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 cheque. QuickBooks Desktop Payroll cannot automatically process a split payment as a single payroll cheque.
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 cheque:
Note: Using this method can cause federal and state taxes to be under reported because of the individual gross amounts on the separate cheques. Advise employee before choosing this option.
- Begin payroll as normal and process the direct deposit part of the paycheck first.
- Note: If you want to deposit a percentage of the cheque, 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 cheque. The paycheck with direct deposit would have a gross of $950.00, and the paper cheque would have a gross of $50.00.
- When you are done with the direct deposit cheque, close the confirmation window and select Send later when QuickBooks Desktop prompts you to send the payroll.
- Process an additional (unscheduled) payroll for the paper cheque. Uncheck the Use Direct Deposit box in the paycheck detail screen, which changes the cheque to a paper cheque for the remaining amount of the gross pay owed.
- Print the pay stub and paycheck as needed and send your payroll data as you normally would.
- Begin payroll as normal and enter the paycheck information.
- 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.
- Use the deduction to reduce the cheque by the amount the employee wants to receive as a paper cheque.
- Complete the payroll and send it.
- Select Banking > Write Cheques.
- Create a manual cheque from the account used for the deduction to pay the employee the amount they want to receive in a paper cheque.
Note: There are no additional processing fees for the paper cheque, but normal direct deposit fees apply.