Notes:
    • 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 to new employees.
  5. Create or add a Pay schedule, and specify a Manager and Department.
  6. If the employee is paid irregularly, 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. 
  7. Enter any more details as required and select Save.

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

Follow this link to complete the steps in product Open this link in a new window

  1. Select your employee.
  2. Select Start to open the Tax information section.
  3. Enter the employee’s National Insurance (NI) number.
  4. Select a Starter declaration: indicate if it’s the employee’s first job, only job or if they have another job or pension. 
  5. Enter the Tax code based on their P45 form, unless it’s from a different tax year. 
  6. Enter the applicable NI letter (A is the most common) and provide evidence if using a different letter.
    Notes:
    • NI letter changes mid-tax year are allowed for regular employees but not for company directors. For directors, either switch to Premium or Elite Payroll or update the letter at the start of a new tax year.
    • If the employee is eligible for a Freeport or Investment Zone NI category, select one of the following NI letters: Investment Zone: N, E, K, D or Freeport: F, I, S, L. To apply the correct NI relief, make sure to provide a valid Freeport or Investment Zone postcode when one of the above letters is selected.
  7. Select a Tax calculation method:
    • Cumulative for year-to-date basis.
    • Week 1/Month 1 for pay-by-pay basis. 
  8. If applicable, select the Company director checkbox, then enter the Appointment date and Director calculation method. 
  9. Select Save. 

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

Follow this link to complete the steps in product Open this link in a new window

  1. Select your employee.
  2. Select Edit to open the Payment method section.
  3. Select the Payment method from the dropdown and select Save.