What effect does making an employee inactive have on QB?
You are correct, PeterYork!
Though the status is inactive, the data remains on your account. That is because you still need to file annual payroll forms for those inactive employees if you created a paycheck within the year. Also, this is to make sure that your data is still intact.
In addition, we can also reactive them if these employees work again at your company. Reactivating an employee is a pretty painless process. Here are the steps to do so:
Go to the Payroll tab and then click Employees.
From the Active Employees drop-down, select InactiveEmployees.
Select the inactive employee and go to the Employment.
Change the status to Active.
I've added some articles you can check about payroll: