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Level 1

Payroll during corona virus lockdown

Due to the corona virus lock down, our company has no income but still want to give $100 salary per paycheck. But after entering the proper amount in the employee payroll info's annual rate, the paycheck shows  the company have to pay CA and Federal income tax and 401K deduction and the net pay is negative 

 

How do you enter semimonthly pay of only $100 per employee?

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Best answer March 23, 2020

Best Answers
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QuickBooks Team

Payroll during corona virus lockdown

Hello there, @jkan

 

Thanks for visiting the Community today. I can imagine the impact this lock-down is having on small business owners like you. I'm here to help you enter a semi-monthly pay of only $100 per employee. 

 

First off, you'll need to set up tax exemption to your employees so it won't calculate Federal and State taxes. 

 

Here's how: 

 

  1. In the Employees menu, choose Employee Center.
  2. Double-click the name of the employee, then go to the Payroll Info tab.
  3. Select Taxes, go to the Federal tab. From the Filing Status drop-down, choose Don't Withhold.
  4. In the State tab, click the Filing Status drop-down and choose Don't Withhold or Exempt
  5. Click OK twice to save your selections.

 

You may repeat these steps to exempt each of your employees. Once done, set-up a semi-monthly payroll in the Payroll Center. Here's how: 

 

  1. Click Employees menu, then Payroll Center.
  2. Go to the Pay Employees tab. Then, from the Payroll Schedules drop-down menu, click New.
  3. Enter a name for the payroll schedule in the appropriate field.
  4. In the How often will you pay your employees on this schedule? drop-down, choose Semimonthly.
  5. Complete the pay period end date and the date that should appear on the paychecks for the pay period fields for all of your frequencies, then click OK

 

Your payroll schedule will now show in the table under Create Paychecks. Follow the steps in this link to assign it to your employees and run payroll as normal. 

 

Let me know if there's anything else I can help you with. I'm just around to give you a hand. Stay safe. 

View solution in original post

4 Comments
Highlighted
QuickBooks Team

Payroll during corona virus lockdown

Hello there, @jkan

 

Thanks for visiting the Community today. I can imagine the impact this lock-down is having on small business owners like you. I'm here to help you enter a semi-monthly pay of only $100 per employee. 

 

First off, you'll need to set up tax exemption to your employees so it won't calculate Federal and State taxes. 

 

Here's how: 

 

  1. In the Employees menu, choose Employee Center.
  2. Double-click the name of the employee, then go to the Payroll Info tab.
  3. Select Taxes, go to the Federal tab. From the Filing Status drop-down, choose Don't Withhold.
  4. In the State tab, click the Filing Status drop-down and choose Don't Withhold or Exempt
  5. Click OK twice to save your selections.

 

You may repeat these steps to exempt each of your employees. Once done, set-up a semi-monthly payroll in the Payroll Center. Here's how: 

 

  1. Click Employees menu, then Payroll Center.
  2. Go to the Pay Employees tab. Then, from the Payroll Schedules drop-down menu, click New.
  3. Enter a name for the payroll schedule in the appropriate field.
  4. In the How often will you pay your employees on this schedule? drop-down, choose Semimonthly.
  5. Complete the pay period end date and the date that should appear on the paychecks for the pay period fields for all of your frequencies, then click OK

 

Your payroll schedule will now show in the table under Create Paychecks. Follow the steps in this link to assign it to your employees and run payroll as normal. 

 

Let me know if there's anything else I can help you with. I'm just around to give you a hand. Stay safe. 

View solution in original post

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Community Champion

Payroll during corona virus lockdown

The proper rate for bimonthly pay for $100 gross is an annual salary of $2400. There will be state and local taxes but they are based on the current salary you enter of $2400 , not on previous rate.

 

If you want them to receive a net $100 per paycheck you have to gross it up such that the gross minus taxes equals $100.

 

If everyone is getting the same an easier way might be to add a per diem rate of $100.

 

Caution. This $200/month you want to give out might affect, in some states, the amount of UC they receive and could result in them actually receiving less.

 

You cannot just "gift" them the $100 twice per month as a non-expense as there are stupid IRS rules that get in the way.

 

BUT -- an individual who is not your company or not the owner could gift them this non deductible non taxable stipend. Any individual can gift any other individual quite a substantial amount annually before gift tax comes into play.

 

 

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Level 1

Payroll during corona virus lockdown

For paid leave I need to turn off local withholding of the WBFA taxes in Oregon.  All I see on the Other tab is delete.  Nothing that says don't withhold.  Do I just have to delete and then restore if they come back under normal payroll later?

Highlighted
Moderator

Payroll during corona virus lockdown

Hello WP61,

 

Yes, we can Delete the payroll tax item in the Other tab and restore it.

 

Though we can do that within QuickBooks, I'd still recommend reaching out your accountant about this. They know what's best for you and your business setup.

 

Let me know if you need anything else.

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