Set up guide for QuickBooks Online Advanced Payroll

As any business owner knows, managing payroll can be a time-consuming and complex task. QuickBooks Online Advanced Payroll helps you streamline this process by integrating with your existing QuickBooks Online account.

QuickBooks Online Advanced Payroll offers a lot of features that can save you time and hassle when it comes to managing your payroll. Most notably, it lets you manage your timesheets, pensions, and payroll all in one place. It also offers a number of automated features that can help to keep your payroll accurate and up-to-date.

In this article, we'll show you how to set up QuickBooks Online Advanced Payroll so you can get your business up and running quickly and efficiently. We'll also include links to more helpful guides.

Before you begin

There are a few important details you'll need to gather first. This information can be found in your own records, from previous payroll providers (if applicable), or from HMRC.

• Your company information
• Government Gateway credentials and PAYE reference from HMRC
• Employee information – name, date of birth, email address, National Insurance number, bank details and so on
• Employee start date, pay schedule and salary
• Pay history. You won't need this if you haven't paid anyone in the current PAYE tax year.
• Pension provider and information

Set up Advanced Payroll in QuickBooks

First, you'll need to sign in to QuickBooks and select the payroll plan that's right for your business. To do so:

1. In QuickBooks, select Payroll.
2. Select Get started.
3. Select the Advanced Payroll plan.
4. Select Begin setup.

Add your business in QuickBooks

1. Enter your Company Registration Number (CRN).
   If you don't have a CRN?, manually enter your business name and postcode as well as the name and email address of the person who'll get communications about payroll. The payslips sent to employees will also come form this email address.
2. Under the payroll information section, select your standard hours for an ordinary working week, how often you pay your employees and the industry you work in.

Set up your HMRC settings

1. Go to Payroll.
2. Select the Payroll Settings tab.
3. Under Business settings, select HMRC settings.
4. Enter your employer PAYE reference number.
5. Enter your Accounts Office Reference number.
6. If you qualify for small employers' relief (SER), select Yes, and then the tax year.
7. Select Yes if you'd like to make RTI (Real Time Information) submissions to HMRC.
   Tip: When you enable test mode, QuickBooks will send a 'non-filing' notification to HMRC every time you make a submission. This is a good way to check that everything is in order before you make a real submission. Remember to switch this off before you make a real submission.
8. Select a date to submit your monthly EPS (Employer Payment Summary) automatically. If you select Don't submit automatically, you can get an Employer Payment Summary Report by going to your Payroll settings and then Reports.
   Note: If you're expecting a refund from HMRC, you'll need to provide them with your bank account details so they know where to deposit the money. Learn more about EPS submissions in QuickBooks.

Manage user permissions

Learn how to add and edit user permissions in QuickBooks Online Advanced Payroll. We'll also show you how to export all user permission settings so you can keep a backup handy.

Customise employee payslips

Want to add a personalisal touch to your payslips? You can easily customise your payslips by adding your company logo and choosing which information to display. You can even add a personal message to be included in payslip notification emails.

Set up your chart of accounts

You'll want to make sure your payroll expenses and liabilities are organised correctly. To do this, you need to set up your chart of accounts. This can be done by customising the default settings to fit your business.

1. Go to Payroll.
2. Select Payroll settings.
3. Under Business settings, select Chart of accounts.
4. Select Default Accounts.
5. Select the settings you'd like to change. You can choose to split each account by location–make sure you set up location tracking.

Follow these steps again for pay categories, deduction categories, and expense categories. Learn more about the chart of accounts in QuickBooks Online.

Set up pay schedules

You'll need to decide how often you'll be paying your staff, and whether you'll have different schedules for different employees. Here's how you can add, edit or delete pay schedules.

Add your first employee

Adding employees manually may be the most time-consuming method, but it allows for the greatest degree of control over employee information. Follow these steps to add your first employee.

Importing a list of employees from an Excel spreadsheet is a quick and easy way to add multiple employees at once.

Alternatively, you can invite your employees to use the setup portal. All you need to do is invite them into QuickBooks and they will receive an email with a link to follow. The employee can then fill in their details and you will be notified via email when they have completed this process. You can finish setting the employee up by adding their employment and pension details.

Invite your employees to use the WorkZone app

The WorkZone app is a great way for employees to submit leave requests and expenses, log timesheets, and access workplace documents like payslips. It's quick and easy to use, and it's a great way to stay organised.

If you want your employees to be able to access the WorkZone app and take advantage of its many features, you'll need to set up and grant them access to the employee portal first.

Add pay history

If you're moving to Advanced Payroll from another software during the PAYE tax year, you'll need to set up opening balances for leave entitlements and year-to-date payments for your employees. This is so that the correct information can be reported to HMRC. QuickBooks will add these figures to the pay run and work out the PAYE and National Insurance contribution on the whole amount.

Set up pensions

Pensions are an important part of retirement planning, and getting them set up correctly is crucial. With PensionSync, you can easily integrate your pension scheme with Advanced Payroll and automate your pension reporting.

Before you can set up pensions manually, you'll need to have set up your pension scheme with your pension provider and know which taxation method is being used–you can get this from your pension provider. If you're not sure which provider to choose, The Pensions Regulator can help.

Create and finalise a pay run

It's time to create your first pay run in Advanced Payroll! When you've created a pay run, you'll see the breakdown of the payments. Next to an employee's name, you can see more details including their rate of pay, National Insurance, pension and so on.

Report your FPS and EPS to HMRC

After you process payroll, you will need to send an FPS (Full Payment Summary) to HMRC on or before pay day. Before you make a submission, make sure your RTI details are correct in your HMRC Settings.

Unlike FPS filings, an EPS (Employer Payment Summary) filing is created for specific reasons and might not be required every month or at all. Find out when you need to submit an EPS.

Run reports in Advanced Payroll

The P32 report shows all monthly payments owed and already paid to HMRC in a financial tax year. This can include PAYE, National Insurance contributions, deductions and more.

The gross to net report will show you how much money your employees are taking home, after taxes and other deductions are taken out. For more info on how to access and run the different payroll reports, read this.

Want to save time? Report packs are bundles of reports that can be generated at any time, or sent to a list of email recipients either at specific times or on a schedule.

Paying your employees

Paying your employees is one of the most important aspects of running a business. QuickBooks can help you run payroll, but you'll need to arrange payment outside of QuickBooks.

If the bank account you are paying your employees from is linked to your QuickBooks Online account, the details will be automatically uploaded. If not, record the details manually.

Liabilities owed to HMRC

Advanced Payroll will calculate all of your tax and National Insurance contributions for you, and automatically post the journal. You will need to make the payment. It's also important to keep a record of payments you've made yourself. You can also run a report for HMRC liabilities, so you always know where you stand.

Payments to pensions providers

Advanced Payroll will calculate your pension contributions for you, but you're responsible for making the payment. When you finalise your pay run, you'll be given the option of downloading a file with details of the payments that need to be made.

Need more help?

Check out the Advanced Payroll hub for more helpful articles.