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How to run payroll in QuickBooks Online Standard Payroll

From creating a pay run to sending employee payslips, learn how to pay your employees in QuickBooks Online Standard Payroll with ease. Before you run a regular pay run, there are a few things you need to do.

If you're employing people for the first time

  • Make sure you've registered with HMRC as an employer.
  • HMRC will send you a PAYE reference and AO (Accounts Office) reference.
  • You will get a Government Gateway password and username, which you will need as part of your company setup in QuickBooks.
  • You will need to add your employees, so make sure you have all their personal information such as their full legal name, address, date of birth, National Insurance number and email address.

Once you have set up your company and employees in QuickBooks, you're now ready to run your first payroll. If this is your first time, here are some helpful articles to get your started:

When you’re all set up to run payroll, you’ll see Complete next to Payroll Status and RTI Status.

Create a pay run

First make sure you've finished setting up all the employees you want to pay. Note: If an employee is marked as incomplete on the employee list, you can go into their settings to check and edit their details so they will show up as complete.

  1. Go to the Employees or Payroll menu, then select Payroll.
    Important: Make sure you've finished setting up all the employees you want to pay today. If an employee is missing some details and we need to create their payment or submit their RTI to HMRC, they won’t show up in the list when you run payroll.
  2. ​Select Run payroll.
  3. Make sure all of the employees you want to pay are listed.
    Note:  Select the slider next to a name if you want to remove the employee from this payroll.
  4. Double-check that the pay date. If you want to change it, select the date and then choose another. Remember, the pay date must be within the tax period.
  5. ​Enter number of hours worked/salary amount. Or enter the additional pay details (like additional pay lines and/or deductions) for each employee if needed. To do so, select Edit next to the employee's name.

    Click Add/Edit a bonus or other payment to see the list of options available. You can also add the pay type in the employee profile.

    Any pay type that has a default amount will show up in the employee payment. For example, if an employee is set to receive a monthly car allowance of £100. You can edit the amount of the payment for the current pay run, but you'll need to edit the employee profile if you want to change it for future payments.

    In the Edit menu on the pay run, click Add/Edit a deduction and select the type from the options available. Or add a deduction in the employee profile. Enter an amount (or percentage) in the employee profile. You can edit it when you run payroll.

    If the employee is paid hourly, the default number of hours is set to 1. Enter the number of regular hours the employee worked during the pay period.

    Paying overtime? Add or customise other pay types in QuickBooks Online Standard Payroll.

    If the employee is part-time (that is, does not work a full week) and is on statutory leave, check the salary or hourly fields to make sure that this is calculated correctly. The statutory pay will be correct, but the salary or hourly pay might not be how you want to calculate it. Since there is no compliance requirement specifying the method of calculation, it is strongly recommended that you check the salary or hourly amount.

    QuickBooks Standard Payroll supports payroll calculations and assessments for Workplace Pensions under the automatic enrolment legislation. This means that the assessment is carried out when the payroll is processed. The PRP (Payroll Reference Periods) are based on tax periods.

    Every pay date, we carry out the assessment of the employees who aren't already enrolled into your workplace pension. If you're a brand new company and you'll have a duty start date, which will be the start date of your first employee. Alternatively, if you're a company who has been doing business before September 2017, you'll have a company staging date that is always at the beginning of each month.

    Your initial duty start date/staging date will determine your re-enrolment period which is approximately 3 years within the initial start date. To help you with auto-enrolment, QuickBooks will ask you to enter your duty start date/staging date.

    QuickBooks Standard Payroll does not support the alternate PRP method. Because QuickBooks uses PRP, the assessment on the company staging date is carried out in the tax period during the first day of each month that occurs.

    Take a monthly payroll with a staging date of 1 May for example. The initial assessment is on the April payroll because the tax period is from 6 April to 5 May. When you run your April payroll, employees who are eligible to be automatically enrolled will be highlighted. You have the option to postpone for up to 3 months or change their contribution.

    Note:

    • Beyond assessments of employees during a payroll run, there are alternative triggers such as a birthday. We look at these triggers during the relevant payroll run. For example, an employee with a trigger (such as a person turning 22 years old in May) will not be included in the April pay run with 30 April pay date, but will be part of the ongoing assessment of every payroll (May payroll onwards).
    • Something to look out for is if an employee has a mid-period trigger will be subject to the enrolment rules of the pension scheme you've chosen. If pro-rata pension is required, you will need to manually calculate and adjust the pension contribution accordingly. For example, an employee who turns 22 on 7 May could have to pay pension from this date or for the entire month. Check with your pensions provider to see which rules apply.
  6. Select Save and review to see a summary of this payroll.
  7. If you want to review the payslip, select the amount shown in the Net Pay column (shown in blue text) to see a draft of the payslip. You can save the draft payslips to your device or print them out.
    See any problems? Go back and make any changes before you submit the payroll.
  8. Select Confirm and submit to create the pay run in QuickBooks.

Once you complete these steps, QuickBooks automatically creates a journal entry for the pay run in the background for you. You can check the journal entry by using the search tool.

Journals that are automatically created reflect employee payments going out of your bank. If you have your bank feed connected to QuickBooks, you'll want to match the employee payments to the automatically created journals. If your bank isn't connect, you'll need to record the employees' payments.

Note: You won't be able to customise journal entries that QuickBooks automatically creates. However, you can select your Net pay account and journal entries can be manually edited once created.

Tip: You can double check that everything is calculating correctly by using HMRC's PAYE and NI calculator.

What's next?

Next you need to file the information with HMRC by submitting a FPS, which must be submitted before or on the pay date. If you have automatic filing switched on, you don't need to do anything else.

You then need to give your employees their payslips. A safe and secure way to do this is through the QuickBooks Workforce portal. Employees can sign in and view (and even download) their payslips from anywhere at their own convenience.

And the final step is paying HMRC any payroll liabilities that is owed for the given tax month. You can find the amount due in the Employee Payment Report, which can be found in under the Reports tab.

See also

Employees and payroll

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