Setting employee opening balances in QuickBooks Advanced Payroll

If you’re moving your payroll from another system mid-tax year, you may need to set employee opening balances for leave entitlements and year-to-date (YTD) payment figures.

Opening balances are used only for the current tax year. They help QuickBooks calculate cumulative pay, PAYE, and National Insurance contributions correctly by combining your existing figures with new pay runs.

This article is for customers who use QuickBooks Online Advanced Payroll.

Set opening balances

1. Open the employee record you want to update.
2. Select Opening Balances from the menu on the left.
3. You will see seven tabs for different types of balances:

• Leave Balances
• Earnings
• Deductions
• Pension and PAYE
• National Insurance
• Previous employer

Leave balances

• Enter the employee’s leave balance as of the date you start using QuickBooks.
• Partial hours should be entered as a decimal (e.g., 6.5 hours), not HH:MM (e.g., 6:30).

Earnings

• Enter the year-to-date gross earnings for the financial year.
• QuickBooks shows default pay categories. To use a different category, add it before entering opening balances.
• Adding total hours is optional.

Deductions

Enter year-to-date deductions for the financial year.

Pension and PAYE

Enter year-to-date amounts for:

• PAYE tax
• Student loans
• Pension contributions

National Insurance (NI)

You will need the employee’s NI information from your previous payroll system:

• NI category
• Gross pay for NI calculations (NI-able)
• Employee NI contributions YTD
• Employer NI contributions YTD
• Gross amounts at LEL, LEL to PT, and PT to UEL

You can use HMRC's calculators to double check that everything is calculating correctly:

• NI contributions
• PAYE tax
• Student finance