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Split paycheck between paper check and direct deposit in QuickBooks Desktop Payroll

In QuickBooks Desktop Payroll, an employee may want to receive part of their paycheck through direct deposit and part of it paid as a paper check. QuickBooks Desktop Payroll cannot automatically process a split payment as a single payroll check.

There are two ways to split a paycheck so that part of it is paid through direct deposit and the rest is paid as a paper check:

  1. Create two checks for the pay period, or
  2. Add a deduction item to a live paper check

To create two checks for the pay period:

Note: Using this method can cause federal and state taxes to be under reported because of the individual gross amounts on the separate checks. Advise employee before choosing this option.

  1. Begin payroll as normal and process the direct deposit part of the paycheck first.
    • Note: If you want to deposit a percentage of the check, calculate the percentage of the gross first. For example, say your employee earns $1000.00 gross. The employee wants 95% of their wages to be paid through Direct Deposit and 5% as a paper check. The paycheck with direct deposit would have a gross of $950.00, and the paper check would have a gross of $50.00.
  2. When you are done with the direct deposit check, close the confirmation window and select Send later when QuickBooks Desktop prompts you to send the payroll.
  3. Process an additional (unscheduled) payroll for the paper check. Uncheck the Use Direct Deposit box in the paycheck detail screen, which changes the check to a paper check for the remaining amount of the gross pay owed.
  4. Print the pay stub and paycheck as needed and send your payroll data as you normally would.

To add a deduction item to the paper check:

  1. Begin payroll as normal and enter the paycheck information.
  2. Add a deduction item with a Tax Tracking Type of None, similar to a paycheck advance.  See Create Employee Advances And Repayments In QuickBooks Desktop to learn how to create a deduction payroll item.
  3. Use the deduction to reduce the check by the amount the employee wants to receive as a paper check.
  4. Complete the payroll and send it.
  5. Select Banking > Write Checks.
  6. Create a manual check from the account used for the deduction to pay the employee the amount they want to receive in a paper check.Note: There are no additional processing fees for the paper check, but normal direct deposit fees apply.

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