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Established Member

Switching from outsourced payroll to in house payroll mid year

Good afternoon. I am a bookkeeper and have a client that has been outsourcing their payroll to a service, which also submits the liability payments on their behalf. They want to switch to in house payroll using QB desktop. How best do I account for the historical payroll transactions, so that the employees have the correct total listed in their "employee record" when it comes time for year end W-2 preparation? I am familiar with the journal entry process that would normally be used for outsourced payroll, but since I need the individual names and amounts in QB, that doesn't seem like an accurate solution. 

Thanks so much

1 Comment
QuickBooks Team

Re: Switching from outsourced payroll to in house payroll mid year

Hi there, @JBU.


You can set up your employee's Year-to-Date (YTD) to correct their amounts on the W-2. I'd be glad to guide you through the steps.


To properly record their YTD, you can follow the steps below:

  1. Click on Help from the menu bar.
  2. Open the Setup YTD Amount window by pressing Ctrl + Shift + Y on your keyboard.
  3. Click on Next.
  4. Enter the date you want your YTD entries to affect accounts, then click on Next.
  5. Enter the first payroll date of your employees.
  6. Click on Next.
  7. Enter the YTD summaries for your employees.
  8. Click on Next to close the Employee Summary Information window.
  9. Enter tax payments already made from the beginning of the calendar year.
  10. Click on Finish.

You can read these articles for more details:

You can always let me know if you have any other concerns. I'll be around to help you.