Using Manual Payroll to Enter Prior Year Paychecks

Let me share some information about how processing manual payroll works in QuickBooks Desktop (QBDT) Payroll, @PYBK784.

You can still use the Manual Payroll feature even with the existing payroll service. To begin, let's set up a manual payroll first. Here's how:
 

1. Go to the Edit menu, and choose Preferences.
2. Select Payroll & Employees, then click the Company Preferences tab.
3. In the QuickBooks Desktop Payroll Features section, choose the Full payroll and the Manual Payroll checkboxes.
4. In the Get payday peace of mind window, click Next and then Activate in the confirmation screen.
5. Choose OK to apply the changes.
6. Lastly, select OK to exit out of the preferences window.

Once done, you can already enter your payroll manually by following the steps below:

1. Open the Help menu. Then, select QuickBooks Desktop Help.
2. From the search field, enter Manual Payroll and hit Enter.
3. Hit the Calculate payroll taxes manually (without a subscription to QuickBooks Desktop Payroll) link.
4. From the Set your company file to use the manual payroll calculations setting section, hit the manual payroll calculations link.
5. Hit the Set my company file to use manual calculations link.

For future reference,  you can visit the resources from this guide on how to perform any payroll activities in QuickBooks: Payroll guide.

If you have further questions or clarifications about using manual payroll in QuickBooks, never hesitate to ask below. The Community team is always here to assist. 

@Nicole_N thanks for the response!  Based on these circumstances, knowing that I need to enter a previous year's paychecks data (but only for data purposes because they were already paid out), is this the best method for data entry?

@Nicole_N thanks so much for the response!  Is this the best way to enter previous years paycheck data, especially since the checks have already been paid?  So far, using Manual Payroll is the only way I've found that could work, but I'm open to other suggestions if there is a better way.

Thank you for your prompt response, PYBK784. 

My colleague Nicole's answer works fine, but there's another way to record your previous year's paycheck data which is a backdoor process. 

Here's how:

1. From the Help menu, choose About QuickBooks.
2. Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
3. Press Next until you reach
4. Under When should YTD summaries affect accounts? section, manually enter the year period. 
5. Tap Next.
6. In the Earliest QuickBooks payroll date section, enter the date you'll begin using QuickBooks payroll to create paychecks. Then, Next. 
7. To enter a YTD summary for an employee, select the employee's name and press the Enter Summary button.
8. Once done, click OK and hit Leave. 

Here's an article you can refer to for more details about entering historical tax payments in QuickBooks. We can also check out the Enter historical payroll data article to enter paychecks that you have issued the year before using the payroll service. 

Feel free to browse this link here if you need help with other tasks in QuickBooks Payroll. It'll route you to our general payroll topics with articles.

Leave us a message if you need further assistance with managing your payroll. I’m always here to help. Have a good day, and stay safe!

According to the post above, I should be able to click Manual Payroll EVEN IF I have an existing payroll subscription.  However, the Manual Payroll box is grayed out, therefore not letting me access the Manual Payroll function.  I have QBDT 2021.

Other threads have mentioned this same process only being available if you DO NOT have an active payroll subscription (thus my original question above).  How can I activate Manual Payroll?

@MelroseV this process only works if you want to enter in YTD totals.  I need the detail of each and every paycheck in QuickBooks in order to access consistent reporting across the years.

Thank you for getting back to the thread and for the additional details. I'll chime in and share my thoughts regarding this matter.

Usually, if you select the Full Payroll, the Manual Payroll option shouldn't be greyed out. Since the case is different on your end, let us first update your QuickBooks Desktop to the latest release to keep your software up-to-date. Then, proceed to follow the steps provided by my colleague above or by going directly to this article: Set up manual payroll without a subscription in QuickBooks Desktop.

I'm adding these articles you can use in the future:

• Enter historical tax payments in the Desktop payroll.
• Print or reprint paychecks and pay stubs.

For additional QuickBooks-related concerns, don't hesitate to post them here in the Community. We're always available and willing to lend a hand to your queries. Have a great day ahead.

@JamesAndrewM thanks for your response.  The software is up to date and the Manual Payroll option is grayed out.  As I stated above, we do have an active payroll subscription currently.  Are you saying that even with an active payroll subscription, I should still have the option to have Manual Payroll as well?  The link you sent me to follow is for using Manual Payroll WITHOUT a payroll subscription, which is NOT my case.

I have read numerous threads that state you cannot have an active payroll subscription in order to use Manual Payroll. So, which is correct?

I appreciate sharing additional details regarding the manual payroll issue, PYBK784.

I'm here to provide further details on the cause of the greyed-out feature and ensure to offer a solution.

The Manual Payroll option will be grayed out if the company file already has an existing service key, whether active or not. To fix this, please take note of the service key and remove it temporarily. Please note that you do not need to cancel your subscription. Instead, you only temporarily deactivate it to enable Manual Payroll.

In addition, check this resource that will serve as a valuable reference for wrapping up this year's payroll and preparing for the next year with QuickBooks Desktop Payroll: Year-end checklist for QuickBooks Desktop Payroll.

I'm here anytime you need further help with payroll or other related concerns.

@GlinetteC thank you so much for being the ONLY one to actually answer my original question posted!  Could you please tell me HOW to temporarily deactivate the payroll service key?

We have a way to temporarily deactivate the payroll service key so you can manually input your prior year's paychecks in QuickBooks Desktop (QBDT) Payroll, PYBK784. I'll walk you through the entire process.

Before doing so, please make sure you:

• Pay any outstanding tax deposits
• Process and file any outstanding annual or quarterly forms

Whenever you're ready to temporarily deactivate your payroll service key, perform the following:

1. From the Employees dropdown menu, select My Payroll Service, then Manage Payroll Service.
2. In the QuickBooks Service Keys window, select Edit and take note of the service key.
3. Remove the payroll service key in QuickBooks Desktop.
4. Click Next.
5. When the Payroll Update message appears, select OK.
6. Verify the Service Status shows INACTIVE and then select OK.

After that, set up manual payroll from the Preferences menu's Payroll & Employees section (if necessary) and enter your historical payroll data.

Once you're done, re-enter the payroll service key to reactivate your Payroll Service.

Also, I've included this article to remind you of important dates and tasks in QBDT Payroll: Year-end checklist for QuickBooks Desktop Payroll.

You can always get back to this thread if you have other payroll concerns or questions about tracking historical data in QBDT Payroll. We in the Community are always ready to help you out.

@Rea_M thanks for the response.  However, following the instructions as laid out above, when I remove the Payroll Service Key and hit next, an error message appears (shown below).  I clicked Next as indicated, but the dialog box will not let me continue without entering another payroll service key.  I do not know how to get the Service Status to INACTIVE, as described above.  Please advise.

I recognize the urgency of getting this error resolved, @PYBK784.

I'm here to help you sort this out so you can Inactivate the Service Status.

As provided by my colleague, GlinetteC above, you can take note of the service key, Remove it temporarily, and deactivate it. This way, the dialog box will be clickable to activate the Manual payroll. Here are steps on how to do so:

1. Close all your company files and restart your computer.
2. Open QuickBooks, go to Employees, select My Payroll Service, then hit Manage Service Key.
3. Your Service Name and Status should be correct and will show as Active.
4. Click Remove. 

Once done, you can proceed to the Preferences from the Edit menu. Then, select Payroll & Employees and tick Manual Payroll.

If you still see the error, you'll want to proceed to Steps 2-3 in this article: Fix PSXXX errors when downloading payroll updates.

You can also open this link for more tips about entering or editing your payroll service key.

This thread is still open for you. So, if you have questions about managing your payroll, let us know, and we'll be here to help. Take care always.

@Carneil_C when I click Remove as suggested above, the dialog below appears telling me to call the Payroll Service to cancel direct deposit. I don't really want to do that since I am using Manual Payroll to enter a prior year's payroll data ONLY.  We are currently using the Payroll service and direct deposit to pay 2024 payroll.  Do I really need to cancel direct deposit in order to active the Manual Payroll option?

Thanks for getting back here in the thread, @PYBK784. We'll point you in the right direction to help you get through this and utilize the manual payroll option inside QuickBooks Desktop (QBDT).

Before anything else, know we recognize the importance of having the option to enter the prior year's payroll data manually. In this situation, we recommend contacting our Customer Care Team so they can provide details to help you have your data available inside the company file while retaining your Payroll Service. We'll write down the steps to get you going:

1. Open QuickBooks.
2. Go to Help, then select QuickBooks Desktop Help/Contact Us.
3. Select Contact Us.
4. Give a brief description of your issue, then select Continue.
5. Sign in to your Intuit account and select Continue and then Continue with my account.

• If you don't already have an account, make sure to Create a new account.

       6. We'll email you a single use code. Enter your code and select Continue.
 

• If you have more than one account, select the account you want to use and then Continue.

      7. Select to chat with us or Have us call you.

See this page for more details: Contact Payroll Support.

Additionally, we recommend checking this article to help you wrap up this year's payroll activities inside QBDT: Year-end checklist for QuickBooks Desktop Payroll.

We look forward to having you here again if you need further assistance managing payroll data or have any additional QuickBooks payroll questions. Rest assured, we'll be here to respond and help you out again. Keep safe.