Salaried Employee Rate Change

Hi there, StefL10702.

Currently, there's no way to update the employee's salary on the previous payroll. You'll need to adjust the new salary when the new pay takes effect. Then, I suggest going to the Employee Center so you can start updating the wage.

Here's how:

1. Click the Employees menu at the top and select Employee Center.

2. Double-click the name of the specific employee to open their information.

3. Choose the Payroll Info tab at the left pane.

4. On the Earnings section, enter the updated employee's salary under Hourly/Annual Rate column.

5. Hit OK.

I attached a screenshot below for visual reference.

Once done, you can refer to this article on how to run a report that tracks the employees' pay rate changes over a period of time: Employee Pay Adjustments History Report.

Please refer to this article on how you can deliver each pay stub as a PDF to your employee’s email address: Email pay stubs from QuickBooks Desktop.

I'm a post away should you need anything or have any questions. Have a good day!

In this case for one payroll you'll need to manually calculate the salary and enter it on the paycheck as you create it.  Add 1/2 of the salary change to the prior salary and override the default on the paycheck.

@ChristieAnn  

"Currently, there's no way to update the employee's salary on the previous payroll."

??  Well, there is, but that's not an answer to the OP's question.

To update the salary on an existing paycheck edit the paycheck and change the salary.

I need to decrease an employee's slaray by 25%. So I calculated what we have paid so far and then what we had remaining. Took that remaining number and reduced it by 25% and was going to enter that into the payroll detail for the employee.

I was told by our treasurer that QuickBooks would divide that number by 24 pay periods, not 11 (the remaining pay periods in this year for this employee). They said I had to actually go in and figure 75% of salary their salary number from the beginning of the year and divide that by 24 pay periods and enter that number into the new payroll detail for the employee in question. Is this correct? Would Quickbooks have divided the 25% number by 24 and not 11 - the remaining pay periods left in this year?

This is crucial that I get this correct for a number of reasons, one of which being another payroll item we offer is based on a percent of salary so it does matter which number I use (25% or 75%).

Thank you for your help

I appreciate you for letting us know the results of the steps you've done, churchgirl.

I will make sure that you can decrease the employee's salary to 25%.

You can delete and then recreate the paychecks you'll need to correct. Also, you can set up the rate if you have manual or paper checks only.

If this is a direct deposit, you can make an internal agreement with the employee to adjust 75% of their salary. Then, divide it by 24 pay periods and enter the number into the new payroll detail.


Here's how to delete/void a check.

1. Always create a backup.
2. Click the Employees drop-down menu.
3. Select Edit/Void Paychecks.
4. Highlight the check-in question and hit on Void.
5. In the pop-up window, enter "yes" and click Void again.
6. Repeat all steps to the checks that need to delete.
7. Click Done.​​​​​​​

I've also included this link to help you on how to recreate a voided check: Recreate a missing or voided direct deposit paycheck in QuickBooks Desktop Payroll.

You can check this article that can help you review your payroll summary: Create a payroll summary report.

I'm just here if you have additional questions about managing your payroll. I'm always here to help. Have a good one!

Thank you, DebSheenD!

This is a direct deposit payroll. :-) So even though we only have 11 more pay periods left this year I still divide the new salary by 24 is what I understand. So say the old salary was 51597.00 x 75% = 38,697.75 * 24 = 1612.40. So I could expect in this example to enter the 38,697.75 in the earnings area of the payroll information for this employee and QB would automatically know to pay this over the next 11 pay periods? I have to say what is catching me is that the paycheck amount is divided by 24 but we don't have 24 pay periods left. Why not divide it by 11?

Thanks for getting back to this thread, @churchgirl. Let me clarify things for you. 

The amount of paychecks is divided by 24 because this is the payment period you use in QuickBooks. For more information about this, feel free to review this article: Set up and manage payroll schedules.

Handling a salary decrease in QuickBooks Desktop is quite critical. If you need to adjust the employee's salary for a certain period, update the annual amount on the employee's profile. This way, it will show the right amount.

In addition, let me share this helpful article to guide you create and send direct deposit paychecks to your employees: Send payroll and direct deposit paychecks in QuickBooks Desktop Payroll. 

In case you'll need to create a direct deposit offset item, I encourage you to open this link for the steps: Generate a direct deposit offset item in QuickBooks Desktop Payroll. This is necessary for recreating direct deposit paychecks that have already been sent to the employees' accounts but are missing in the register. 

Let me know in the comment section if you need more help understanding payroll processes in QuickBooks. I'll be happy to assist you always. 

Hi Rubielyn_J,

Thank you for your reply. I must not have expressed my question clearly and for that, I apologize. I understand the why behind dividing the salary by 24 at the beginning of the year. My question is why do we still divide it by 24 when there are only 11 pay periods left in this year?

The new salary will be going forward so I don't have to recreate any paychecks or correct any past paychecks. I just want to make sure I am very accurate with my input of numbers going forward for the next paycheck to be 100% correct for this employee.

Thank you so much for your help!

Hey churchgirl, 

Thank you for providing some clarity. To answer your question, QB set up salary items as yearly salary in the payroll item list, hence why we have to enter the annual amount even though it's only 11 pay periods.

If you have additional questions, let me know! I will be on standby! I hope you have a nice day!

Hi SashaMC!

Gottcha! Thank you for answering my question. At times I am 100% sure of my steps and understand QB is probably smarter than I give it credit for, and then...my mind starts rehashing and I get myself convinced I have done it incorrectly or my logical mind buts in. Thank you to the QB community for answering my questions and verifying I did it correctly. I sure appreciate the sounding board. When it comes to paying I don't want to mess it up for the employees, causing hardship for them and extra work correcting numbers down the road for myself.

Have a great 4th!

I totally understand and you are welcome, churchgirl! Please don't hesitate to let us know if you have any concerns or problems. Have a great 4th as well! 

@BigRedConsulting I am coming across a similar situation as ChurchGirl and I am hoping you can help. We have pastors who are making an appropriate change in their salary due to a change in their housing allowance. I basically need to reduce their salary amounts then increase their housing allowances (listed as an addition item). I did this for one pastor and I realized it was wrong when his salary was over for the month. In reading. I am realizing that we can't just do the simple math and subtract what they have already been paid and use that remaining number as their salary in the middle of the year. What would you suggest in this situation?

@ALwood 

I don't think your case is unusual, though the reason behind it is. It's quite normal to change an employee's salary mid-year. Typically an employee will get a raise mid-year and you'll want paychecks going forward for the rest of the year to reflect the raise.

At the same time, QuickBooks (rather unfortunately) wants you to input an annual salary amount. This is true even though technically there is no such thing as an annual salary, at least in the USA. Salaries are fixed per-payroll-period, in a similar way that hourly wages are per hour. This is why professional companies quote a salary to the employees per period, like "Your salary every two weeks is $2000" and then they sometimes add, "which is about $52,000 per year." (It is about $52,000 per year, and not exactly $52,000 because there are not exactly 52 weeks in a year. But it is, exactly $2000 per pay period.)

So, when an employee's salary changes, then to update QuickBooks so that it pays the new salary in the following pay periods, enter the new annual salary as a product of the new per period salary * the standard number of periods in the year - based on your pay period. For example, for monthly multiply the per period salary by 12, bi-monthly by 24, every two weeks by 26, and weekly by 52. Going forward, QuickBooks will then divide the annual salary by those same standard amounts, depending on the pay period, arriving at the correct pay period salary for each new paycheck. This change will only impact paychecks going forward, and does not depend on or use any prior salary amount paid.

I change the rate, and as soon as I click on something else, it reverts back to the wrong number.

Good day, @999234.

Can you share with me what did you click when changing the rate? Any further info would be much appreciated. 

You can also provide us with a screenshot of your concern. That we can replicate it in our end and give you the right answer for your payroll concerns.

Please add your details in this thread and we'll get back to you. Have a good day. 

When I opened the paycheck detail, the rate was wrong, total was wrong, so.... the paycheck etc would be wrong unless I changed the rate back to the correct amount.  I could not make the change and have it stay.  Every time I clicked on SS or withholding the rate would change back to the wrong amount.

Finally, out of frustration, I restored the QB file from backup and the correct rate was there, the paycheck was correct.  Didn't know what else to do.

I appreciate your follow-up response, 999234.

Restoring the QB file from the backup is one of the ways to isolate this issue. We can also run the Verify and Rebuild Data within your company file to fix it and other issues you're experiencing in QBDT. If you haven't tried it yet, we can follow these steps.

1. Go to the File menu.
2. Select Utilities.
3. Click Verify Data. Then, select OK to close all windows.
4. Then, go back to the File menu.
5. Select Rebuild Data under Utilities.
6. QuickBooks will ask you to make a backup before rebuilding your company file. Then, select OK.
7. Once done, click OK.

Then, let's review the rate from your employee's profile. If it's correct, we can recreate the paycheck. To get more information about creating paychecks in QuickBooks Desktop, please refer to this article: Create paychecks.

Once done, we can then open the Payroll Detail report again and customize it to display to correct data. For more info about payroll reports and tracking your employees' wages in QBDT, we can visit these articles: 

• View and print payroll reports.
• Customize payroll and employee reports you open.

I want to know how these recommendations work for you at this moment. If you have other QuickBooks concerns aside from correcting paychecks and payroll reports, please feel free to add another post below. I'm here to help you anytime.