How to use QB payroll to pay "my reasonable salary" as an S Corp

micabeach · ‎February 27, 2019

I am a single-member LLC filing as an S Corp for tax purposes. I'm using QB Simple Start. I have established my reasonable salary (e.g., let's say it's $100,000). My pay varies every month based on how much I work, my clients, etc. Multiple clients send me paychecks throughout each month. When I pay myself (e.g., using the payroll feature in QB Simple Start), am I supposed to send me a monthly check of $8,333 (i.e., $100,000 / 12)? What if I get paid less than $8,333 that month? After I send me my paycheck, can I still transfer funds from my business checking account to my personal checking account, or is that considered somehow going over the reasonable salary limit? I'm very confused how this is supposed to work and how QB's payroll is supposed to handle this. Thank you!

Rose-A · ‎February 28, 2019

Thanks for getting back to us, micabeach.

I'm here to provide you with some information on how you can handle a reasonable salary in QuickBooks Online.

You can enter the annual salary amount then QuickBooks will divide it by the number of the pay period in a year. You can create a salary item and you decide how much you want to pay for yourself.

Here's how to create a salary item:

Double-click employee's name or your name.
Click the pencil icon beside Pay to edit.
Go to How much do you pay (name of the employee) and click the pencil icon to edit.
Click the drop-down arrow and select Salary. You can leave the amount blank and enter it manually.
Hit Done.

You'll see some screenshots outlining the steps above.

If you require more information about QuickBooks Payroll, you can reach out to our QuickBooks Online Support. To reach us, please follow these steps:

Sign in to your QuickBooks Online Company.
Click (?) Help at the upper right corner.
At the bottom, click on Contact us.
Type in your concern then hit Continue.

I'm always here to help you out if you need further assistance. Have a good one.

View solution in original post

Charies_M · ‎February 27, 2019

Hello there, micabeach.

I'd be glad to guide you on how to handle your payroll concern.

If you paid an employee less than the normal amount of the monthly payroll, you can pay the remaining amount by manually creating a check.

Here's how:

Select the Plus icon (+) at the top.
Under Vendors, choose Check.
Fill out the necessary info.
Select Save and close.

I've got you an article to know more about creating check in QuickBooks Online (QBO): Enter a check issued manually.

By the time you need to match these transactions, you can just exclude the two amounts from your bank transactions and manually clear the payroll check from your register.

In case you need help from a live support, I'd suggest reaching out to our Customer Care Team. They'll be able to guide you through the whole steps.

Here's how:

Sign in to your QuickBooks Online company.
Click the Help icon in the upper right of the screen.
Select Contact US on the pop-up.
Enter what you're needing assistance with in the How can we help? field and choose Continue.
Click Get a callback.
Enter your contact information.
Select Call me.

If there's anything else I can help you with payroll, just let me know. I'm always happy to help.

micabeach · ‎February 28, 2019

My question had more to do with how to handle the "reasonable salary" requirement for my role as owner of the S Corp. Do I pay myself a fixed amount each month based on my annual reasonable salary (i.e., reasonable salary / 12 months), or can it vary each month?

Rose-A · ‎February 28, 2019

Thanks for getting back to us, micabeach.

I'm here to provide you with some information on how you can handle a reasonable salary in QuickBooks Online.

You can enter the annual salary amount then QuickBooks will divide it by the number of the pay period in a year. You can create a salary item and you decide how much you want to pay for yourself.

Here's how to create a salary item:

Double-click employee's name or your name.
Click the pencil icon beside Pay to edit.
Go to How much do you pay (name of the employee) and click the pencil icon to edit.
Click the drop-down arrow and select Salary. You can leave the amount blank and enter it manually.
Hit Done.

You'll see some screenshots outlining the steps above.

If you require more information about QuickBooks Payroll, you can reach out to our QuickBooks Online Support. To reach us, please follow these steps:

Sign in to your QuickBooks Online Company.
Click (?) Help at the upper right corner.
At the bottom, click on Contact us.
Type in your concern then hit Continue.

I'm always here to help you out if you need further assistance. Have a good one.

micabeach · ‎February 28, 2019

This is great. Thank you. One thing I've noticed is that all of the tutorials and screenshots I find for QB Online payroll do not match the screens I have for QB Simple Start + Payroll, so the steps are a bit different. But I was able to figure it out.

Rose-A · ‎February 28, 2019

Thanks for the quick response, micabeach.

Allow me to provide some information about QuickBooks Online Payroll.

Good to hear that everything is working fine on your end.

Regarding the video tutorials and screenshots, it's possible that the tutorials you found are using the old platform of QuickBooks.

Can I ask for the links so that I can verify the content and screenshots in the article? Once verified, I would be happy to update the video tutorials.

You may find this article helpful: All QuickBooks Tutorials.

In case you need assistance with QuickBooks, you can call our dedicated team who will be happy to assist you. To reach us, please follow these steps:

Sign in to your QuickBooks Online Company.
Click (?) Help at the upper right corner.
At the bottom, click on Contact us.
Type in your concern then hit Continue.

Don't hesitate to drop me a reply if you have additional questions about payroll.

micabeach · ‎February 28, 2019

Even your screenshots (which I assume are from the latest version) differ from my screens, and I'm using the most recent version of QB Simple Start + the payroll add on.

For example, my employee list screen looks like:

And my edit pay section looks like:

Rose-A · ‎February 28, 2019

Hello, micabeach.

I appreciate the screenshots you've provided. Let me share with you additional information about QuickBooks Online interface.

The QuickBooks Online versions have a different interface and have different options.

The QuickBooks that I'm using is QuickBooks Online Plus, the reason why the screenshots that I've attached is different from yours.

In my QuickBooks Simple Start, we have the same interface.

Additionally, you may find these articles helpful:

I've got your back if there's anything else I can help you with. Don't work too hard, have a good one.

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How to use QB payroll to pay "my reasonable salary" as an S Corp