If you choose to write and print a check, make sure to select the account where the advance payroll item is tracked. Then, when you create a repayment paycheck, the amount will be deducted from the account used to provide the advance.
Method 2: Pay through payroll
Step 1: Set up an advance payroll item
- Go to Lists, then Payroll Item List.
- Select Payroll Item ▼ dropdown, then New.
- Select Custom Setup, then Next.
- Select Addition, then Next.
- Enter the name of the item, such as Employee advance.
- Select the expense account where you want to track the item. Select Next.
- Set the tax tracking type to None. Select Next.
- Select Next twice. You don’t need to do anything on the next two windows.
- Select net pay in theGross vs. net window. Select Next.
- Leave Default rate and limit fields blank. You can add the amount when you create your employee’s paycheck.
- Select Finish.
Note: When you create a paycheck, the advance item and the amount must be added in the Other Payroll Items section.
Step 2: Run your payroll with the advance
Run your scheduled payroll with the advance payment or create an advance payment-only paycheck. Enter the amount for the advance as you run payroll.