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Level 1

Payroll Period - Once a year?

I want to pay an employee once a year for a period covering the entire year.  I don't see how to do that as there is no once a year option (gives options for weekly, biweekly, monthly, etc.).  I could set it up for a entire year to pay monthly and do it once (but the pay period would be wrong), but then I would have to delete every payroll transaction every month or set the employee to inactive (which I do not see the pencil as to how to do that in the 2018 version).

 

Please advise and thanks in advance!

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Best answer 11-23-2018

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Level 15

Payroll Period - Once a year?

Pay it out as a Bonus (one time) check. Make sure to follow the withholding rules for One time/Supplemental wage for Fed, and your State might have a similar requirement.

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Level 15

Payroll Period - Once a year?

Pay it out as a Bonus (one time) check. Make sure to follow the withholding rules for One time/Supplemental wage for Fed, and your State might have a similar requirement.

View solution in original post

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QuickBooks Team

Payroll Period - Once a year?

Good day, boxstermike.


Welcome to the QuickBooks Community. You've come to the right place, helping out with creating a one-time paycheck for your employee is my priority.


@qbteachmt’s answer is correct. When creating a bonus check, you have the option to pay the employee on a regular paycheck, separate paycheck, via gift certificate or cash bonus.

 

Bonus checks are subject to tax deductions including state and federal taxes. For the detailed instructions, check out this article and click on the link that best fits your bonus situation: Create Bonus Paychecks In QuickBooks Desktop Payroll.

 

QuickBooks doesn’t automatically calculate the state or federal withholding supplemental rate on bonus wages. To compute the supplemental rate for state or federal withholding, manually change the amounts calculated on the paycheck.


To give more insights about the Supplemental Wages, go to Section 7 - Supplemental Wages of Circular E, Employer's Tax Guide.

 

If you have additional questions about the Payroll feature, drop me  a line. I'll be around to answer them for you. Have a great rest of your day.

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Level 1

Payroll Period - Once a year?

Doing it as a bonus doesn't work because it sets the employee tax rate very high. ( I also tried other earnings with the same results) I guess it's thinking that a single payment amount in one month is multiplied by 12 to calculate the yearly tax rate. I tried it for one employee who I paid 22K for a single job for the whole year, and it put his tax rate at 54% when it should be around 13%.

 

As a previous software developer this seems like a pretty big bug. They need a "Yearly" choice on the period dropdown menu.

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Moderator

Payroll Period - Once a year?

Hello there, @Tom77

 

Based on the details you've provided above, it seems that you're using the online version. This could be the reason you're unable to see the yearly option when choosing a pay schedule. This is currently available in the desktop version as seen in the screenshot below. For more details, go through this article: Set Up and Manage Payroll Schedules

AnnualPaySchedule.PNG

 

I know the importance of having accurate tax rates when creating a bonus check or adding the other earnings type for your employee. With this, I'll take note of your suggestion and submit this directly to our Product Development Team. They can consider adding an annual option as a payroll schedule in the online version. I'd suggest visiting this website: Blog Posts. This link contains our latest news and product enhancements. 

 

Pay types have special taxability that can affect your employees, federal taxes, and payroll forms. For more details, visit this website: Supported Pay Types and Deductions Explained. You can also visit the IRS Publication 15 to learn more about your tax responsibilities as an employer. 

 

Additionally, please take note of the important dates and tasks when starting and completing the year-end payroll process. To help you prepare yourself, go through this article: Year-end Checklist

 

You can count me in if there's anything else you need. Happy holidays, @Tom77

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